General short-squeeze, this could get funny

[admin]

There are two reports on ZeroHedge arguing that many brokers have lend the same securities multiple times.
http://www.zerohedge.com/news/denials-be...othecation
If true, it might lead to greater policing, or self-imposed restrictions which could make lending out shares quite a bit more difficult. ZH already mentions a last 'Volkswagen' style short squeeze. Dunno about that, but it would be funny..

[admin]

Here is the original Reuters article:
http://newsandinsight.thomsonreuters.com...n_scandal/

[admin]

Note also the great set of links at the side of that Reuters article:
http://newsandinsight.thomsonreuters.com...n_scandal/

[maui4marko]

STP - maybe they're taking the lead from the banks who hypothecate and rehypothecate over and over until the collateral is "reused" by many. Don't know who's crookeder (word?) the banks or the brokers.

[admin]

Yes, it's something like that. It's pretty amazing stuff, but if there is an official crackdown on this practice (or, alternatively, an exercise in self-restraint due to the threat of an official crack-down), it might get much more difficult to borrow shares..

[Palm]

Interesting that Tusker posted that Schwab had notified him that his shares had been returned as far as being able to be used for borrowing again.

[admin]

Yes, I was actually thinking about that. Anyone else with similar experience?