# Corruption of Capital Markets



## b_bailey (15 July 2006)

Hey everyone, 

I’m new to trading and just wanted to hear other opinions on this presentation about the US stock market….it’s quite long, so if you’re bored, have a look   

It will be interesting to see what other think of this...

http://www.businessjive.com/nss/darkside.html 




Brendon


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## cuttlefish (15 July 2006)

Interesting. Could be a pile of baloney but certainly provides food for thought.

Makes you wonder how protected you are as an individual from these sorts of things if they are out there. 

I'm pretty sure that the ACH (Australian Clearing House) guarantees settlement of trades through the ASX, but I'm not sure how this is underwritten. From the quick look I had it appears the SEGC (Stock Exchange Guarantee Corporation) runs a National Guarantee Fund which provides the funds to settle claims under the regulations, but I'm not sure if this fund could cope with a systemic failure as described in that presentation, and I'm not sure if this is underwritten further.  

It'd be interesting to hear from someone that knows about how this works in Australia - is there any government underwriting/guaranteeing of trade settlements carried out through asx?

It'd also be interesting to know how brokers that provide short selling facilities manage the settlement side of things - do they organise to borrow stock for each short trade?  How do they do this?


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