Banning short selling is INSANE!

[PaceAdvantage]

And the folks who instituted this new policy are IDIOTS, MORONS and DOPES!

The general public greatly misunderstands the short selling process and the politicians and head of the SEC knows this, and knows its an easy sell to pass this nonsense of a law, manipulating the markets in the process.

THERE IS A REASON STOCK PRICES GO DOWN. STOCK PRICES GO DOWN BECAUSE COMPANIES ARE NOT HEALTHY.

Nobody wants to SHORT a healthy company's stock. NOBODY.

Does anyone here honestly believe that people go around shorting stocks for the hell of it? Short selling is RISKY. There is INFINITE RISK associated with selling short, as a stock price can, in theory, continue to rise forever.

I leave you with this thought:

If I had trillions of dollars at my disposal, and just for the fun of it, decided to short the shit out of one of the most profitable companies in the world (lets say EXXON), and I was able to single-handily cut its stock price in half or more, does this really have any material affect on the company's ability to generate profits in the future?

Of course not. So to claim that these 799+ financial stocks that are now on the "no short list" have short sellers to blame for their flailing stock prices is insane.

These companies have seen their stock prices suffer for a reason, and it isn't the fault of short sellers.

Now, naked shorting is a whole other ball of wax, is ILLEGAL, but was not (until recently) STRICTLY ENFORCED by the SEC. The SEC should be abolished from top to bottom for not enforcing the naked shorting laws, and a new organization should rise up in its place.

[pandy]

I agree, but naked selling has to stop. This is suppose to be a securities exchange, not a casino.

[LottaKash]

Can you spell....B.I.G.B.R.O.T.H.E.R....?

best,

[skate]

Welp


They didnt ban shorts. Temporary limits on a few, was done.

In the stock market 'phsycology trumps math'.

imo, thats what they are doing

[sammy the sage]

Can you imagine you're a grocery story and your milk or fresh fruit bowls are about to expire....yet THE GOV'T tells you...you CANNOT discount it to move it!!!

All previous post's here are ALL accurate in this thread...AMAZING for ONCE!

That said...what does one do about it???

There's an infection/gangrene in our toe...but instead of cutting it off...we'' just wrap it up!!!

Wonder what's gonna happen to the rest of the leg...or even the body???

Any constructive thought's here on how to make lemonade outta lemons???

[PaceAdvantage]

And in our next down move (hell, futures are already down about 100 points as I type this), who is going to be there to provide an orderly market when the financial stocks are TANKING (and yes, they WILL TANK again, even WITHOUT the shorties).

You see, when a stock is moving DOWN, SHORT SELLERS are TAKING PROFITS, COVERING THEIR SHORTS by BUYING!

Without short sellers, there is no COVERING ON THE WAY DOWN, and therefore, the next down moves in these stocks could be WORSE than when shorting was allowed.

Have fun!

[sammy the sage]

^^^^^

So what's the best play here?

Buying foreign paper, gold/silver, Other????

[so.cal.fan]

I heard a TV commentator use the term....."the People's Republic of Wall Street".

[lamboguy]

this guy paulson got lots of friends on wall street. all this did was give them time to get out of their positions and dump them to the beleiveing public.

this change the rules in midstream is like a team that is winning a baseball game that is in the ninth inning and extending the game until they are happy with the outcome, or moving the finish line in a horse race.

this is not the first time they have changed rules in midstream, and probably not the last.

no one can be happy with this move, and the worst of it is that this christopher dodd and barnie frank goes along with it. they must be in the tank too. i am sick of these guys that claim to be our leaders and act as if we are the enemy.

[Valuist]

^^^^^

So what's the best play here?

Buying foreign paper, gold/silver, Other????

