Cramer nailed it again How Short-Sellers Almost Destroyed U.S. Banking Forget Bernard Madoff¡¯s $50 billion fraud. The SEC, and the press, should be focused on short-sellers¡¯ attempts to destroy the U.S. banking system, Cramer said. Don¡¯t believe him? Here are the hard numbers, courtesy of a source inside the New York Stock Exchange: Just in the 12 days leading up to the Nov. 24 Citigroup [C 7.40 -0.30 (-3.9%) ] bailout, short selling accounted for over 49% of the total trading volume in that company¡¯s stock. For JPMorgan Chase [JPM 28.63 -2.31 (-7.47%) ], it was 41%. Bank of America [BAC 14.11 -0.82 (-5.49%) ]: 35%. Goldman Sachs [GS 66.46 -1.28 (-1.89%) ]: 40%. Morgan Stanley [MS 13.64 -0.21 (-1.52%) ]: 37%. Wachovia [WB 5.11 -0.18 (-3.38%) ]: 42%. Wells Fargo [WFC 26.07 -0.65 (-2.43%) ]: 42%. As a result, these stocks tumbled anywhere between 69% and 27% over that time period ¨C all because of huge volumes of short selling. You have to remember that banking is a business built entirely on trust. When shareholders and customers see these stocks plummeting virtually without a bottom, then they pull their money, further exacerbating the problem. And you can see that play out in these financials right up to the Friday before the Citigroup bailout. On four days in November ¨C the 6th, 10th, 12th and 19th ¨C the shorts accounted for at least 50% of Citi¡¯s trading volume. On one day it was as high as 71%. In that time, the stock cut in half to $6.40. By then panic had set it, and regular investors started selling Citi en masse. In just one day ¨C Nov. 20 to Nov. 21 ¨C the amount of shares sold jumped 1.5 million and the stock finished its near month-long decline at $3.77. See the pattern? Lack of proper regulation allows short-sellers to hammer down a stock, causing fear among regular investors and customers. These regular investors then continue the selling, further damaging the stock and making the short-sellers a lot of money. Citigroup wasn¡¯t alone, either. This same game played out with JPMorgan, Bank of America and almost all the other big banks. Imagine what would have happened if the government didn¡¯t step in on Monday, Nov. 24. Cramer didn¡¯t hesitate to point fingers at SEC Chairman Christopher Cox. It was Cox who repealed the uptick rule, which his exactly what¡¯s allowed bear raiders to annihilate stocks. Until there¡¯s a return to regulation on Wall Street, this kind of thing will continue to happen. If Congress got a hold of these numbers, there¡¯d be an immediate investigation, Cramer said. Because ¡°this is a true scandal, and it came close to wrecking our financial system.¡±
Cramer nailed what? Cramer has done 4 victory laps claiming a bottom. One down day and he is Chicken Little. Cramer from CNBC is as much of a flip flopper as John Kerry and is as informative as Kramer from Seinfeld. If I had the the time, I would dig up his numerous contradictions.
cramer offically annouced SEC led by COX ran a bigger fraud than Madoff by letting the uptick rule go. I absolutely agree with my dear Mr. Cramer. He really stand behind small investor and trying to perserve and grow their wealth. Merry Xmas, Mr. Cramer!!!!
Good Lord, where to even start with this mental diarrhea? With the smoking gun numbers you presented. How many of those % short were net short at the end of the day? If I short 100,000 Citi, and cover 100,000 Citi before the end of the session what is your problem? There is no net short. There's an equal amount of buying to selling. How much of that volume do you think went home net short? Shorts are not 'hammering' this stock down, investors are. You blame shorts for wrecking the financial system??? Are you Fu**ing serious? How about the management who was drunk on risk? The banks you mentioned are essentially bankrupt. You want someone to blame? Blame idiots like Chuck Prince and Stanley O'Neal. I won't even get into your hero Jim Cramer. I'd rather take financial advice from Cosmo Kramer.
Again, Cramer conveniently forgets to mention that financials got HAMMERED when shorting was ILLEGAL.
My guess is that you are very familiar with the short yellow bus that took you to and back from school every Monday through Friday. Hey, here is a newsflash, that is not really a lollipop you're sucking on at Cramer's house. Cox is in charge of a fraudulent institution, that's besides the point. The uptick rule is nothing more than a gimmick to create edges for professionals. Has nothing to do with stock being shorted down faster. Anyone who really trades should want the uptick rule back for additional revenue. Simple as that.
What I don't understand is why he would remove the uptick rule in the first place? What is the incentive of doing this? It makes going long riskier and going short easier, no? Even if that's not the case, the perception is that he is supporting the shorts. Any way you slice it, Cox was flat out wrong and Cramer is right even if he is wrong. He can argue that Cox is acting subjectively on behalf of a special interest. Again, before someone flames away, read perception.
I am sorry that you lost money in the market. One thing that I tell people trying to learn how to trade is that you need to 'own' your trades. You need to not look for outside reasons for losing but what your not doing right. When you reach the point of understanding this rule of trading you will give yourself a chance to become profitable. Here is my complete comment on the uptick rule http://www.paid2trade.com/?p=299 and I hope you will find that along with these thought useful in changing your results. I wish you the very best and happy holidays. Bob