Germany announced last night that it would ban short-selling, an unprecedented step when there is no cataclysmic emergency. The ban has caused stocks to drop precipitously in worldwide markets.
Global stocks fell Wednesday after Germany shocked investors with measures designed to hamper market speculation, and data showed U.S. consumer prices turned negative last month.But the euro bounced back broadly amid rumors that the Swiss National Bank had intervened in the currency market, buying euros to drive down the price of the Swiss franc, which has been a haven for investors worried about Europe’s problems.
The German financial regulator BaFin announced late Tuesday that it would ban naked short-selling in shares of 10 of the country’s most important financial institutions. The ban, which took effect Wednesday and will last until March 31, 2011, would also apply to naked short-selling of credit-default swaps and euro-zone government bonds.
In a short sale, an investor sells borrowed shares, hoping to buy them back later at a lower price and profit from the difference. In a naked short sale, they sell without borrowing the shares first.
Such bans were enacted at the height of the crisis in autumn 2008, but analysts said Germany’s move suggested that the situation might be getting worse.
Most experts agree that it is the ban that is adversely effecting stocks, but it is conceivable that it could be some other event. If it was Germany’s ban that had this effect, one wonders if this is what Merkel hoped to accomplish…
A financial regulation bill has been in the works for weeks now at the Capital. The controversy didn’t even wait until the debate to start–the Democrats couldn’t even muster a vote to get cloture. That means they could not even open the bill for debate because of a filibuster by Republican senators. That has come to an end today.
Republicans have dropped their objections to Democratic efforts to begin debate on a sweeping overhaul of financial regulations.The move ended GOP tactics that had stalled the bill. Republicans said they would attempt to change the bill on the Senate floor after reaching an impasse with Democrats on efforts to compromise in private talks.
Richard Shelby, the top Republican on the Senate Banking Committee, said he had received assurances that Democrats would adjust the bill to address GOP concerns that it would perpetuate bailouts of banks.
Regardless of your politics, a debate is likely to be more productive. Republicans are hoping to change the bill on the floor of the Senate. The bill will have massive effects on business in the United States, especially in the financial industry, but also on the larger economy.
Despite high fuel costs that have pushed up the overhead costs, Carnival is boosting its forecasts for 2010. They claim more people will be booking and prices, in general, have risen–helping to offset the increased overhead prices from rising fuel costs.
“I think we’re surprised at the strength of pricing that has come back this year,” said Howard Frank, vice chairman and chief operating officer.
In addition to raising its fiscal-year earnings outlook, Carnival said it expects revenue per bed per day to rise 2% to 3%. It had forecast revenue yields flat to up slightly.
Carnival also forecast second-quarter earnings of 26 cents to 30 cents, with revenue yields up 1% to 2% excluding currency changes. Analysts projected a 24-cent profit.
These are pretty strong earnings for a company that should be getting hurt even more than it currently is by the recession. Cruise lines are basically luxuries and luxuries suffer the most during tough economic times. Still, with innovative business strategies, this bad luck can be reversed.
A 30-second advertisement during the Superbowl costs a company anywhere from 2.5-2.9 million dollars. For that kind of money, you reach the largest television audience of the years. Every year there is a fierce competitiveness over the advertisements that play during the Superbowl–mostly in an effort to be humorous. In that regard, it seems one particular ad was successful. While most of the ads were considered lackluster, a few stood out.
Sure, there were a few winners, including that Snickers ads with former “Golden Girl” Betty White. “Who doesn’t love a commercial with tackling senior citizens,” said Chris Pape, Genuine Interactives chief creative officer.
The Snickers ad worked, he said, because it was so unexpected and funny.
Rubert Murdoch has long been considered one of the most savvy minds in the media industry. He currently is chairman and President of NewsCorp, one of the largest media conglomerates in the United States. However, he is currently in the process of making a move which many find questionable from a business point of view. Newspapers’ goal have always been to expand readership which would afford them the ability to charge more for advertising. This basic scheme has kept newspapers in business for hundreds of years. Although subscriptions or sales of newspapers have always been a part of the profit schemes, it has never been the profit center. Rupert Murdoch said today at the U.S. Federal Trade Commission’s workshop on journalism in the Internet age that news aggregators, like Google, had no right to use his newspapers’ articles or materials and not pay for their production.
News Corp. is considering blocking Google Inc. from displaying its news articles and is talking to Microsoft Corp.’s Bing search engine about listing only on its site, people familiar with the matter said last week. Murdoch said last month he may stop Google from scanning and indexing stories from his newspapers, which include the Wall Street Journal and Times of London.
It seems to me that NewsCorp stands to lose a great deal of its traffic overnight by switching from one of the most well-known and respected search engines to a much lesser utilized one like Bing.