Freeport-McMoRan (FCX)

[eddy2]

Took a short position that covers me to a drop of $12.00 plus administration costs. The administration costs leaves me in excess of the fifty percent but does allow me to enter and exit my short position. Because I’m borrowing the stock using what I hold today as my collateral this allowing me too borrow and sell another’s position. This does two things for me, if the stock goes down I can use my collateral that is returned to me to further short my position. Now should the investor I borrowed from want his shares back to sell I must buy back in and purchase the shares for him. If the shares have risen in price I must cover by extending my shares to him to a maximum of 50% of the value because my administration fee has been paid already.

Buying long is opposite of what I just explained. I would lend my shares and use my leverage 44% position too purchase additional shares. The one borrowing from me would be required too cover his position if he is out of the money.

All this stems from the assumption as too what can be paid back on the goods and service tax that under lies the value of the equity. The government is the equities collector. The money collected from equity holders too purchase the sales and service tax can then be loaned back through the banks into the public hands.

If the market is saturated the money will be held in a trust by the government for the government. By satiation I’m referring too the company not having enough collateral too borrow additional funds.

Now you still have to remember that the money is not the equity holders any longer but the governments. The government is telling the investor and the company that it is standing by ready to assist the company of its capital needs. This is done by contract not actual physical money.

An example is if you borrow money to purchase property to build a house. You show the bank your plans and there is a credit contract drawn up based on what you can afford too pay back. Now you can find an investor for your home by offering him or her equity in your new home.

This of course would not work in the public market only in a private market system.

You can still bring in private investors in a public private arrangement.