This gov ban on short-selling reminds me of the rule changes in the NFL. Defensive players are always complaining that rule changes always favor the offense, because fans want to see more points, not less. So they make it easier for the offense and more difficult for the defense. More exciting games, you know. The U.S. government decides, in all their great financial wisdom, to change the rules of the stock market in the middle of the game, a game they're losing, so they can make it easier for the bulls. A trader/investor can no longer, at least temporarily, trade the market as if it might go down, they can only play it as if it might not go up, by selling, getting out. Because profiting by a stock going down, which they all do at some time or another in the natural rhythm of an auction market, is evil, it's un-American. They seem to ignore the fact that shorts also provide liquidity and can be just as wrong as anyone else, sometimes providing impetus to a bull market. It's certainly a band aid (aren't short-sales a relatively small part of the market? Will it really have that much of an impact?), but to me it seems more like a blindfold, as the government thinks the bulls will cheer that the markets are not really in trouble because, look, nobody's going short! Everybody's happy and everything is peachy-keen! It's weird, as if the NFL made a rule where tackling is no longer legal. The offense has to screw up on its own, a receiver has to miss the pass or a runner trip over his own two feet. Think of the high-scoring games we'd see then! It's not fair and it's not right and it completely skews the fundamentals of how the game is played, but it sure sounds good and will play well w/the American public, at least for a while. Harold
The US is guaranteed toast now. Who wants to trade in a market like this? By the way, when does this prohibition on short sales start? Or is it just a rumor?