- 1901 Northern Pacific Railroads
- 1923 Piggly Wiggly [read great twitter thread by @dollarsanddata ]
- 1980 silver short squeeze by Hunt brothers
- @Volkswagen (attempted takeover by Porsche)
What's new? combine social media to coordinate + "meme investing"
What's the same? (historical saying)
"He who sells what isn't his'n, must buy it back or go to pris'n." (Daniel Drew)
Policy questions:
- to what extent should short-positions be made transparent or not? transparent short positions allow people to coordinate short squeezes.
- limit the number of short-positions (short-interest) to a fraction of the outstanding shares (or free-float)
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The Fed took aggressive action today to prop up U.S. businesses, but these policies won’t necessarily reach small and medium-size enterprises (SMEs). This is a thread on why and what could help. Our latest proposal focuses on SMEs: scholar.princeton.edu/markus/news/co…
The Fed’s usual “capital markets approach” doesn’t reach SMEs. Most small business funding relies on banks and trade-credit (FinTech covers only 10%), and most SME loans are not securitized and traded, but held to maturity and not traded on the secondary market.
What can be done next as the Fed looks to help Main Street? The Fed should “evergreen” existing SME loans by offering banks low-cost refinancing against the collateral of existing loans that are refinanced.
🦠#CoronaCrisis crisis & European Economy: (1/6)
What's good for 🇩🇪Germany, should be good for 🇪🇺Europe
German initiative of
(a) Kurzarbeit (gov. covers part of wage bill) [transfers to firms/workers] and
(b) Liquidity bazooka = low-interest credit for debt re-payment
(2/6) Credit is granted to firms by (national) fiscal authority for x, say 7, years.
Why tax authority? Tax authority can enforce repayment (together with tax collection) + senior of credit status for gov. => limits credit risk
(credit is as safe as 'tax credit')
(3/6) @EIB grants funds to national authority and issues bonds to sovereign wealth funds, @ECB, @ESM, etc.
🇪🇺 @EIB is the European equivalent to 🇩🇪German development bank @KfW