Links: 2009-01-03

| 3 January 2009 21:53

British interest rates may sink to lowest since 1694 – Telegraph

BBC NEWS | Romanian fear amid economic gloom

Russia: Energy enigma, gas theories abound – BBC News

Bloomberg.com: Oil Caps Biggest Weekly Gain Since 1986 on Geopolitical Concern

Fire dies under China’s once booming manufacturing industry – Times Online

Warren Buffett’s Berkshire Hathaway suffers worst performance in 30 years with 32pc fall – Telegraph

FSA short-selling ban renewal | Business | guardian.co.uk

Chinese Factory Output, Employment Falls at Record Pace – Naked Capitalism

Baltic states face harsh economic hangover in 2009 – Telegraph

Is oil cheap only because of the recession? – Baltimore Sun

Q&A: Merrill Lynch Strategists on the ’09 Outlook for Stocks – Time “When Handed a Lehman…”

– Mark Thoma “Should We Fear a Trade Backlash?” – Mark Thoma

Low Mortgage Rates to Spur New Wave of Defaults – Barry Ritholtz

Seven-strong consortium to buy IndyMac for $14bn – Guardian

FiveThirtyEight.com: Politics Done Right: Franken Jumps Out to 225-Vote Lead on Strength of Absentee Ballots

The Importance of Accounting – James Kwak, RGE Monitor

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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2 Comments

  1. avatar John Creighton says:
    4 January 2009 at 20:54

    With regards for the renewal of the short selling ban. Every shot sell is accompanied by a long position. If that long position is cash then short selling strengthens the dollar. If the long position is another stock then that strengths the value of the stock you go long on to balance the short. Allowing short selling makes stocks more easier to buy (more liquid) because the number of buyers goes up.

    Short selling serves a useful arbitrage function method and generally should make the markets more efficient in determining the correct value of stocks. It also serves as an additional source of revenue for the person lending the stock.

    Rather then trying to ban shot selling regulates should make it easier for people to earn interest on their stocks. That is I should be able to give my broker permission to lend my stock and earn additional money above and beyond any, interest and capital gains on the stock.

    • avatar Edward Harrison says:
      4 January 2009 at 21:12

      The FSA is crazy. I f anything the lack of shorts hurt the market these past few months. There is zero evidence shorts are bad for the market. Even the article says so:

      Despite the ban on short selling, the share prices of banks and other financial institutions continued to fall last year and academic research published at the end of December insisted there was no strong ­evidence that the emergency restrictions had changed the way share prices moved.

      The research, by Professor Ian Marsh and Norman Niemer of Cass Business School in London, was commissioned by the International Securities Lending Association, the Alternative Investment Management Association and the London Investment Banking Association and was used as the basis for their argument that there is no case for continuing a ban on short selling. The organisations, which represent stock lenders, hedge funds and investment banks respectively, insist there is no evidence that preventing short selling has reduced share price volatility or limited share price falls.