Doing the same thing over and over, but expecting a new outcome is the definition of a mad person. Latest out of Italy is a new extended short selling ban. Just because it didn’t work last time, it “must” work now? Wonder just how people are expected to hedge positions when shorting is not allowed? Stupidity never ends. From Bloomberg;
Italy’s securities regulator extended a ban on short selling financial shares until Feb. 24, according to an e-mailed statement from Commissione Nazionale per le Società e la Borsa.
The restrictions, in place since August, prohibit investors from betting against the shares and equity derivatives of banks and insurance companies, Rome-based Consob said yesterday.
The short-selling ban covers securities such as UniCredit SpA (UCG), which has plunged 40 percent in 2012 and slumped to a record low this week. Regulators in France, Spain, Italy and Belgium imposed temporary bans on the bearish bets in August to stabilize markets amid Europe’s sovereign-debt crisis.
“The risk is that they’re not allowing investors to get a clear signal about which of these stocks are healthy and which ones are sickly,” Kevin Byrnes, a West Chester, Pennsylvania- based analyst at TFS Capital LLC, said in a phone interview. “That can clog up the price discovery for the entire Italian stock market.”
The UNICRED rights issue proving that re capitalising banks via the normal route will be exceedingly difficult (if not impossible).
The Greek Prime Minister Papademos warned that without a positive meeting with Troika later this month, his country is “…at risk of a disorderly default in March”, which is the second Greek politician warning this week.
ECB data showing still massive amounts of money is being parked with the central bank overnight, fear still being prevalent in the interbank lending markets.
Developments in Hungary where the government’s constitutional reforms threaten its democracy and the country’s ability to fund itself. (Hungarian one year bill auction this morning – raised only 35bn Florint out of 41bn offered with a yield of 9.96%, last September the one year yield was 5.5-6%)
Tensions between Iran and the West over the state’s nuclear ambitions, (with sanctions threatened) leading to a 6% rise in the price of Brent oil this week - a six month high.Comments from the Spain’s new Economy Minister warning that its banks will need to provision for E50bn of losses from property loans which the government will not help to fund.
R U Bullish?