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Short selling is over!!!!!!!!!!!
cinman14
Posts: 2,489 ✭
At least for the time being..... Thank God
WASHINGTON -- The U.S. Securities and Exchange Commission intends to temporarily ban short-selling, The Wall Street Journal reported Thursday night. It's unclear if the commission has approved the move, the Journal reported. SEC Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were briefing congressional leaders Thursday night. The U.S. move would follow a similar action by U.K. regulators on Thursday.
WASHINGTON -- The U.S. Securities and Exchange Commission intends to temporarily ban short-selling, The Wall Street Journal reported Thursday night. It's unclear if the commission has approved the move, the Journal reported. SEC Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were briefing congressional leaders Thursday night. The U.S. move would follow a similar action by U.K. regulators on Thursday.
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When the real ammo runs out it's time to resort to words that evoke emotion and trust. Hence today's blurb. Nothing's changed. The barn door has been opened for years and the horse tracks totally wiped out.
roadrunner
They need to unload these shares as the shorts cover and "Reload" the cash for the next round
Edited to add a quote from CNN:
The U.S. Securities and Exchange Commission took what it called "emergency action" Friday and temporarily banned investors from short-selling 799 financial companies.
The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.
"This will absolutely make a difference," said Peter Cardillo, chief market economists at Avalon Partners. "Short sellers are going to have to cover their positions very heavily."
Now will we start seeing a physical disconnect on those 799 selected financial companies where the listed bids are bogus and the actual transaction prices are something totally different...and likely less? I would assume so. Maybe they can remove all long positions from gold stocks and force investors to only short them. Hey, why not?
roadrunner
For the rest of us, it's the usual minefield of more inflation, higher taxes and bigger government.
Frankly, in spite of today's opening 400 point rally in the Dow, I think that the meltdown is inevitable.
Paulson, "a significant investment of taxpayer dollars".
That says it all.
I knew it would happen.
Calls to bring back the uptick rule. LOL
The uptick rule didnt keep tech stocks afloat in 2000-2002.
The media has no idea how markets work. The regulators know, but must appease the populace who only knows what the media tells them.
If they bring back the uptick rule, the markets will really be FUBAR.
Knowledge is the enemy of fear
This will cause all the funds that are shorted to fail and cause another wave of problems!
Also all the government bond funds will suffer.
San Diego, CA
There sure seems to be a torrent of taxpayer dollars being bandied about!
Oh well - the stock market seems to like it, so who am I to complain?
I knew it would happen.
<< <i>Naked selling precious metals is still fully supported. The SEC will get around to looking at that in the near future.
Now will we start seeing a physical disconnect on those 799 selected financial companies where the listed bids are bogus and the actual transaction prices are something totally different...and likely less? I would assume so. Maybe they can remove all long positions from gold stocks and force investors to only short them. Hey, why not?
roadrunner >>
I am pretty sure the government is playing the gold market through an investment bank, and other commodities too. Probably the reason they couldn't let one in particular go down yesterday. There is nothing to stop someone from bazookaing PM's at any time----part of the reason for the disconnect between physical and electronic markets in my opinion. It will be interesting to see when electronic markets turn physical as we approach december delivery dates-----------------------------------BigE
<< <i>New rules only get made when the old ones backfire on the big shots on Wall Street and Washington. >>
I could have sworn you were talking about the Hunt brothers when I read that first line.
You could have said that in 1980, in fact, someone probably did.
Funny how history has a way of repeating itself, isn't it?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Also went short the Profund precious metals index. Both figure to be short term but how short ......? maybe I'll be blown out Monday.
Long term I look for a steady upward move for Gold, (including peaks and troughs) maintaining its overall strategic store of value relative to the worlds economies.
Calls to bring back the uptick rule. LOL
The uptick rule didnt keep tech stocks afloat in 2000-2002.
The media has no idea how markets work. The regulators know, but must appease the populace who only knows what the media tells them. If they bring back the uptick rule, the markets will really be FUBAR.
Apparently Mr. Cox has even less knowledge of the markets. By withdrawing the uptick rule seems he set in motion the forces to take down big banks (ie big bank takes down big bank). He has earned his own page in US history books going forward, right next to Greenspan, Bernanke, and Paulson.
Nothing could have kept stocks afloat in 2000-2002. After a 20 year bull run they were way overdue for a correction. 9-11 didn't help either. US stock markets should have crashed much earlier but Greenspam giving in to irrational exuberance gave them several more years. I agree that the media has no idea how markets work, and neither does the congress. In fact what we have today isn't even a market so I'm not surprised that so few know how to manipulate the Ponzi-scheme to their own end.
I guess it's time to create a new stock index called the "799." At least in this way you can be assured of only having longs as fellow shareholders. Isn't that utopia for the Wall Street crowd? It works as long as no one ever sells though....just like 401k's.
roadrunner
roadrunner, that is something to think about. Now that the babyboomers are starting to retire, the reverse wealth-effect of their withdrawals from retirement accounts might serve to drive the stock market down as stocks are sold off.
Maybe a better place to park some money would be into a dairy farm.
I knew it would happen.
This is a chart of the VIX. As is clearly evident, volatility has been higher in years before the lifting of the uptick rule. It was even high during the bull market of the late 90s. So when Cramer or some of the other uninformed on CNBC say that putting the uptick rule back in place would solve the problem, they are clearly demonstrating their extreme lack of knowledge of market workings.
The elimination of the uptick rule did not happen overnight. It was implemented over more than 1 years time. Volatility, as shown by the chart is cyclical, and we are simply entering another period of increased volatility. Dont hate it, embrace it.
As I mentioned over a month ago when gold began to break down, that its volatility would be increasing and you will have the opportunity to make more $$$$ trading this volatility in gold in the next year, then you did by holding it for the last 5 years.
Knowledge is the enemy of fear
By that logic, anything occuring to the markets following the uptick rule change would be a consequence of that change. In any event, the removal of the uptick rule, and the increased volatility that followed can be better explained by coincidence as other economic forces were at play. But it also doesn't mean that putting the UT rule back into play wouldn't help reduce volatility somewhat. I think it would help but one could never sort out the cause and effect with the forces at play today.
It would be far more logical that the volatility experienced in the markets since the harder times emerged in 2002 were from the same effects that pushed commodities and other assets to the forefront. That would be inflationary and credit/debt effects for one and the lack of a linked fiat currency to stop it. These volatility effects have been with us since the gold standard was removed and swing harder with every major cycle. It would seem to me that inflation and derivative effects from uncontrolled "trading" and "investing" would be far more responsible for today's volatility than an uptick rule change. A simple uptick rule change in either direction can't negate the effects of $1 QUAD in derivatives or 10-15% increases in M3 over the past 12 years. The damage done by hedge funds, banks and funds looking for the newest 'hot" pocket are at the center of the volatility. Unfortunate this is one of the few ways to protect one's money in these days of "advanced Armageddon investment tactics."
It's now clear that Sinclair's warnings of "this is it" well before the BSC failure, and then "it is now," just a month or two ago were dead on as usual. Those who chided him are eating heavy diets of crow. Next on the list is $1650 gold, which per JS will come within only 28 months. I won't bet against him. His only miscue was underestimating how far the FED and Treasury would go to saddle taxpayers with other's debts. Clearly, there is no limit to how far they will go, legal or otherwise. It really "is it."
roadrunner
it would seem the way to go right now, if one was experienced enough, cautious enough and bankrolled enough (can't imagine doing any of this on margin as i'd be doing it all bassakwards)
might try to do this on for play money on ishares and see what gives.