Thursday, 4 February 2010


Remember my little rant late January about maLOLcious forces - the general view, propounded by our own government, that speculators are largely responsible for the pummeling Greek debt has taken in the markets? Well, our Minister of Finance has, in the past been a little more specific, noting that some market pariticipants are shorting Greece and presumably making a killing out of their own self-fulfilling prophecies.

Sadly for him, such claims are testable.

FT Alphaville reports on this analysis from Dataexplorers. I don't know what to call this company, so let's go by their own strapline:

"Data Explorers (www.dataexplorers.com), based in New York and London, is the world's most complete resource for data, analysis and insight into short-selling. The company's proprietary data gives an unrivalled, comprehensive view on share lending and short-selling activity, with data representing the majority of the global securities lending market."

So they've got some inside info on short selling activity, which is notoriously hard to document except in its effects. What's interesting to me is that they've run a comparison of short-selling activity for Greek sovereign debt between late Jan 2009 and late Jan 2010, and found the following. Standby for FAIL.

Have you spotted it yet? That's right, there was more or less as much shorting of Greek debt in early 2010 (and, recall, this was before our updated SGP was approved) as in early 2009, when Karamanlis was in charge and was still maxing out the overdraft.
So the vultures our PM has been going on about are, in fact, for the most part people with previously long positions in Greek debt, who simply don't like the amount of risk associated with it anymore. A simple story, finally told well.

No comments:

Post a Comment

Please remember that I am not notified of any comments and will not respond via comments.

Try to keep your criticism constructive and if you don't like something, do tell me how to fix it. If I use any of your suggestions, you will be duly credited.

Although I'm happy to entertain criticism of myself in the comments section, I will not tolerate hate speech. You will be given a written warning and after that I will delete further offending comments.

I will also delete any comments that are clearly randomly generated by third parties for their own promotion.

Occasionally, your comments may land in the spam box, which may cause them to appear with a slight delay as I have to approve them myself.

Thanks in advance for your kind words... and your trolling, if you are so inclined.