There is a play here: the SKF. This is an Ultra Short Financial ETF, meaning that it tracks a number of top financial companies, and does the opposite, in this case by I believe a factor of 2 (maybe DJ can confirm). When companies like BAC, GS or WB start to tank, this ETF goes up (and the opposite is true as well). Just last Monday, the SKF closed at over $132. But the governments actions helped drive the SKF down all the way to $87 on THursday and it closed on Friday at exactly $100. You don't need a margin account and you can short the financial sector just by buying this ETF. The other would be to buy puts against some of the death spiral companies from last Thursday morning: GS, MS, STT and NTRS.

[bigmack]

no one can be happy with this move
Would you like to see how unhappy you and the world would be without the move?

Other countries are about to make similar moves. The water is rising fast and someone has to build a dam. We'll deal with the guilt/blame and culprits later. How bout doing something to minify the losses?

[ddog]

And in our next down move (hell, futures are already down about 100 points as I type this), who is going to be there to provide an orderly market when the financial stocks are TANKING (and yes, they WILL TANK again, even WITHOUT the shorties).

You see, when a stock is moving DOWN, SHORT SELLERS are TAKING PROFITS, COVERING THEIR SHORTS by BUYING!

Without short sellers, there is no COVERING ON THE WAY DOWN, and therefore, the next down moves in these stocks could be WORSE than when shorting was allowed.

Have fun!


Pa,

Excellent points in both your posts in this thread.

For once we 100% agree.

I hope it's not what I think is going to happen, but I smell a crash of epic scale and a wild infaltionary spiral OR more than a few holding this junk paper will not be able to part with it and then have to take the hit for the obviously wildly inflated valuations so maybe the whole thing will be less than meets the eye!

A guy can always hope, right?

Of course, the really monstrous part of this , is that once we pour a few trillion at this, then no matter who gets elected we will NEVER be able to justify saying NO to anything.

Also, I assume that the same clowns and half-wits that wrote all this crap in the first place will NOW be hired by the gvt to manage the "work outs" of all this trash on the gvt dime.


It appears WE will bail out the freaking WORLD if they ask us to.

I don't know how that works exactly???

Does anyone even KNOW what the deficit will be next year or the next?

I would expect in the trillion per year range, of course you need to start counting all the money we spend that is not even on the books.

I am not even convinced that the end of the world would happen if we just played this thing out - no king paulson needed.

I guarentee you there is private money out there if we would just force these crooks to open their books and lay it all out there.

[Tom]

Can you spell....B.I.G.B.R.O.T.H.E.R....?

best,

The way they have playing lately, it is more like B.I.N.G.O. !!!

[ddog]

Would you like to see how unhappy you and the world would be without the move?

Other countries are about to make similar moves. The water is rising fast and someone has to build a dam. We'll deal with the guilt/blame and culprits later. How bout doing something to minify the losses?

the 50-50 shot here is that doing THIS will not make it better.

When the water is rising is TOO late to be making rash decisions.

Let's just wait a bit and slow down and see what the water depth really is.

[lamboguy]

good luck if you think this stop the shorts is a good thing.

its like walking up to the sports book, the steelers are playing the raiders, and they tell you if you want to bet the steelers you can bet all you want, if you want to bet someone else, go somewhere else. are you going to bet into that type of senario?

and with thsi move, who is ever going to trust a word the united states government says?

[chickenhead]

I guarentee you there is private money out there if we would just force these crooks to open their books and lay it all out there.

It's not exactly clear to me how the gov't plans on getting them to sell to them (the gov't), even.

[Valuist]

Pa,

Excellent points in both your posts in this thread.

For once we 100% agree.

I hope it's not what I think is going to happen, but I smell a crash of epic scale and a wild infaltionary spiral OR more than a few holding this junk paper will not be able to part with it and then have to take the hit for the obviously wildly inflated valuations so maybe the whole thing will be less than meets the eye!

A guy can always hope, right?

Of course, the really monstrous part of this , is that once we pour a few trillion at this, then no matter who gets elected we will NEVER be able to justify saying NO to anything.

Also, I assume that the same clowns and half-wits that wrote all this crap in the first place will NOW be hired by the gvt to manage the "work outs" of all this trash on the gvt dime.


