I just got wind of the latest absurdity being kicked around by the SEC -- they're allegedly thinking of banning short-selling all togetherr:
Amid the spiraling market crisis and mounting pressure from lawmakers, the Securities and Exchange Commission is considering taking the dramatic step of temporarily banning the routine practice of betting against company stocks.{ SNIP }
SEC Chairman Christopher Cox, Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernanke held a closed-door meeting Thursday night with members of Congress. Cox told the lawmakers the SEC may put in a temporary emergency ban on all short-selling -- not just the aggressive forms it already has targeted, according to a person familiar with the matter. The ban might apply to stocks of selected financial companies, to all financial companies or even possibly to all public companies.
I was ready to write a long rant about this but Barry Ritholtz has already done a great job of that tonight. And there's one hell of a discussion about it in the comments on Barry's post as well. I just wonder if they'll also ban people from buying puts. This seems both ridiculous and impossible to me.
I'll say it once again -- we live in interesting times.
P.S. I love what Mac has to say on this topic too:
After hearing that the SEC has decided to ban short selling I have really hit my limit. It doesn't matter anymore. Nothing matters in this market. I might as well throw my computer out the window, along with my charting software. The government has completely taken over our stock market, and if you thought the volatility and manipulation was bad before, just wait for what you are about to see. I guess we haven't just converted to socialism, but instead have moved all the way to a communist government. Way to go guys! Keep up the great work!Honestly, this type of action makes me just want to take all of my money out of my account and just not play this game any longer. It is so rigged it is unbelievable. And I am not saying this because I am about to lose a ton of money or being hurt financially in any way. I am completely in cash and have been successful this year (up close to 90%). We could rally big tomorrow and I honestly just don't want to even participate if we do. The United States Stock Market has officially lost all credibility in my eyes. Maybe it never had any and I was just naive. But the steps today are absolutely ridiculous...
Another sad day for American "free market capitalism"! I highly recommend that those of us who care about these markets hit the SEC up with letters calling out this shameful act of market manipulation potentially on the grandest scale yet.
SEC email addresses here: http://www.sec.gov/contact/mailboxes.htm#market
rule-comments@sec.gov
tradingandmarkets@sec.gov
chairmanoffice@sec.gov
Ridiculous and shameful indeed. The lunatics are running the asylum and the government wants to control stock prices.
Honestly I am not even from the US but it really makes my heart hurt when I see how they are destroying that beautiful land... with all the crap this government keeps doing it seems that there is not much of the REAL AMERICAN people LEFT.
Its just the same as what they do with people like Ron Paul, they just sideline everything that is honest, correct and good.
It is also very sad to see that the government have kept their people so ignorant that the average Joe cannot even get that it is their money who is bailing everything out, with the expense that with so much money printed and given away not only the American People will suck up the losses but the aftermath of explosive inflation and extreme currency devaluation to the point that maybe the AMERO will finally have to be set in place (uh? amero? look for that too) ... I really feel bad for all of you... but dont worry I do also know that we the Europeans are on the list to collapse... Today with this globalization there is not a single chance for any of us to come clean of this mess...
I hope God prepare us all for what is about to come, because no single trial to ban shorts or whatever will avoid people to keep selling because of lack of confidence... We are just retarding the inevitable...
Hang on everybody
Gustav
It is about time crap like this gets banned. Greedy people are destroying our financial sistem with this stupid schemes to make easy money.
There's been plenty of damage done by greedy bulls (people who go long) and greedy corporate executives. Just look back at any bubble. Maybe we should just shut the markets or ban capitalism.