Markets better hold up today or they will ban shortselling altogether.

Discussion in 'Trading' started by shadowtrader, Sep 18, 2008.

  1. MKTrader

    MKTrader

    Yeah, Japan tried that kind of thing too, and look where it got them...Nikkei at 39,000 in 1990 and just over 11,000 today.

    Fortunately, Japanese are much better savers than Americans, and can survive several decades without a stock/real estate bull market or bubble. Not so sure about here in the U.S.

     
    #11     Sep 18, 2008
  2. ssblack

    ssblack

    It amazes me that financials can't be shorted anymore, but the majority of them (IB's) were doing most of the (naked) shorting on all the other sectors. They can dish it out, but they can't take it.
     
    #12     Sep 18, 2008
  3. Why short sell a stock? Buy a put or write a call.
     
    #13     Sep 18, 2008
  4. mxjones

    mxjones

    'Naked Shorting' Crackdown Exposed as Another Failed Effort to Prop Up Stocks
    by Aaron Task

    If the effort was primarily aimed to stem declines in Morgan Stanley and Goldman Sachs, as was widely reported, the new SEC rules to prevent "naked shorting" are shaping up to be a miserable failure. (Which may explain John McCain's calls for SEC Chairman Cox to be fired.)

    After rallying Thursday morning, when the new restrictions went into effect, Morgan and Goldman shares slumped midday in concert with the broader market.

    The new rules against naked shorting -- the already illegal practice of betting against a stock without a contract to borrow the shares -- will "change the structural DNA" of the capital markets, says Todd Harrison, CEO of Minyanville.com, who has no positions (long or short) in Goldman or Morgan.

    But forcing hedge funds to focus more on compliance vs. trading will not solve the ongoing crisis, says Harrison, a former trader at hedge funds Galleon Group and Cramer Berkowitz.

    The government is "playing a game of chicken with the underlying imbalances" created by the various and sundry efforts to keep the economy afloat after the bursting of the tech bubble and 9/11, he says. The current turmoul is a "natural and overdue" downside from those efforts and the government's efforts, no matter how well intended, can't prevent it from occurring, Harrison says. "Only time and price" can solve what's ailing the financial markets.
     
    #14     Sep 18, 2008
  5. Why not become like France and ban short-selling all together? :mad:
     
    #15     Sep 18, 2008
  6. ElCubano

    ElCubano

    they might even force us to BUY.......noooooooooooooooo :eek:
     
    #16     Sep 18, 2008
  7. mxjones

    mxjones

    What is the rationale behind banning short-selling? How does that help the markets?

    Yeah, it works well for China. Not.

    :confused:
     
    #17     Sep 18, 2008
  8. ElCubano

    ElCubano

    shorts eventually become buyers.....:D
     
    #18     Sep 18, 2008
  9. sprstpd

    sprstpd

    I couldn't have said it any better. But I'll try:

    Financials:
    "Mommy mommy, I hit a kid the other day and took his lunch money, but now that kid is kicking the crap out of me! Save me!"
     
    #19     Sep 18, 2008
  10. ASav

    ASav

    Short selling is now "financial terrorism." Wow. "Unpatriotic". Total crap. Don't let them take any more rights away from you! We may have to reinstate the rule about marching down to the castle and beheading the king.
     
    #20     Sep 18, 2008