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Showing posts from May, 2010


German financial regulator declared a ban on naked short sales of euro zone bond and 10 financial stocks listed in Germanyon late Tuesday after market closed. The ban will took effect from midnight Tuesday and it extends to uncovered credit-default swaps on euro-zone debt. The ban doesn’t cover business done outside Germany, so a Germany company doing business in USA will not come under its cover.
As a result of this ban the stocks were lower in Asia, Europe and the U.S. German bond prices surged and the yield on notes were at record low. Prices on the US treasuries were also trading higher. The cost of insuring European sovereign debt against default using credit-default swaps initially dropped sharply.
The German finance ministry said the German ban could be expanded to include naked short-selling of all German shares, stock derivatives, derivatives related to euro-zone government bonds and any euro currency derivatives that don’t have role in hedging against currency risks.


For decades, the U.S. dollar has been the reserve currency of the world. This has given the United States an extraordinary amount of economic power, but as the U.S. economy has started to come apart over the past decade, other nations have increasingly sought to move away from the U.S. dollar and find other alternatives. For a long time it was thought that the Euro would become the next great reserve currency of the world.
Now where others can take shelter ?