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That... seems gimmicky. Like using repurchase agreements to pretend that your balance sheet looks cleaner than it actually is.
by jkhdigital 6y ago
That... seems gimmicky. Like using repurchase agreements to pretend that your balance sheet looks cleaner than it actually is.
- theknocker 6y agoYeah it's actually a practice closely related to naked shorting, sometimes referred to as "naked shorting but totally not."
- fractionalhare 6y agoIt's not really about presentation of balance sheets, it's about liquidity. The explicit purpose of market makers is to provide liquidity, so they have a special exemption to buy and sell shares without being certain they exist. They have to have a good faith belief they will exist though. Usually they're right. Occasionally they're wrong.