ROFLMAO The United States of Socialism I never thought I would see the day the US was worse then Canada for this kind of shit. Get out now while you still can. I hear Dubai is nice....
The EASY part is banning short selling on financials. The ban is only temporary. What happens if they bring back short selling? The unintended consequences of messing with free markets could be more catastrophic. The incompetence of those boys running or ruining financial institutions was fathomless. But NEVER NEVER underestimate the political clowns in DC.
I think they have DESTROYED confidence in our equities markets. How do they ever allow short selling again on those 799 companies? They say it is temporary. But if they set a date to start short selling again, then the day or two before that day, the longs will look to sell and the stocks will crash. There will be no confidence in the markets, period. The government cannot just do what they did and expect ONLY POSITIVE consequences.
only reason why financials are in huge rally mode, now what..... Financials will sell off after this rally, if you had GS at 115 or 100 or MS at 22 or 15 sell today, nothing has changed, they are still figuring out how to fix this problem, this is going to be a rally followed by more selling, there is no NEW bull market or bottom in housing, everything is the same as it was 2 days ago, sell this rally and buy back again later on, no need to think things have been fixed in 24 hours. SELL SELL SELL.
'bona fide' market makers have an exemption from the rule. So when people start selling calls instead of shorting, the option market maker will short. So I doubt this rally has much legs after the open.
There will be selling because everyone will be covering their shorts. They will be raising money to cover their short postions in a lot of things. There will be margin calls. MARKET CHAOS. The winners will be sold to pay for the unearned bump in the dogs.
The Pakistani example of banning short sales: By notablecalls A smart hedgie pinged me with the following: An extreme example comes from Pakistan where the local SEC responded to a stock slump last month by banning short selling and limiting daily price declines to 1% while allowing them to rise by 10%. The initial reaction was a massive 8.6% one day rally followed by 15 straight days of slumping prices amid extremely low turnover, the worst such period for that market in several years. As rioting investors stormed the Karachi Stock Exchange last week, the rules were rescinded."