SEC bans short-selling

SEC bans short-selling

news.yahoo.com

The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks.

(visit the link for the full news article)

This is good news. Even if temporary, it can help keep things more stable. You gotta think that someone in authority could have seen this as a need many years ago - especially the illegal (though common) practice of naked shorting.

I've never understood the depth of greed that drives short-selling. But maybe it can be limited a bit.

news.yahoo.com
(visit the link for the full news article)

news.cnn.com
(visit the link for the full news article)

[edit on 19-9-2008 by bonaire]

I disagree, short selling has its place in a healthy market. China does not allow short selling, look at the volatillity in that market. Here is another opportunity to see "the law of unintended consequences". When shorts cover, they put in some support to prices and can even spark a "short covering rally".

With fewer shorts in the game, I really think it is possible to see a 10-30% decline in a single session. 5-10% swings in markets that do not allow short selling are relatively common.

More than anything, banning of shortselling (not just regulating FTD) smacks of desparation.

Those evil "shorts" did not cause this crisis, they are simply trying to profit from it. If these companies complaining about "shorts" were in good shape, "shorts" would not be interested.

[edit on 19-9-2008 by jefwane]

I agree with jefwane. What you're seeing here is government coming to the realization --- way, way too late --- that the whole thing is coming undone. Most of us out here in the real world knew the economy was in trouble a long time ago. I was advising my clients of a serious downturn as early as Q3:2005. Meanwhile, Bush and the 'Brane Trust' kept telling us 'The economy is sound. Everything is fine'. Way to go POTUS. So what we have here is the quinessential 'closing of the barn doors after the horses have left'. Maroons. The whole lot of them.

my clients look to me to know whats best for them, and I'm afraid I'm too paralized by fear to react, is today the day to say goodbye to capital markets for good?

If the short sellers were responsible for taking out the firms, then why after the stocks got absolutely murdered did another company not come in and see just how cheap they were and buy them immediately? Short selling comes back on Oct 2, today they basically manipulated the market because it's options expiration...I find it to be pretty sickening.

Originally posted by prolificobsenitees
my clients look to me to know whats best for them, and I'm afraid I'm too paralized by fear to react, is today the day to say goodbye to capital markets for good?

If you are honestly paralyzed by fear, then you don't need to be any where near an equities market. You think a 4% down day is bad? You realize in 1987 the market was down 25% in a day? If you are anywhere near stocks, please quit your job, you don't belong here.

[edit on 19-9-2008 by yellowcard]

This has already been posted here.

www.abovetopsecret.com...

Later,...... Ausable_Bill

As mentioned in the post above this topic is currently being discussed here:

www.abovetopsecret.com...

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[edit on 9/19/2008 by JacKatMtn]