Monday: So Far the markets don’t buy the fix. Feds calling it Terrorism.
1. The Murdoch (formerly Dow) 30 are down about 250 at midday, rather quietly. No raging panic, but also no sign of joy at the outline of the Treasury plan, which the Congress is now heavily editing.
2. Todd Harrison at Minyanville.com says that a “good” Beltway source told them that what looks like a concerted short-selling operation in size out of Dubai and London began on September 11 (ie, eleven days ago).
And that this was a primary reason the feds have banned shorting of some 800 financial stocks (the list has grown since first announced).
The short ban is currently scheduled to end on Oct 2. But meanwhile other countries worldwide have jumped in, some with market-wide bans (not just financials).
3. The damage being done worldwide by allowing Lehman to fold is just starting to be realized. Lots of big customers (hedge funds, LBO funds …) can’t get their money, perhaps for months, and probably with quite a bit of leakage. See Naked Capitalism.
A ton of gorillas, therefore, are in pain. And have to sell stuff in the markets to raise cash. Exacerbating the slide.
4. Oil was screaming — up about $25 and $25% (!!!!) today — the biggest daily jump ever since the contemporary futures contract began selling in 1984.
Or … Strangely, at market close — as the current front contract expired and was replaced (so to speak) by the subsequent — suddenly the price dropped from about $120 to $109.
Thatsa pretty big rollover blip.
Not to worry — post bell the fed futures regulator says it’s going to look into the matter.
Doin’ a great job, Brownie …
Surfwalker says:
The Dubai connection rings an interesting bell. Nasdaq acquired the OMX Nordic Exchange just under a year ago. Concluding the deal took months, largely because of a hostile bid from Bourse Dubai. Emotions were running very high at times. DB, fueled by a perception that Nasdaq wasn’t playing fair (given that BD was prepared to pay more than Nasdaq), supposedly threatened some sort of unspecified payback. Everything was supposedly smoothed over in the end, with BD receiving a significant stake in Nasdaq, but no doubt plenty of resentment persisted. I don’t recall what role, if any, Lehman or any other U.S. investment bank played in the deal.
September 24th, 2008 at 3:25 am