Crisis on Wall Street: Lehman to file for bankruptcy protection, Merrill Is Sold

[brendan]

How to Save the Financial System
By WILLIAM M. ISAAC
Mr. Isaac, chairman of the Federal Deposit Insurance Corp. from 1981-1985, is chairman of the Washington financial services consulting firm The Secura Group, an LECG company.
http://online.wsj.com/article/SB122178603685354943.html

[brendan]

Guarantee All Bank Deposits
By JEREMY J. SIEGEL
Mr. Siegel, a professor of finance at the University of Pennsylvania's Wharton School, is the author of "Stocks for the Long Run," now in its 4th edition from McGraw-Hill.
http://online.wsj.com/article/SB122186549783858739.html

[brendan]

Diamond and Kashyap on the Recent Financial Upheavals <-------very good explanation
Douglas W. Diamond is a Professor of Finance at the University of Chicago Graduate School of Business.
Anil K Kashyap is a Professor of Economics and Finance at the University of Chicago Graduate School of Business.
http://freakonomics.blogs.nytimes.com/2008/09/18/diamond-and-kashyap-on-the-recent-financial-upheavals/

Rethinking Capital Regulation
http://faculty.chicagogsb.edu/anil.kashyap/research/rethinking_capital_regulation_sep15.pdf

[brendan]

Desperate times need the right measures
By Raghuram Rajan, a professor of finance at the University of Chicago’s Graduate School of Business
http://www.ft.com/cms/s/0/13a60574-862b-11dd-959e-0000779fd18c.html

A Matched Preferred Stock plan for government assistance
by Charles Calomiris, the Henry Kaufman Professor of Financial Institutions at Columbia Business School
http://blogs.ft.com/wolfforum/2008/09/a-matched-preferred-stock-plan-for-government-assistance/#more-186

More regulation will harm, not help, recovery
Gerard Baker
http://www.timesonline.co.uk/tol/comment/columnists/gerard_baker/article4782481.ece

[brendan]

Goldman Sachs and Morgan Stanley to become bank holding companies. 
http://www.federalreserve.gov/newsevents/press/bcreg/20080921a.htm
http://blogs.wsj.com/economics/2008/09/21/fed-statement-on-goldman-morgan-stanley/

[brendan]

Short Sellers Keep the Market Honest
By JAMES S. CHANOS
Mr. Chanos is founder and president of Kynikos Associates, LP and chairman of the Coalition of Private Investment Companies.
http://online.wsj.com/article/SB122204250955761325.html

[Collin Li]

Short Sellers Keep the Market Honest
By JAMES S. CHANOS
Mr. Chanos is founder and president of Kynikos Associates, LP and chairman of the Coalition of Private Investment Companies.
http://online.wsj.com/article/SB122204250955761325.html

I agree with this. There is nothing wrong with short selling.

[AppleXY]

Short selling was my strategy for equities now. It's a great hedge against lossses. Meh, damn regulatory commissions

Pfft.

[marbs]

lol the a few days after my microeconomic reform sac, this comes out.

In the sac, there was a question what is the ASIC, and I was trying to think of an example. Short Selling would have been perfect. I think I just said they were in charge of corporation laws.

[brendan]

Blame Fannie Mae and Congress
For the Credit Mess
By CHARLES W. CALOMIRIS and PETER J. WALLISON
Mr. Calomiris is a professor of finance and economics at Columbia Business School and a scholar at the American Enterprise Institute. Mr. Wallison, a senior fellow at the American Enterprise Institute, was general counsel of the Treasury Department in the Reagan administration.
http://online.wsj.com/article/SB122212948811465427.html

'Wall Street' No Longer Exists
By ALAN REYNOLDS
Mr. Reynolds, a senior fellow with the Cato Institute, is the author, most recently, of "Income and Wealth" (Greenwood Press, 2006).
http://online.wsj.com/article/SB122212959612065505.html

The $700 Billion Question
By ANIL K KASHYAP and JEREMY C. STEIN
Anil K Kashyap is a professor of economics and finance at the University of Chicago Graduate School of Business. Jeremy C. Stein is a professor of economics at Harvard.
http://www.nytimes.com/2008/09/23/opinion/23kashyap.html?_r=1&hp&oref=slogin

Commentary on the Financial Mess by
   1. Roger Lowenstein
   2. Charlie Calomiris and Peter Wallison
   3. Barry Eichengreen
   4. Larry Lindsey
   5. Thomas Sowell
   6. Robert Samuelson
http://gregmankiw.blogspot.com/2008/09/commentary-on-financial-mess.html

[Collin Li]

Luckily there are people out there are trying to spread the truth, that the lack of regulation is not the problem, but regulation itself is.

For too long, we have been trying to fix the failures of regulation with more regulation. It turns it out has been the problem all along.

Back then, the Democrats had the good intentions of helping the poor pay for their mortgages. What did they do? They shoved monetary promises down the throats of big business to guarantee them returns on sub-prime mortgage loans, despite how unsound the loans were! Now, the distortion of prices has finally built up to a stage where the market realises this cannot go on. The market has spoken, and the correction will happen. A big fat crunch in the ass is coming.

[brendan]

http://krugman.blogs.nytimes.com/2008/09/22/the-humbling-of-the-fed-wonkish/#more-889
http://krugman.blogs.nytimes.com/2008/09/18/less-than-zero/
http://www.voxeu.org/index.php?q=node/1669

[brendan]

Let's Get the Bank Rescue Right
By R. GLENN HUBBARD, HAL SCOTT and LUIGI ZINGALES
Mr. Hubbard, dean of Columbia Business School, was chairman of the Council of Economic Advisers under President George W. Bush. Mr. Scott is professor of international financial systems at Harvard Law School. Mr. Zingales is professor of finance at the Graduate School of Business at the University of Chicago.
http://online.wsj.com/article/SB122221456930869333.html

[marbs]

Question about Short Selling

Is this the general idea.

Investors sell someone elses shares, aim to buy them back at a lower price, and make for themselves a profit from the sale.

Is that it.

If so,  How would you be able to sell someone elses shares? Is the only way to be a stock broker?

Is it such a huge and important problem?

[AppleXY]

Short-selling is a different market than to standard equities (standard equities pay out dividends). In this market, called "Derivatives", it is solely judged upon the price of the security. In simple terms, to profit, you capture the difference between two prices (it doesn't matter if you buy it low and sell it high or buy high or sell it low).

These shares are not governed by particular stock exchange regulations (and do not have central price) and thus it is not 'somebody's elses' shares. However, You do buy under the liability of the broker.