Germany decided to bail out Greece – or rather joined the bandwagon of ‘Greece bailout helpers’. In its heart perhaps the Germans know (knew) that this is not a great deal after all. Of course the market had to tell the German government what it thought. So the market started selling Government bonds.

The Government did not like this, so it said, NO GOING SHORT. This is so short sighted that I cannot believe that these are the same countries which talk about free markets. L O L.

Obama says ‘I will support those who create jobs in US’ and also says ‘free markets…’ Ha ha ha. Stop subsidising your cotton and sugar farmers Obama, we will listen to your sermon on ‘free markets’. Remove your visa restrictions, we will listen to your sermon on ‘free markets’.

So in free markets ‘Germany’ you cannot short the government bonds. Funnily it will mean that most large players WILL NOT BUY German bonds – because you cannot get insurance against a potential fall. People will just shift to other Sovereign bonds – liquidity will vanish in German bonds – and so the German Banks will NOT be able to place their bonds, there will be a panic…..OMG 🙂

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  1. if there is no naked shorting…who will write put options? how will you be able to get an insurance premium. The volumes will shrink. Only sellers will be the holders…there will be no price discovery.

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