SEC Bans Shorting of Financials
Whoever said China, the largest communist country in the world, has a free-er market than the US was dead on. The last time the NYSE banned short-selling, they had to repeal it two days after because it was artificially raising prices (no fucking way!).
What next? Reinstate the uptick rule?
Better yet, why not just follow Pakistan's lead in forbidding the market to drop?
http://www.cnbc.com/id/26439444
For SEC announcement:
http://sec.gov/news/press/2008/2008-211.htm
Comments (7)
So the market is set to keep on rising over the weekend?
What's people's thoughts on this. . .
they could call for a mandatory covering ofall current short positionsin the financials. That would force the market much higher and serve the political purposes of this sham. We're really only one step away from forced buying, anyway.
is that its only temporary....which then leaves me somewhat divided on the issue.
on the one hand, preventing shorts (probably orchestrated byGS和婊子女士加入游说)主要是这样的violation of market dynamics its unsettling (it was fine for previous sessions, but not now? shorting isnt the problem. its the lack of transparency in these institutions. why dont regulators burn the candle all night to fix that?)
...on the other hand tho, aggressive shorting could have continually made flammable the already scorched financial sector...tho i would have liked some explicit proof that this was the case with the announcement (i mean, wheres the accountability?). actually, ive change my mind. im not divided. since when do stock prices CHANGE company fundamentals?BS. this whole moratorium reeks.
one thing is clear tho, regulators have heavy and difficult decisions to make. i respect that.
I think this new SEC rule is outrageous. Whenever there is a market panic, people blame the evil short sellers. In reality short sellers enable faster price discovery. Companies with strong fundamentals cannot be ruinedby excessive short selling. Also, this rule is just a temporary more. When the SEC implemented the short selling rule over the summer financials rallied, only to eventually collapse months later after the emergency order ended.
www.sharpeinvesting.com
Thank you- someone agrees with me! You should be able to play both sides of the market- not simply long- that enable price inflation beyond it true value. People seem to blame the "short sellers" and "hedge fund managers" while its simply bad ideas (who the hell thought selling a $1,000,000 to someone who makes 60k a year is a good idea?). Lew Ranieri said that the federal regulations of thesubprimemarket and bankruptcy laws are what caused subprime- so now we need more regulations!!!!? Come on.
So what do you do? -I work for an investment banking firm. Oh okay; you are like my brother, he works for Edward Jones. -No, a college degree is required in my profession
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Learn moreThis new rule is absolutely assanine. Im sitting here watching my screen saying "so this is what happens where there are no short..." ooooh ahhh eeeee. This is going to put a temporary cramp on some of my friends that are prop traders that have made a retarded amount of money during this crisis.
It will allow for a more solid solution to be drafted over the next couple days and help prevent an all out fallout. Who would have thought thatGSwould have traded down to an 85 handle? Who would have thought MS trades all the way down to an 11 handle? If someone would have told me this last week I would have laughed right in there face but this is the type market we are in. I think its a shorht term fix to a long term problem. I hope this was done because it was absolutely positively necessary with no other choice.
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