Citigroup Lobbying SEC to Reinstate Short Selling Ban....Breaking

Discussion in 'Wall St. News' started by ByLoSellHi, Nov 20, 2008.

  1. The fed has pushed us into excepting globalization and in the process destroyed our manufacturing sector
    --------------------------------

    There are two economies: A manufacturing economy or a market economy, the US just made a shift to a market economy, all we had to market though was anything that could be produced with a pencil and paper which in this case were financial instruments. We have just run out of products to market because there is no money.

    As far as SS to finance the war. it's red herring. SS is an illusion that pundits drag out of the closet once in a while when they want to discuss fiscal irresponsibility using easy math.
     
    #21     Nov 21, 2008
  2. Mecro

    Mecro

    Nice job confirming that you have no idea how the uptick rule works or even its history. Only those who simply do not know or are plain stupid think that the uptick rule is meant to support the market. Its purposes when it was enacted were different: 1) Public Relations 2) Exploitable tool for the insiders. Just like the SEC as a whole.

    It will be a positive, to the traders' bottom line, lol.
     
    #22     Nov 21, 2008
  3. Mecro

    Mecro

    You need to realize that the Fed is the financial system. And it is doing exactly what it was designed to do.
     
    #23     Nov 21, 2008
  4. Zodiac4u

    Zodiac4u

    Lots of refreshing insights to learn from, you certainly have a lot to offer. I can see you've spent a lot more time in the markets, as well as in front of a computer. Have a nice day.:)
     
    #24     Nov 21, 2008
  5. TraderD

    TraderD

    3.25 ...ouch! when you think it can't go any lower, it smacks down again...

    Now a bottom?

    1.5?
     
    #25     Nov 21, 2008
  6. poyayan

    poyayan

    No a problem anymore since you can't short stock under 5 bucks...:)
     
    #26     Nov 21, 2008
  7. Citi got 25 billion in bailout money. Why don't they just use 4 billion to buy back a billion shares of stock? That would cause a huge short squeeze.
     
    #27     Nov 21, 2008
  8. The market cap is only $20 billion now.
    The government might as well just BUY them lock, stock, and barrel.
     
    #28     Nov 21, 2008
  9. Vikrit cares more about protecting the bonus pool than shareholders. He should be replaced.
     
    #29     Nov 21, 2008
  10. http://www.cnbc.com/id/15840232?video=935343729&play=1



    Interviewer: Let’s talk shorts. Harvey Pitt is former SEC chairman and founder and CEO of Kalorama Partners. Harvey, great to have you with us. Of course the news here is that Citi is asking Congress and the SEC to reinstate the temporary ban on short selling. Harvey, this seems almost like an act of desperation on the part of a company whose stock is just going down and down and down and they have no answer for shareholders.



    Harvey Pitt: Well I think that’s exactly right. The fact is this is a real plea for help and real act of desperation. It’s only going to make matters worse for Citi Group. It’s not going to solve their basic problems. Their problems were caused by bad investments, bad management, lack of transparency and no real risk management efforts to avoid the problems they now confront.



    Interviewer2: Chairman Pitt, do we need to bring back the Uptick Rule? Would that make a difference here at all?



    Harvey Pitt: I don’t believe so. The Uptick Rule was almost non-existence in terms of its detrimental affects. There’s a very simple solution and the SEC has it and they know what it is.



    It’s very simply this. If you want to sell a stock short you have to have a legally and forcible right to produce that stock on settlement day. That’s all it takes. If the SEC does that people will not be able to sell short unless they have actually first located and gotten their stock.



    Interviewer2: In other words that would do away with naked shorting right?



    Harvey Pitt: Absolutely; and naked shorting is what’s causing a lot of the problems in the market.



    Interviewer2: Because nobody is forced to deliver. Nobody must deliver. Too much of that going on.



    Harvey Pitt: That’s been the real problem. People in affect are just gambling. They’re assuming the stock price will go down. They then spread false rumors to help the stock go down, but they have no skin in the game because they haven’t committed to produce the shares that they purportedly are selling.



    Interviewer: So if that is at the root of the problem, how do we close that loop?



    Harvey Pitt: Well I think that loop has already been closed by the proposals that the SEC has out and that hopefully they are going to be finalizing.



    Coming back to the Uptick Rule or banning all short selling will actually hurt investors all across this country because short selling creates more liquidity as long as the people who sell short are economically involved in the transactions and stand to lose as well as to gain.



    Interviewer2: Actually Chairman Pitt, Melissa sort of raised this issue, but it seems like whenever a bank is on the brink you do hear all of a sudden again the cries against short selling, but as you just mentioned there is a benefit to it in increasing liquidity into the marketplace and elsewhere.



    Harvey Pitt: There’s no question. When I was at the SEC and we had 9/11 corporations all over the country asked us to eliminate short selling for a temporary period. We wouldn’t do it because we were concerned that it would dry up liquidity.



    As it turns out that was the right result and I think here allowing short selling, but making sure that people actually are committed to their transactions is what’s required.



    Interviewer: Harvey, does the SEC at this point need to say no to Citi Group just by virtue of the fact that if it says yes to Citi there is going to be a long line of people behind Citi asking also for them to be included in this temporary ban.



    Harvey Pitt: Absolutely; I think we’ll see it all over. The SEC was pressured earlier last month to engage in a ban on all short selling for a temporary period. I believe that was a mistake although I know why they did it. We cannot afford to repeat that mistake.



    Interviewer2: Mr. Pitt, we are awfully grateful to you for staying up so late and joining us tonight. We appreciate it.



    [End of Audio]
     
    #30     Nov 22, 2008