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B4 The Bell, Thursday June 24


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I think that the issue of Depository Receipt Corporation.......which

is an arm of Federal Reserve Board.......and their fraud of putting

out for shorting........more titles to certain shares.......than they

actually have in their "custody".........is a monumental problem that

i am trying to follow to see what SEC...etc. do about this.

 

this story was posted here recently and i don't recall anybody commenting

about it.

I read that story HiHat and it is potentially huge.It was probably somewhat overshadowed by 990N at the time.As with all these stories of malfeasance,when it's up to the SEC to sort it out--don't hold your breath as Mr.SEC himself is a skull and bones man(1953) as pointed out by HT recently.

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Why is volatility so low in financial markets?

 

So why then is volatility so low? Jim Bianco, who runs an eponymous research firm, suggests an answer of beguiling simplicity. Many people?at hedge funds and banks in particular?are selling options to earn money from the fees for doing so. For those doubting Thomases who think the market is much too efficient to be affected by a few banks and funds selling options, it is worth bearing in mind that in the early 1990s one man single-handedly drove the implied volatility on Japan?s Nikkei-225 average from 22% to 11% by dint of selling 34,000 options on it. Selling options is a splendid way of making money when markets behave themselves?and indeed such a strategy has made huge profits for those that have done so over the past couple of years.

 

The problem comes when markets misbehave, which happens far more frequently than the sellers of options allow for. The name of the man who sold those Japanese options was Nick Leeson. And both he and Barings, the bank that he bankrupted, really were lost. They met, as it were, their Waterloo.

 

http://www.economist.com/agenda/displaySto...tory_id=2785044

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