Germany Still Going After Naked Short Sales to Save the Euro
Are the Germans really trying to ban regular old naked shorts or are they trying desperately to defend the euro?
Germany's Finance Ministry on Tuesday proposed extending a ban on some "naked" short selling to cover all stocks and euro-currency derivatives not intended for hedging.
The expanded ban goes beyond the prohibition of naked short-sales of certain financial stocks imposed last week.
The proposals, outlined by the ministry in a draft bill that will be discussed by the German cabinet next week, also include a new "transparency system" for short selling.
"Naked short selling of stocks and the debt of euro-zone states that are listed on a domestic exchange in a regulated marketplace will be forbidden," the proposal says.
Stocks? Is that what we're talking about? Sure about that?
The short-selling of credit default swaps on euro-zone debt without ownership of the debt obligation and of euro currency derivatives not meant for hedging would also be prohibited, the ministry said.
Aha! So the point is to try to regulate the free-for-all that leaves the euro wide open for attack in the hopes that somehow this will dissuade unscrupulous speculators from taking her down? Too bad Trichet doesn't have the balls nor the support to really start printing the euro's way out of this mess.
Listen, it's too late. The world already knows what's going on in the eurozone. It also already knows that unlike our irresponsible asses over here in the US, Europe doesn't have anything to back up its bluff. Like that whole world reserve currency thing.
Quote of the year: "I am not saying we are going down the trashcan, but we have had a dose of the poorest European leadership imaginable."