WTF? The USA BANNING short selling like some 3rd world country??

[grapejelly]

http://online.wsj.com/article/SB1221...cle-outset-box

WASHINGTON -- The Securities and Exchange Commission took its most aggressive assault against bearish stock bets by stating its intention to issue a temporary ban on short-selling.
SEC Chairman Christopher Cox briefed Congress late Thursday of the agency's intention to take the extraordinary step of interfering with the market's regular functioning. Short-selling is a trading strategy of selling borrowed stock in hopes it falls and can be repurchased at a lower price.
It's unclear if the SEC's intention has been approved by the commissioners, which is required, and whether which stocks are covered or for how long it will be in effect. Earlier this summer, the SEC moved to restrict certain short-selling practices for 29 days, covering 19 financial stocks.

[GRG55]

Re: WTF? The USA BANNING short selling like some 3rd world country??

http://online.wsj.com/article/SB1221...cle-outset-box

Not alone...

U.K. Regulator Stops Short Selling of Bank Shares

By Caroline Binham
Sept. 18 (Bloomberg) -- The U.K. markets regulator put a ban on short selling of financial shares for the rest of the year after HBOS Plc, the country's biggest mortgage lender, lost 37 percent of its market value over three days.

The Financial Services Authority will also require daily disclosure of existing short positions in financial companies of more than 0.25 percent, the London-based regulator said in a statement today. The rules will remain in effect until Jan. 16...

...``This is the most interventionist action in the U.K. economy that we've seen for quite some time,'' said Chris Brennan, a regulatory lawyer at London-based Barlow Lyde & Gilbert and a former FSA official. ``It's surreal.''

The emergency measures came with approval from the government...

[Jay]

Re: WTF? The USA BANNING short selling like some 3rd world country??

I wonder if this is why SKF hasn't had the fireworks I expected.

[GRG55]

Re: WTF? The USA BANNING short selling like some 3rd world country??

http://online.wsj.com/article/SB1221...cle-outset-box

And they're not done yet, either...:p

SEC Meeting Tonight to Mull Market-Liquidity Rules

Sept. 18 (Bloomberg) -- The U.S. Securities and Exchange Commission is meeting tonight to consider more rules to guarantee market liquidity, SEC Chairman Christopher Cox said...

...``We are likely to take additional steps in the days ahead that are more particularly addressed to this urgent situation,'' Cox told reporters...

[phirang]

Re: WTF? The USA BANNING short selling like some 3rd world country??

I wonder if this is why SKF hasn't had the fireworks I expected.

I wonder if agency spreads WIDEN further...

[Jim Nickerson]

Re: WTF? The USA BANNING short selling like some 3rd world country??

I wonder if this is why SKF hasn't had the fireworks I expected.

Jay, today it was up 19.76 and down 24.51 from its previous close! What is your definition of "fireworks."

[Tulpen]

Re: WTF? The USA BANNING short selling like some 3rd world country??

And the jokers actually think that that will bring more trust into the financial system.

People are completely losing their minds. Short selling actually increases liquidity on a stock. And what are they going to do about options, disallow put contracts perhaps? Just insane!

[marvenger]

Re: WTF? The USA BANNING short selling like some 3rd world country??

naked short selling crack down I can understand. How about forcing the puchase of stock to deliver stock like they're supposed to. Will give a boost to share amrket and give legitimate investors a chance to get out. They wouldn't want that though would they.

[Tulpen]

Re: WTF? The USA BANNING short selling like some 3rd world country??

http://online.wsj.com/article/SB1221...cle-outset-box

Anyone knows if the naked short selling rule is going to restrict options market makers as well?

[FRED]

Re: WTF? The USA BANNING short selling like some 3rd world country??

An time tested American tradition.

Thirty-first on First
Feb. 29, 1932 (Time Magazine)

Following a ruling by the governing board of the New York Stock Exchange that, after April 1, member firms must not lend securities without written consent of the owners, an action to curtail short selling, President Hoover declared:

"There have been discussions between myself and officials of the New York Stock Exchange on the question of bear raids. . . . During the latter part of January . . . there was a large increase in the short account which unquestionably affected the price of securities and brought discouragement to the country as a whole. I again expressed [my] views to the managers of the Exchange that they should take adequate measures to protect investors from artificial depression of the price of securities for speculative profit."

Bush = Hoover?

What politicians don't understand is that a short seller is a buyer, albeit at a lower price. A market in which short selling has been eliminated can theoretically go to zero in a crash.

[jtabeb]

Re: WTF? The USA BANNING short selling like some 3rd world country??

Bush = Hoover?

I prefer DAMN Bush vs. Bush DAM (sic Hoover Dam).

[marvenger]

Re: WTF? The USA BANNING short selling like some 3rd world country??

I agree with no short selling unless the owner has given written consent and can participate in the interest earned from the borrowing of the share. So say a custodian has 50% of its BHP shares held giving permission to be lent out and 50% of this 50% is actually lent out then the full 50% giving permission get to share the interest collected. 75/25 split between share owners and custodians sounds about fair, I guess the market can sort it out.

[Master Shake]

Re: WTF? The USA BANNING short selling like some 3rd world country??

Seems like a smart thing to do at this point. What's "3rd world" about it?

[c1ue]

Re: WTF? The USA BANNING short selling like some 3rd world country??

Bush = Hoover?

What politicians don't understand is that a short seller is a buyer, albeit at a lower price. A market in which short selling has been eliminated can theoretically go to zero in a crash.

Bush = Coolidge
If McCain becomes president, he'll become Hoover.

Obama - not sure yet.

Seems like a smart thing to do at this point. What's "3rd world" about it?

The combination of banning short selling, AND the latest government plan to just buy the bad securities, AND the bailout of an insurance company - not even a Fed member...that's plenty third world.

When this all fails, then we'll get to see the rest: frozen stock exchanges, capital controls, etc.

[nitroglycol]

Re: WTF? The USA BANNING short selling like some 3rd world country??

What politicians don't understand is that a short seller is a buyer, albeit at a lower price. A market in which short selling has been eliminated can theoretically go to zero in a crash.

That's something I hadn't considered, actually. Interesting.