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Regulators seek global approach to short selling
LONDON (Reuters) - Short-selling should be regulated as some practices may create disorderly markets during extreme financial turmoil, a global body of supervisors said on Monday.
Short-selling has been blamed by critics for exacerbating the slide in bank shares during the credit crunch.
And the International Organization of Securities Commissions (IOSCO) policymakers, who have put forward recommendations to deal with the issue, have pointed to hedge funds as they often use the tactic.
"We believe that short selling should operate in a well-structured regulatory framework in the interests of maintaining a fair, orderly and efficient market," said Martin Wheatley, chairman of IOSCO's task force on short selling and also chief executive of Hong Kong's Securities and Futures Commission.
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Defaulting Commercial Properties Hit Banks as Lost Jobs Increase Vacancies
March 23 (Bloomberg) -- U.S. banks, battered by record losses from the worst housing slump since the Great Depression, now must weather increasing loan delinquencies from owners of skyscrapers and shopping malls.
The country’s 10 biggest banks have $327.6 billion in commercial mortgages, which face a wave of defaults as office vacancies grow and retailers and casinos go bankrupt. A projected tripling in the default rate would result in losses of about 7 percent of total unpaid balances, according to estimates from analysts at research firm Reis Inc.
Commercial property prices are down almost 20 percent in the past year, and with the global recession worsening, there’s “significant stress” in the market, said William Schwartz, a credit analyst at DBRS Inc. in New York. Moody’s Investors Service is reviewing the financial strength ratings of 23 regional lenders, as “these losses are likely to meaningfully weaken the capital position of many banks in 2009,” said Managing Director Robert Young in New York.
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Bank Bond Spreads Widest Since 1996 Tell Stock Market Rebound in Jeopardy
March 23 (Bloomberg) -- This month’s record rally in U.S. financial companies is in jeopardy, according to the bond market, where concern about bank failures is growing.
While the Standard & Poor’s 500 Financials Index of banks, brokerages and insurers surged as much as 54 percent from a 17- year low on March 6, bonds of the companies yield 8.55 percentage points more than Treasuries, about the widest in 13 years, according to Merrill Lynch & Co. indexes. The gap between yields of financial institutions’ bonds and Treasuries widened even as their stocks jumped.
The divergence between the performance of banks’ stocks and bonds shows the struggle facing investors trying to determine if the S&P 500’s 14 percent gain in the past two weeks means the worst is over for equities following the steepest plunge since 1937. Financial companies led the past month’s gains.
“Equities are trading as a barometer of speculative appetite,” said Kevin Caron, the Florham Park, New Jersey-based market strategist at the private client group of Stifel Nicolaus & Co., which oversees about $50 billion. “The bond market is focusing more on the balance sheet and the bogeyman lives in the balance sheet.”
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Stock-Option Repricing Lets Employees Sidestep Crash (Update4)
March 23 (Bloomberg) -- EBay Inc., Advanced Micro Devices Inc. and dozens of other companies are asking shareholders to do something for employees that investors can’t do for themselves: sidestep the worst market crash since the Great Depression.
Since the start of 2008, 114 companies have proposed or completed plans that would exchange underwater stock options, according to research firm Equilar Inc. The companies swap options for ones with lower prices, increasing employees’ chances of making a profit.
The trend creates a dilemma for investors. The option exchanges lift employee morale and help retain valuable workers. At the same time, the programs don’t seem fair to some investors, since regular shareholders don’t get the same deal. They can also dilute the stock’s value when employees exercise their options.
“I remain skeptical about these types of proposals for obvious reasons,” said Paul Wick, a fund manager at J&W Seligman & Co., part of Ameriprise Financial, which had $372 billion under management at the end of 2008. “There’s no way for public investors to reboot and reprice their entry when they bought shares.”
Originally posted by Hx3_1963
reply to post by elston
People are Desperate...grabing at straws now...no matter how thin...
I'm posting!!! 'course I'm not wrapped to tight...LoL
Now...hows this going to go over???
Brown Urged by CBI to Refrain From Further Fiscal Stimulus in April Budget
Blanchflower Calls for British Government Stimulus as Unemployment Worsens
[edit on 3/23/2009 by Hx3_1963]
Originally posted by theWCH
A common theme that's emerged is to put out bad news disguised as good news, and what do ya know? The market rockets on the good news then drops when proper dissection shows that it was actually bad news.
Today we had the news that the California housing market was "recovering."