Ok so SEC banned short selling. Shouldn’t the stock still go down? Considering that noone wants to buy it at X$… so it drops until it reaches Y$???
CFABLACKBELT Wrote: ------------------------------------------------------- > Ok so SEC banned short selling. > > Shouldn’t the stock still go down? Considering > that noone wants to buy it at X$… so it drops > until it reaches Y$??? Depends on if its truly overvalued or not.
Short Squeeze
… if you know there won’t be too much selling (due to the ban), wouldn’t you feel more comfortable buying? That’s the psychology of this.
Dreary Wrote: ------------------------------------------------------- > … if you know there won’t be too much selling > (due to the ban), wouldn’t you feel more > comfortable buying? That’s the psychology of > this. ? is how long will that last?? This is not a “free mrkt” px so what will happen when rules expire? Wayyyy to scary for me. At least before if it was going to tank there were indicators. Now theres an opaque blanket thrown over everything.
CFABLACKBELT Wrote: ------------------------------------------------------- > Ok so SEC banned short selling. > > Shouldn’t the stock still go down? Considering > that noone wants to buy it at X$… so it drops > until it reaches Y$?? what happens when the existing shorts out there are covered? the price will go up. once they lift this “temp” ban… the volitility is going to be even more ridiculous than it was before. not a very well thought-out policy IMO.
“The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets,” said SEC Chairman Christopher Cox in a statement. “The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets.” Umm, isn’t the ban by the SEC market manipulation? Hypocrites.
>Umm, isn’t the ban by the SEC market manipulation? Hypocrites. Agreed. I can only sigh and shake my head. If I remember correctly, Hong Kong did similar thing late 90’s or early 00’s. Does anybody remember/know aftermath of that?
zigy Wrote: ------------------------------------------------------- > >Umm, isn’t the ban by the SEC market > manipulation? Hypocrites. > > Agreed. I can only sigh and shake my head. > > If I remember correctly, Hong Kong did similar > thing late 90’s or early 00’s. Does anybody > remember/know aftermath of that? I disagree. Who cares if its market manipulation. The fact is people are using the troubles in the IBs to short them into the ground. It happened with Bear, it happened with Lehman, and it was being attempted with Morgan and Goldman. If we have to break the rules to save these firms SO BE IT!!! Jeez you laissez faire types really will cut off your nose to spite your face.
Tell us thepinkman, do you have positions in those stocks? Or do you work for one of them?
zigy Wrote: ------------------------------------------------------- > Tell us thepinkman, do you have positions in those > stocks? Or do you work for one of them? The Pinkman works for NOBODY!
How does having your stock shorted make a company insolvent? Undervalued stock doesn’t affect a company’s ability to pay its debts. If a company continues earning cash and giving it to shareholders in the form of dividends or growth, they’re going to keep doing business. If the amount of money owed is larger than the amount of money they can come up with (for whatever reason) they will cease to do business eventually. This seems fairly independent of stock prices.
TMurf Wrote: ------------------------------------------------------- > “The commission is committed to using every weapon > in its arsenal to combat market manipulation that > threatens investors and capital markets,” said SEC > Chairman Christopher Cox in a statement. “The > emergency order temporarily banning short selling > of financial stocks will restore equilibrium to > markets.” > “restore equilibrium to markets”??? Please don’t kid us SEC!! Shorting is one of the way to bring equilibrium to the market.
I think banning short selling is a way to manipulate the market and blame sombody. Short sellers dont own the market. Nobody does. The financial mess didnt come form shortselling, but from bad balance sheets. The gov.t rule is just another invention to poit fingers to others and keep people happy.
thepinkman Wrote: ------------------------------------------------------- > I disagree. Who cares if its market manipulation. > The fact is people are using the troubles in the > IBs to short them into the ground. It happened > with Bear, it happened with Lehman, and it was > being attempted with Morgan and Goldman. If we > have to break the rules to save these firms SO BE > IT!!! > > Jeez you laissez faire types really will cut off > your nose to spite your face. What did you want them to do, wait until there is positive news to short them? That’s what short sellers do, they bring a price back into line with the value of the company. If these companies were truly undervalued because of shorts then money on the sidelines would have come in to support them. I think it is more likely, that the shorts brought the prices down, but also forced some real transparency into the crap these guys had on their books.
I just heard Paulson and Bernanke are going to ban “bad news” from the press and other negative “externalities”. This is such a crock of shit. “Capitalism” indeed.