AI
Saturday, August 23, 2008 10:36:43 PM
http://glickreport.blogs.foxbusiness.com/2008/07/29/the-sec-and-naked-shorting/
Some other talking points:
1) More shocking yet (and I can send the back-up data on this) is that on an average day, 72% of the FTD’s are in stocks that are on the Reg SHO list. Some protection.
2) How bad a problem is this?
a.You understand that $1 million of toxic waste does not cost $1 million to clean up: it may cost much more. Similarly, a broker holding a 10 million share FTD in a $1 stock may carry it as a $10 million liability, but if he has to clean up his fail, and buy-in 10 million shares in a stock trading 50,000 shares/day… it may cost him $10 million, but it could just as easily cost $100 million.
b. Put that together with the $8.5 billion number above. Cleaning it up will not cost $8.5 billion. It could cost $18.5 billion, or $80 billion… No one has any idea.
c. The CNS failures are just one part of the equation. There is also broker-level “pre-netting”, fails resolved by the DTCC Stock Borrow Program, ex-clearing, and failures coming in from off-shore clearing systems. Everybody who will talk from within the system says that collectively, these are a far bigger (the estimates from within the system are $30 - $190 billion, depending upon who is speaking)
Ah Those pesky CMKXers are even getting to Fox Business reporters..LOL
http://pqibex.shutterpoint.com (Moosehead Lake Keno)
Some other talking points:
1) More shocking yet (and I can send the back-up data on this) is that on an average day, 72% of the FTD’s are in stocks that are on the Reg SHO list. Some protection.
2) How bad a problem is this?
a.You understand that $1 million of toxic waste does not cost $1 million to clean up: it may cost much more. Similarly, a broker holding a 10 million share FTD in a $1 stock may carry it as a $10 million liability, but if he has to clean up his fail, and buy-in 10 million shares in a stock trading 50,000 shares/day… it may cost him $10 million, but it could just as easily cost $100 million.
b. Put that together with the $8.5 billion number above. Cleaning it up will not cost $8.5 billion. It could cost $18.5 billion, or $80 billion… No one has any idea.
c. The CNS failures are just one part of the equation. There is also broker-level “pre-netting”, fails resolved by the DTCC Stock Borrow Program, ex-clearing, and failures coming in from off-shore clearing systems. Everybody who will talk from within the system says that collectively, these are a far bigger (the estimates from within the system are $30 - $190 billion, depending upon who is speaking)
Ah Those pesky CMKXers are even getting to Fox Business reporters..LOL
http://pqibex.shutterpoint.com (Moosehead Lake Keno)
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