What happens to those existing short positions like Jim Rogers'? Do they have to be covered immediately?
They could declare a special dividend equal to the current stock price. Or they could buy back the entire float of the company. Of course, to do that they would actually have to be solvent and have some cash in the first place.
Good point. Roast these noobs for their foolish ignorance. Also let us consider - Dick Fuld SOLD SHARES in LEH in the last week. Despite trading at a pitiful valuation, he did not buy a single share; the company did not launch a buyback program. What gives? If the company had any value, surely they would have been buying in spades? Answer - Dick Fuld and the Lehman board agreed with the shorts, with Buffett, with Dubai Investment Authority, and with long-term buy & Hold investors who wouldn't touch it with a bargepole...the company had no value whatsoever.
This is the most ridiculous thing I've ever read. In a trading world dominated by hedge funds, many of which are market neutral ie long one sector, short another now you want us to believe that all of the sudden all those existing short positions will have to be closed out? Seems the mantra tonight is buy first, ask questions later. This could turn out very badly.
Because then there would be no scapegoat to blame and deflect the moron public from what has been happening (or rather NOT happening) over the last 8+ years to get us to this point.
All these bailouts and scramblings to 'smooth things over' such as by banning shorting, reek of desperation. I think the authorities are aware of just how bad the economy is and have been for some time. They initially tried to close their eyes to the problems by trying to BS their way thro by saying 'things are not as bad as we thought' blah blah and hoped that this would work and people would continue believing them. Now IMO the shit has hit the fan and they're having to scramble to take desperate measures. I'm not saying the measures are not justfied. Just that they should have been regulating the market and especially the banks from the beginning. If they had been we wouldnt be in the mess we are now.
I mentioned elsewhere: I think that there should be a ban on all selling, both long sales and short sales. Once you buy, you own it for life... A market with no shorts would see stocks open with $00.00 bid and crash in the first few minutes of trading after the tipping point, right? At least with a natural market, there is not the possibility of such artificial altitude. Just keep changing the rules as long as you can. Take AIG out of DJIA, bail everything out, etc. until the music finally crashes to a halt once and for all and the end result may be far worse. Maybe the trix will work.