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  • lemonyelow1 lemonyelow1 • Aug 12, 2007 7:33 AM Flag

    good news out of subprime meltdown

    Fund managers experiencing losses in their fixed-income portfolios who were unable to sell their positions then tried to unwind the trades they could sell � that is, stocks. They cashed in the shares they had purchased and bought back the ones they had sold short.

    This, above, from the NY Times. I believe that the big short position in ANAD arose (in good measure) when quants bet (via a kind of arbitrage) that it HAD TO underperform other stocks and sectors. Now, maybe, they'll cover just to improve their liquidity, likely necessary to deal with redemptions. Also, if your model appears to be broken, you sure don't want to ride it into the sunset.

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    • trikes57 trikes57 • Aug 12, 2007 8:40 PM Flag

      > Now, maybe, they'll cover just to improve their
      > liquidity, likely necessary to deal with redemptions.

      Well the short interest update from Nasdaq should be reported on the 15th (wednesday) and should be published by the 23, so we will see if it has shrunk or grown.

      I'm betting earnings took it down, but it might have rebounded some last week.

      • 1 Reply to trikes57
      • lemonyelow1 lemonyelow1 • Aug 13, 2007 10:51 AM Flag

        I'll take the other side of that bet.... A corollary to "B.F. was SOOOO right," is that a ton of shorts took advantage of the downdraft to put this behind them. Of course, "logic" has proved to be a poor guide to the "speculative"/trading side with this stock.

        Marketwatch's best columnist, a fellow named Hank, I think, has long since maintained that naked shorting is pretty much a figment of the imagination of insiders or shareholders, and I'm coming around to his point of view on that.

 
ANAD
1.95May 21 4:00 PMEDT