Short sellers say stock market crisis during ban proves rout not their fault

October 7, 2008 by · Leave a Comment
Filed under: Stock Market News 

This is true, we have had the most volatility in the market during the times when we have had a ban on the stocks that have lost the most value overall, which is the financial sector.  People don’t seem to understand that short sellers actually help keep the market honest and closer to the stocks true value.  I hope they let the ban expired so we can get through this process quickly and then we can set a bottom and start building from there.  Dow 7,000ish and S&P 7-800 is what I expect unless things get real bad and then it is anyone’s call.

News:

A temporary U.S. ban on short selling has failed to stop the relentless sell-off of financial stocks, proving that the trading strategy is not to blame for the crisis shaking Wall Street, two veteran short sellers said on Tuesday.

 

James Chanos and William Ackman also said it wasn’t clear that when the ban expires at 11:59 p.m. Eastern time on Wednesday, how many institutional investors would lend their shares out to short sellers.

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SEC extends short sale ban to give Congress more time

October 1, 2008 by · 1 Comment
Filed under: Stock Market News 

All I have to say is the biggest drop for the Dow Jones Average happened with a short sale ban in place. It looks like our government is set on saving and propping up these failed banks instead of letting the market re-balance itself. I hope the SEC does adopt the “uptick” rule again. I was doing some reading on it and it did seem reasonable enough of a regulation that looks to do what it is set out to do.

Press Release:

U.S. securities regulators on Wednesday extended an emergency ban on short selling in more than 950 financial stocks to give Congress time to finish legislation to rescue the financial system.

The Securities and Exchange Commission said the ban would expire three business days after a $700 billion federal bailout bill was enacted, but would not last beyond October 17.

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