SEC Intends to Temporarily Ban Short-Selling (Story to Come)

[slipslidingaway]

Source: CNBC

"The Securities and Exchange Commission says it will issue a temporary ban on short-selling CNBC has learned.

SEC Chairman Christopher Cox briefed Congress late Thursday of the agency's plans to take the extraordinary step of interfering with the market's regular functioning. Short-selling is a trading strategy of selling borrowed stock in hopes it falls and can be repurchased at a lower price.

The details of the SEC's measures are unclear. The ban must be approved by the commissioners, and there's no word on which stocks are covered or for how long it will be in
effect..."





Read more: http://www.cnbc.com/id/26781646

[Demeter]

1. Then the World As We Know It Has Truly Ended

This can only be a good thing.

[Wapsie B]

2. Omg, what are the Bass brothers going to do?

:shrug:

[Aqaba]

3. Bush finally found out about these shorts!

[dixiegrrrrl]

7. I always wondered what short selling was

and why people were against it.

Thanks for clarifying .:rofl: :rofl: :rofl:

[JDPriestly]

20. Love the label. That is just incredibly good.

[dipsydoodle]

26. Thanks so much for finding that

I knew of its existance and had searched for it unsuccessfully a while back. :hi:

[lapfog_1]

4. Probably only naked shorts.

not short selling entirely.

Just a guess, I haven't read or heard anything about this.

[slipslidingaway]

5. MarketWatch

http://www.marketwatch.com/news/story/sec-temporarily-ban-short-selling-report/story.aspx?guid=%7BFF4C26A3-14EA-4585-B8AE-F993A5EBC9A1%7D&dist=msr_1

SEC to temporarily ban short-selling: report

By Robert Schroeder
Last update: 7:53 p.m. EDT Sept. 18, 2008

"WASHINGTON (MarketWatch) -- The U.S. Securities and Exchange Commission intends to temporarily ban short-selling, The Wall Street Journal reported Thursday night. It's unclear if the commission has approved the move, the Journal reported. SEC Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were briefing congressional leaders Thursday night. The U.S. move would follow a similar action by U.K. regulators on Thursday.'

[jmowreader]

6. I can see banning NAKED shorts...

but all shorts? That's gonna screw a LOT of Republicans.

[Zenlitened]

8. What about short- and ultra-short ETF's?

This is mind-boggling. Obviously, we don't have ANY details yet. Not even any confirmation. But still... I can't fathom this at all. Will have to wait and see.

:shrug:

[slipslidingaway]

9. I've been looking for more information without any luck...

of course the futures are up.

:shrug:

[BearSquirrel2]

10. I prefer traditional short selling exclusively ...

1) Don't buy a stock you think will go down.
2) Sell stocks that you believe will go down.

That is ALL that should be allowed. Short selling has no cover as being an "investment" it is plain gambling and a market manipulation device.

[Trillo]

12. Did you mean(?)

2) Sell stocks you already own that you believe will go down.

[Ghost Dog]

23. Seems to me, in any regular market, if I sell something I don't own

then I am committing a crime at least of fraud. Something else would be to agree to a contract to sell something by a certain date, in which case I would have to first acquire that thing first, and pay a market price. Selling something I've borrowed? Not even in used-car-dealer-land.

Kasino is right. Manipulation too. Stock markets are supposed to represent the true value of real businesses in the real economy.

[Trillo]

24. I was asking for clarification from the prior poster

regarding what he or she meant. What they wrote was unclear, at least to me.

Regarding what you wrote, one difference between selling short and buying versus buying and then selling (besides the obvious order of transactions) is that with the short, a cover must be purchased at some future date; With an owned stock, there is no obligation to ever sell it. Therefore, it seems this skews the market value upward, and may be viewed as a manipulative gimmick.

[AZ Criminal JD]

11. It can't happen too soon

Shorting is about the most destructive thing to our economy as it gets.

[bluesmail]

13. Let's see. Do I trust any government agency?

No.

[masmdu]

14. SEC to temporarily ban short-selling

Source: marketwatch

WASHINGTON (MarketWatch) -- The U.S. Securities and Exchange Commission intends to temporarily ban short-selling, The Wall Street Journal reported Thursday night. It's unclear if the commission has approved the move, the Journal reported. SEC Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were briefing congressional leaders Thursday night. The U.S. move would follow a similar action by U.K. regulators on Thursday.




Read more: http://www.marketwatch.com/news/story/sec-temporarily-ban-short-selling-report/story.aspx?guid=%7BFF4C26A3%2D14EA%2D4585%2DB8AE%2DF993A5EBC9A1%7D

---

This is BAD. If this is done it will precipitate a CRASH.

[Captain Hilts]

15. Whoa!

[maddezmom]

16. duplicate topic

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3498435

[TrogL]

17. What about stock of companies that sell shorts eg. Levi-Strauss

[truthisfreedom]

18. They already banned naked shorts.

[crazylikafox]

19. Well, let's watch that ole law of unintended consequences

True, illegal shortselling (i.e. "naked" shorting) has been giving the markets major heartburn lately. Of course, that's always been illegal just not enforced by the SEC. (Calling Cris Cox!!)

Legal shorting provides a certain amount of liquidity to the markets. When a stock is dropping, sometimes the only ones buying are the shortsellers, since they must "buy" in order to close their positions, and make their money.

Without anyone left to "cover", it may just be a one way street straight into the shitter.

We'll see.....

[JDPriestly]

21. They would have to ban it everywhere in the world.

Not likely that will happen. Short sellers will get around the ban.

[magellan]

22. We've all got to go Commando?

Kewl.

[MattSh]

25. Apparently it's Naked Short Selling

New short-selling rules could boost ETFs
Bearish funds may get lift as SEC cracks down on abusive short selling

By John Spence, MarketWatch
Last update: 5:00 p.m. EDT Sept. 18, 2008

BOSTON (MarketWatch) -- Securities and Exchange Commission rules that went into effect Thursday designed to stop "naked" short selling could prove to be a boon for a rapidly growing segment of the market for exchange-traded funds.

One of the controversial new rules requires short sellers to actually borrow company shares before selling them. In a naked short sale, the seller doesn't arrange to borrow the stock, which can intensify plunges in the share price.

Traders who short stocks sell the borrowed stock, making a bet the price will go down and it can be bought back in the future. The profit comes from the price difference.

http://www.marketwatch.com/news/story/new-sec-rules-could-boost/story.aspx?guid=%7B37459898%2DE37E%2D42C3%2DA199%2D4D47EBA02684%7D&siteid=yhoof

[slipslidingaway]

27. Investors baned from short-selling 799 financial companies....

http://biz.yahoo.com/cnnm/080919/091908_sec_short_selling.html

The U.S. Securities and Exchange Commission took what it called "emergency action" on Friday and temporarily banned investors from short-selling 799 financial companies.
The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately...

...The ruling comes after the SEC decided Wednesday to ban the practice of so-called "naked" short-selling, in which investors short the stock without actually borrowing it..."

[slipslidingaway]

28. Link to the list of 799 companies ...

http://www.sec.gov/rules/other/2008/34-58592.pdf

24 page pdf

[CK_John]

29. They will run the price up for all of Bushco' friends then they will sell and then remove the ban.