Well the SEC (along with the apparent aide of the British) have stopped short Selling of Companies in the Finance sector.
No Short Selling
799 to be precise.
799 Financial Companies Off Limits
I guess, like everybody else in the world, I should be addressing this. It is interesting news. Interesting in its less common, negative, connotation. With Lehman Brothers going bankrupt we have now witnessed the biggest bankruptcy ever (in America anyways). What does this mean to the world? I have no idea. Clearly people with more power and money don't know whats going on so why I should I pretend to?
Here we have a person, who McCain said he would fire, coming out guns a blazing two days later. Is this a rash decision brought on by market turmoil? Is today really that much worse than say Wednesday or when they stopped short selling on a dozenish shares awhile ago? Or is it just now Cox is worried about his livelihood? Okay, That's probably unlikely since I am sure the guy has other money and head of the SEC does not seem like the best job right now anyways. But why are we so late on this? Is it so bad right now that people keep thinking "It can't get worse" then it does, and they are left thinking of the next way to fix it?
Is Short selling all that bad anyways? Are they essentially saying that if you have money in the financial markets right now you are going down with the ship?
What about the situation where you own X amount of shares in company A and believe that it is only in turmoil because the market as a whole is. You don't want to lose money but you also want to keep your shares. You short -X shares to hold a market position then in the future when the market changes you buy X shares back. Are things like that allowed? Is it just 'malicious' shorting they are worried about?
The markets are going to lose a lot of liquidity over this.
Should you even care? Do you have a job? Do you need a job? Do you own a house? Do you have insurance? Do your parents own a house you plan to inherit? Do you hope to retire at some point in the future? I think we reached the point sometime in August where even lay people with no money from lower class parents who rent a property and have a six month contingency bank account need to be worried. Shit that's me.
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2 comments:
i think the short selling ban is more moral/political than anything.
it makes the idiots think that the government (because they are idiots) is temporarily suspending greed; and thus indirectly blaming the derivatives brokers for the "crisis".
putting a ban, or banning a put if you may, on 799 stocks won't do anything.
I will.
I think it is extremely political and if anything will cause market turmoil. I think we will see this week how there plan is working.
I am glad they managed to get other central banks in on it.
Though if it is like the Iraq coalition the $180 billion could be mostly from America with other governments just offering a token amount.
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