Roller coaster ride continues

[sweeps]

The stock market is up another 2.5% today. Wow.

I am stunned that ALL short-selling has been temporarily banned.

[Broken Arrow]

Hehe, short-sellers are screaming like their house is on fire right now. They're all running for cover. Some are using words such as "slaughter" and "witch hunt".

I've heard of a good rebuttal to this ruling, and it is basically that naked shorts are the problem, and better oversight is what is needed, not an out-right ban. I agree with this, but given the current climate, I'm not terribly against it. The market needs to stabilize, and fast, before it gets any worse. So long as the ban is effective only as long as it is needed to stabilize things, I'm not opposed to it.

In the meantime, we're having a bit of a rally. However, I'm already out. I can't complain. My last trade gained 30% because of this....

[atomicrc11]

According to this article:
Stocks soar as officials confirm gov't rescue plan: Financial News - Yahoo! Finance

It looks like the ban of shorting is only on 779 Financial stocks. Regardless of the ban, naked shorting was becoming a big problem.

If it were for shorting, the financial stocks wouldn't have gone down so far, people would have left their money in banks and we wouldn't have such a big crisis on our hands.

[sweeps]

If it were for shorting, the financial stocks wouldn't have gone down so far, people would have left their money in banks and we wouldn't have such a big crisis on our hands.

Banning all short selling though? That to me is drastic. As this article notes:

Moreover, restricting short-selling too much could cause more harm than good, securities market experts say. By borrowing and then selling shares from investors who would otherwise simply hold them, short-sellers can be a valuable source of liquidity in the stock market—ensuring shares are available even when the market is trending strongly in one direction, says Stephen Bainbridge, a securities law professor at UCLA. "We know from corporate finance research that short-selling can be a very important contributor to market efficiency," says Bainbridge.

[Broken Arrow]

Banning all short selling though? That to me is drastic.

I fully agree, sweeps. Unfortunately, I don't think our government has the regulatory capacity right now to enforce against naked shorting. That's how it has gotten so out of control in the first place. But until the capacity is finally there, I believe a full-on ban is both necessary and justified.

On a related note, SKF is down by more than 19% right now.

[cipixul]

Drastic times call for drastic measures... seems to me that they tried to fix the problem several times and the shorters found a way to make money and unfix what was fixed, thus the drastic measures are needed