This is happening all over the street...

Discussion in 'Wall St. News' started by flytiger, Dec 19, 2008.

  1. I heard of a retail firm that was charging the brokers.........

    Please be advised that we received the following notice from our clearing firm,
    Penson, last night.
    This is effective as of 12/18/08. If you have any questions please contact the
    trade help desk, 718-923-3007.

    As you all know, we find ourselves in extraordinary times in the
    securities mar
    kets, and the stock lending segment of the market is no exception. Historically,
    Easy-to-Borrow securities have been highly liquid and have traded at positive r
    ates to borrowing parties in the market covering short sales.
    Due to several factors, including downward pressure on interest rates
    from the
    Federal Reserve (the fed funds rate is hovering just above zero percent,) and sh
    rinking liquidity due to recent SEC emergency orders, rates on many easily borro
    wable securities have declined to zero, and in many cases, have slipped into neg
    ative territory.
    Until now, it has been Stock Loan’s policy to identify securities
    trading at th
    ese levels and remove them from the Easy-to-Borrow List prior to publication, bu
    t market conditions have forced us to rethink this approach.
    Effective immediately, securities trading from zero to negative five
    percent (-
    5%) interest will no longer be removed from the Easy-to-Borrow list. Securities
    trading at or greater than negative five percent will be catalogued as hard-to-b
    orrow and will not be included on the Easy-to- Borrow list.
    Until further notice, the Easy-to-Borrow list will merely identify
    highly liqui
    d securities – and not be an indication that the included securities can be borr
    owed at a positive rate. As has been the practice of charging for hard-to-borrow
    securities, correspondents should be advised that the costs associated with bor
    rowing these securities will be passed through to the customer.

    Please take this into consideration before carrying out short sales, as
    we expe
    ct the majority of securities to be impacted by this development.
  2. Now, let us analyze. This is the true cost of doing business. You didn't see it before, because very little was actually borrowed. But yes, Virginia, there is a limit to properly hypothecated securities.

    This is why a high up official at a very large IB told his people to expect a 2000 point up day. He was getting that from Hedge funds. I usually corroborate everything. The first source, when confronted with this said, 'go with the thousand points."

    Now, without the ability to lean on stocks without any regulation, we'll float up into the inauguration, if we don't explode first. After that? Just be sure you've got canned goods and ammo. Plenty of ammo.

    "It will take longer than any of us would like — years, not months. It will get worse before it gets better.

    Barack O'Bama (they finally gave him the 'briefing'.

    This is just another gift the Brokers and HedgeFunds have granted us. Higher costs of doing business, which I told you was coming. We'll be lucky to have a business.

    And here. "Non CNS activity"? What's that about ??? What a joke. but this could be a big catalyst.

    Madoff buy in deadline Dec. 29