It appears WE will bail out the freaking WORLD if they ask us to.

I don't know how that works exactly???

Does anyone even KNOW what the deficit will be next year or the next?

I would expect in the trillion per year range, of course you need to start counting all the money we spend that is not even on the books.

I am not even convinced that the end of the world would happen if we just played this thing out - no king paulson needed.

I guarentee you there is private money out there if we would just force these crooks to open their books and lay it all out there.

I don't think when the ban is lifted we will have a crash of epic proportions....I think there will be money to be made on the short side for SOME of the financials but as long as the Fed has the bailout plan for all the crappy loans, companies like Wachovia, Wells Fargo, BAC, JPM and others with bad mortgage money will be protected, for the most part. Its the death spiral stocks I mentioned earlier in the thread that I think are most vulnerable. The short sale ban may have been for 799 companies but it realistically was made for a very select few.

[lamboguy]

instead of just stopping short selling, the government should just set the prices to whatever they feel like, that way there would be no need for the stockmarket, and make those guys on wall street get real jobs. that's the way it was in comunist russia. the people there got sick of it after 40 years. maybe it will take the people in this country that long as well!

[Valuist]

Jon Najarian of Fast Money on the short selling ban:

http://www.cnbc.com/id/26838820

[DJofSD]

SKF -- yes, it's a double short. Another ETF that's an ultrashort is DUG which is for oil.

[riskman]

Does anyone know what a "reverse-index fund" is and what role it would play in your portfolio.

[ddog]

use to hedge your longs, however since they are betting on "whatever" to drop, i assume they along with the evil oil specs will be outlawed soon anyway.

:confused:

on a not strictly related subject, i notice the wipe out of the preferreds divs in the fan/fre deal is going to help kill lending from main street banks, just as i thought.

I have worked with many of them for 20 years and I don't know where the feds got the idea that the small main street lenders had no exposure to that stuff???

just don't get it.

[skate]

Oh well, most know my take.

that being very simple, apply money to the money problem.

A debt of 7% of GDP is puny.

[skate]

But, Hey hey hey, i still can see problemos.

Credit default swaps are 62

Trillion in debt. A decade back, they were $144 Billion.

Now That's a bunch of bull.

[riskman]

use to hedge your longs, however since they are betting on "whatever" to drop, i assume they along with the evil oil specs will be outlawed soon anyway.

:confused:

on a not strictly related subject, i notice the wipe out of the preferreds divs in the fan/fre deal is going to help kill lending from main street banks, just as i thought.

I have worked with many of them for 20 years and I don't know where the feds got the idea that the small main street lenders had no exposure to that stuff???

just don't get it.

ddog--Thanks --will do some research.

[PaceAdvantage]

And in our next down move (hell, futures are already down about 100 points as I type this), who is going to be there to provide an orderly market when the financial stocks are TANKING (and yes, they WILL TANK again, even WITHOUT the shorties).

You see, when a stock is moving DOWN, SHORT SELLERS are TAKING PROFITS, COVERING THEIR SHORTS by BUYING!

Without short sellers, there is no COVERING ON THE WAY DOWN, and therefore, the next down moves in these stocks could be WORSE than when shorting was allowed.

Have fun!And today was the prime example of what I talked about here.

Hey, the SEC banned shorting...the market is not supposed to go down anymore....:lol: :lol: :lol:

[ddog]

And today was the prime example of what I talked about here.

Hey, the SEC banned shorting...the market is not supposed to go down anymore....:lol: :lol: :lol:

you wonder if the guys making the rules ever played the game , HUH!!!

I think paulson may come out with this as the next plan.
No selling allowed.
CLose the markets for a month or two , then it's all on the next guy's plate.

They are already making it hard to buy gold.

[wonatthewire1]

And today was the prime example of what I talked about here.

Hey, the SEC banned shorting...the market is not supposed to go down anymore....:lol: :lol: :lol:


But there needed to be a climatic sell off to "finish it off"

Next - a good sized base for a year or two would be nice

:)