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Markets will always be free regardless of the constraints regulators
attempt to place on them. Our current "crisis" is a good
example of market forces finally overcoming the artificial forces
politicians have tried to exert for the past 60 years by creating
affordable loans for those that couldn't qualify for a market rate
loan. Constrain a market, any market and pressure will build to it
bursts. Create a bubble and the bubble will burst.
Shorts will make a valuable contribution to launching the next bull
market rally when they step in to cover their shorts and thus add buyer
pressure moving off the bottom.
Having said all this, I agree with you 100% that nobody should be in a
position to manipulate a market, not an individual, not a fund, not even
a government. To allow markets to truly operate freely requires an
even playing field be established to begin with.
Boater805
At 01:57 PM 10/7/2008, you wrote:
Like many others, I am so tired
of the continual excuses for taking the market lower that I'm ready to
just say "go for it!" The Fed has jumped through about
every hoop the hedge funds have demanded and one gets the definitive
feeling that they are making the list longer on a daily basis. Now,
it's not just lower interest rates, it's lower interest rates in
conjunction with the whole world! So, if the U.S. drops the target
rate by 1%, they will probably take the market down 400 pts because the
rest of the world didn't do the same thing. And how in hell can we
get them to do what these over-paid, self important managers want
done? Obviously nothing. And if by some miracle we could get
it done, they will have 4 new things on the list the next day.
Maybe we've reached the point of saying something along the lines of
this. "We have done nearly everything possible to alleviate
the current situation and now, it simply needs time to work. If the
Fed continues to believe that the markets are being manipulated by hedge
funds, it may be time to take a hard look into the make-up of these funds
and how they operate. They can not be allowed to cause the failure
of most American's retirement funds for the gain of the few and if we
determine that is what is happening, new laws and regulations will be
installed to end it"
I believe in an open and freely operating market but no one envisioned a
whole lot of wealthy people pooling their money together to push the
markets where they wanted them to go to the benefit of those limited
investors. Not only doing that but doing nearly everything with no
public over-sight or reporting.
Yes, I know that unwinding these fund's tentacles from the market would
be costly but when it would end, we could have a stock market again
rather than a roulette table with a brake peddle on the wheel.
Bob
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