Whenever things in the market start getting hammered, it’s popular to blame the short sellers… Right now, in fact, there are even calls to ban short selling of banks because they’re an easy target. That’s ludicrous, of course, just as it proved to be after the Great Financial Crisis of 2008. The last thing anybody should want, in a free market, is something that gets in the way of the market dynamics.
Excellent very important insight into the potential negative impact of ETF's, doing what they have to do, that needs to be better governed! Also, see May 2023 Accounting Today (pg 15) article "Could accounting have saved SVB?" Where the current requirement for "mark-to-market accounting" is examined, and the alternative valuation method of "discounted cash flow (DCF)" is discussed as possibly presenting a potentially stabilizing lack-of-confirmation regarding existing long-term investments. Of course such a use of DCF would have to involve interest rate assumptions deemed reasonable by both investors and the Federal Reserve.
"When it comes to the Fed and the economy, most of us are novices. We assume they know what they’re doing, and that it’s not political, because it’s not supposed to be.
But apparently they don’t know what they’re doing, it is political... and that’s sad."
"But apparently they don’t know what they’re doing, it is political... and that’s sad."
Small correction - 'they know what they're doing but it is political...and that's even sadder'
Case in point - in late 2018 the Fed initiated a tightening cycle. Had they been allowed to continue we would have, for the most part, been spared this unholy mess. But one Donald J. Trump - who used the stock indices as a symbol of personal achievement - got in the way, reversed the cycle and so got us in this mess.
As far as regulations - when has the GOP ever met a regulation it did not want to eliminate? Mostly with the battle cry of setting the XYZ free and boosting profits. Which it does for a while enriching management and boosting campaign contributions before ol' Joe is taken behind the shed and shaken down once again.
So while the Fed may be somewhat culpable it is, at its root, the politicians and behind them, 'we the starry-eyed people'.
ETF's and Derivatives with No actual $, only placing paper/digital bets. Betting in the Trillions Beyond any Available Money. Then to add insult to injury, with "Money" that has No Intrinsic Value.
Map it out in Any Direction..... = Default Disaster........ and THEN the Consequences Beyond Comprehension.
Fantastic article. It is rarely the person or people fingers first point at.
Excellent very important insight into the potential negative impact of ETF's, doing what they have to do, that needs to be better governed! Also, see May 2023 Accounting Today (pg 15) article "Could accounting have saved SVB?" Where the current requirement for "mark-to-market accounting" is examined, and the alternative valuation method of "discounted cash flow (DCF)" is discussed as possibly presenting a potentially stabilizing lack-of-confirmation regarding existing long-term investments. Of course such a use of DCF would have to involve interest rate assumptions deemed reasonable by both investors and the Federal Reserve.
This part resonates with many people.
"When it comes to the Fed and the economy, most of us are novices. We assume they know what they’re doing, and that it’s not political, because it’s not supposed to be.
But apparently they don’t know what they’re doing, it is political... and that’s sad."
"But apparently they don’t know what they’re doing, it is political... and that’s sad."
Small correction - 'they know what they're doing but it is political...and that's even sadder'
Case in point - in late 2018 the Fed initiated a tightening cycle. Had they been allowed to continue we would have, for the most part, been spared this unholy mess. But one Donald J. Trump - who used the stock indices as a symbol of personal achievement - got in the way, reversed the cycle and so got us in this mess.
As far as regulations - when has the GOP ever met a regulation it did not want to eliminate? Mostly with the battle cry of setting the XYZ free and boosting profits. Which it does for a while enriching management and boosting campaign contributions before ol' Joe is taken behind the shed and shaken down once again.
So while the Fed may be somewhat culpable it is, at its root, the politicians and behind them, 'we the starry-eyed people'.
is this an instrument we should outlaw?
ETF's and Derivatives with No actual $, only placing paper/digital bets. Betting in the Trillions Beyond any Available Money. Then to add insult to injury, with "Money" that has No Intrinsic Value.
Map it out in Any Direction..... = Default Disaster........ and THEN the Consequences Beyond Comprehension.
genearly.substack.com
Great article. A short selling ban = running out of people to blame. I am confident the Fed is a 20,000+ employee bureaucratic mess.