SEC to Impose More Restrictions on Short-Selling
You can’t make this stuff up. (And if you did, your literary label would be “socialist fiction.”) The SEC is now going to “temporarily” ban short-selling.
Details of course are yet to be announced. It’s not clear what the timetable will be, or which stocks will be affected. Also, this particular story doesn’t say whether it will be bans on “naked” short-selling, or even fully clothed short-selling.
I stand by my earlier opinion that the completely useless ban on naked shorting back in July had the sole purpose of softening up the public, i.e. getting them used to the government meddling with shorting. Back then nobody raised a fuss, because the ban was so easily skirted. (It would be as if the government banned people from saying, “Bush is a big a-hole” but everything else was legal. The ACLU might not even bother bringing a suit, because critics of Bush could still legally say, “Bush is a huge a-hole.”)
BTW here is the madman Cramer spouting nonsense about short sellers, and how the SEC is to blame for our financial crisis. I guess it’s just a coincidence that these evil short sellers spread scurrilous rumors about Bear Stearns, Fannie & Freddie, Lehman, and AIG. Luck of the draw, I guess. The shorters could just as easily have destroyed the share prices of Exxon and Shell, right?
UPDATE: Here is Robert Wenzel with his angry yet cogent analysis. Warning, he uses some phallic metaphors in describing investment bankers. (And yes, now you have no choice but to click on the link.)
