I always love when they present things like a progress for the public health It is a long time that in Europe short sellers have to borrow the stocks ... and it doesn't change everything in stocks behavior. One of the reason is that lenders perceive interests. In France Banks lended stocks of THEIR clients without noticing them and pocketing the interests. When the scandal has been known , well it's easy they change the rules: no interest anymore for the lenders but an interest rate directly paid to the market organisation An evidence that it is just a pretext they say they will even loose the rules for most liquid stocks. So in facts it's also another mean to drive liquidity towards the same big companies. How can you developp an economy when all the money go to the same big ones huh ?
this kind of crap is scary. we are doing what japan did. japan cracked down on short sellers, then the government openly declared that it would start buying the indexes to prop them up. If we get a dem pres and the bear market is still going, I wouldn't be suprised to see that happen. Its either Socialism or Fascism depending on your point of view, but regardless it is evil.
white, just sell the SSF on your equity or ETF - no need to mess with synthetics - one trade and you are short.
The short rule have been introduced in 1933 by the SEC because unfair value manipulation that have rised the price on the most stocks.
The following is today's commentary from Bill Fleckenstein on RealMoney.com: Turning to the news, I need to take exception to a story in yesterday's Financial Times titled "Short-Selling Faces Clampdown by SEC." I will grant it high marks, however, for illuminating the fact that markets make opinions. By that I mean, with the markets having gone down for three years, the people who didn't understand why they were up in the first place are now trying to find a scapegoat. This quote sums it up rather nicely: "U.S. regulators say they are being pressed to clamp down on short-selling by politicians who complain the practice hurts companies." Now I can believe that politicians may be pressing regulators. But let's be clear about one thing: Short-selling doesn't hurt companies. I find it rather interesting that this mistaken notion still receives any press. The implication is that short-selling is all about manipulation, but that the cheerleading by companies and dead fish does not constitute manipulation. Obviously, stock prices can collapse for many reasons. Either they become far higher than they ever should have been, or something goes dreadfully wrong with the business. But neither of those two is caused by short-sellers. If there is any blame to be laid, it should generally fall on an over-promotional management, on the analytical community, or on a crowd that simply got carried away. Tar-and-Featherweight Arguments: And it's not just happening in the U.S. The story says, "Regulators around the world are under pressure to tighten rules on short-selling ... amid concern that it is used by professional traders to manipulate share prices, particularly of small companies." Let me just say that as a short-seller, neither I nor anyone else I know of attempts to "drive" prices lower, and we couldn't even if we wanted to. Could somebody affect the market price of a stock for a couple of hours or a day? Sure, but not much longer than that. And, that tactic would be a recipe for disaster. In any case, the article proceeds along in a lame fashion, talking about the need to clamp down on naked short-selling, which is selling stock that you did not borrow. I don't know anyone who does that, and most brokerage firms will not let you do that. So that seems to be a paper tiger. The other rationale in support of a clampdown was so preposterous that it almost makes the article laughable: "But others say it [short-selling] is too often abused to corner small companies by controlling most or all of a company's publicly traded shares." Now read that again. Short-sellers don't control the float. Somebody can control the float, corner a stock on the long side and precipitate a short squeeze -- which, by the way, was considered a legitimate investment practice in the mania. But a short can't corner a company. Mostly, I think all these claims are much ado about nothing, though that never stopped the press from trotting them out from time to time. The outrage over practices by the actual culprits is certainly ignored in this particular story, and in general. Also rarely seen are stories that praise short-sellers for uncovering the abuses being perpetrated by others.
Nice post tendy! I think the problem is that the politicians attempt to do rules in domain that they don't understand correctly. The buyers that have attempt to buy the dotcom companies at 200$, they was very happy to buy at his moment, but don't forget that in many case a marker maker have done a short for to give the possibility at this buyer this share, without the short this buyer should had to pay higher price! And now don't forget, how long could be the fraud about Enron and these corporation without the short? The share holders could never ask any question before without a serious decline of the market. When a market go alway higher, nobody are concern about the management and fraud, only on a weak market these question suddenly emerge! Without the short, the crash market could be bigger, because many hedge fund keep the good corporations in their portfolio and protect the position until the market comeback, but without the short they will drop the postion and put a bigger pressure on the stock.
COMPLETE BS... "Under current rules, traders can take out "naked" short positions over an unlimited number of shares, putting huge downward pressure on an illiquid stock." 1) just b/c a smaller illiquid can go down quicker isnt an advantage b/c we all know you can burned just as bad on the way up on thw squeeze. "US regulators say they are being pressed to clamp down on short-selling by politicians who complain the practice hurts companies." 1) how does this hurt companies? 2) and what are companies crying about their stock prices falling on short interest, if there company is that good and there stock price that low why arent they buying up these shares in droves both on buyback programs and personally... anyone on ET already knows this so the pint is what to do. this is obviously politically motivated and anti-capitalist. of course fannie and freddie who are making the biggst stink are not capitlist entities so we can lent this anti-capitalism seep into our markets...