Almost every day another tough talking FedHead is paraded in front of us. They try to impress as vigilant folk and hardly seem like the type we would chat up at a punchbowl in the basement of a college frat house. Although they talk a good game, they don’t always back up their trash talking. Talking hawkish and acting dovish that is.
The following news did not seem inspire much debate when it was released:
The staff of the Securities and Exchange Commission has approved the New York Stock Exchange’s application for a new type of trading account that would set requirements for using borrowed funds, called margin, based on the types and weightings of securities in the account - stocks, options and futures.
“It’s a very significant change,” said Robert Colby, deputy director of the SEC division that oversees U.S. stock markets.
True, it appears that this appears to apply mostly to hedge funds and other sophisticated institutional investors. The prime brokers that cater to the big money crowd can seemingly create money and credit out of thin air. Which effectively circumvents the regulators anyhow.
Perhaps we need to do this in order to stay competitive with our european and asian rivals.
But will it have the effect of throwing fuel on an already smoldering tape?
Stay tuned.
I don’t think it changes a thing. It’s a new NYSE product/account that will compete with current PB offerings. So what? Colby is a moron. If anyone at the SEC was paying a damn bit of attention these exchange mergers would be getting shitcanned. They looked the other way during ECN “consolidation”, and there’s been zero price competition in the years that followed. Well done, you DC shitbirds.
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