WaMu down 18%

And everyone trade involves a bonafide long holder selling the stock. Guess we’ll need to ban that soon enough. Also I noticed today OZM and BX (and now GLG as well) made it on the short ban list, and yet they were all up on Friday. Not too often a rule harming your basic business model causes your stock to go up.

Would anyone like to defend the short selling ban now?

I had a very heated argument with a friend over the weekend (who just happens to be an FA at WaMu) regarding the short selling ban. Just wait until the rule expires (probably after the election, there is no doubt they will renew it past then). It will be chaos for these garbage companies.

brianr Wrote: ------------------------------------------------------- > I had a very heated argument with a friend over > the weekend (who just happens to be an FA at WaMu) > regarding the short selling ban. > > Just wait until the rule expires (probably after > the election, there is no doubt they will renew it > past then). It will be chaos for these garbage > companies. I read it was only a 10-day ban on short selling. I could be wrong, though.

10 with an option for 30, and extendable at will after that.

dcallocchia0322 Wrote: ------------------------------------------------------- > I read it was only a 10-day ban on short selling. > I could be wrong, though. Correct but it will be extended.

NakedPuts Wrote: ------------------------------------------------------- > Would anyone like to defend the short selling ban > now? Nobody is saying that short-selling is necessarily a bad thing. In normal market conditions, short-selling adds liquidity to markets and allows for the greatest possible participation in equity valuation. It is important to remember that these are extraordinary times, and sometimes extraordinary times require measures to be taken that would not usually be considered to be advisable. In this case, it is clear that short sellers have contributed deeply to the current debacle in capital markets, especially in the financial sector. Here’s a decent analogy. Suppose that I own a movie theater and it is packed with people all enjoying the show. Suppose a fire breaks out in the parking lot and there are a few cars on fire. I can call 911, get the fire put out, and if someone’s car is going to be damaged, they might as well enjoy the movie and find out later that their car was torched. A short-seller is like someone running into the theater and screaming about cars being on fire. It doesn’t do any good and ruins the picture, even for people who walked to the theater. That just isn’t fair. Suppose that you live next door to some restaurant selling lousy food for a high price. How do you deal with that? Do you short-sell their salad bar? No, you just stay away and let customers decide. If they like it, they buy it and if they don’t like it they don’t buy it. Why should financial stocks be any different? America was built on long-term equity investment. It’s about belief, faith, and loyalty. These are American values that have surely been corrupted recently, but remain the values that made America the finest nation in the world. A short seller has no loyalty, just an abiding selfishness. A short seller has no belief, except that somebody else is doing a poor job. A short seller has no faith, except in filthy mammon. I’m glad that the SEC cracked down on this and I hope that we return to more normal times so we can relax these ru;es and let everyone live by their own moral code.

You have to admit that if the short did not enter the movie theater the whole parking lot could burn before someone calls the fire department. America was built on long-term equity investments, but if the price of an equity is at odds with the fundamentals underlying these equity investments it is only fair that the price is depressed until clarity enters the market place.

C’mon - that’s crazy. This “contagion” theory of car fires is just fear-mongering at its worst. If a few cars are on fire, there is no reason at all to think it might spread to other cars.

JoeyDVivre Wrote: ------------------------------------------------------- > NakedPuts Wrote: > -------------------------------------------------- > ----- > > Would anyone like to defend the short selling > ban > > now? > > Nobody is saying that short-selling is necessarily > a bad thing. In normal market conditions, > short-selling adds liquidity to markets and allows > for the greatest possible participation in equity > valuation. And keeps bad management teams honest, roots our fraud, allows a variety of derivative transactions to be possible… > It is important to remember that these are > extraordinary times, and sometimes extraordinary > times require measures to be taken that would not > usually be considered to be advisable. In this > case, it is clear that short sellers have > contributed deeply to the current debacle in > capital markets, especially in the financial > sector. A Patriot Act for short selling? Didn’t we learn out lesson the first time? > Here’s a decent analogy. Suppose that I own a > movie theater and it is packed with people all > enjoying the show. Suppose a fire breaks out in > the parking lot and there are a few cars on fire. > I can call 911, get the fire put out, and if > someone’s car is going to be damaged, they might > as well enjoy the movie and find out later that > their car was torched. A short-seller is like > someone running into the theater and screaming > about cars being on fire. It doesn’t do any good > and ruins the picture, even for people who walked > to the theater. That just isn’t fair. This analogy is just a little too tortured to be applicable. Just so we’re clear: Who’s the guy losing billions of dollars through bad investments and risk management practices in this analogy? > Suppose that you live next door to some restaurant > selling lousy food for a high price. How do you > deal with that? Do you short-sell their salad > bar? No, you just stay away and let customers > decide. If they like it, they buy it and if they > don’t like it they don’t buy it. Why should > financial stocks be any different? Actually, I once got a guy to loan me his salad bar, funny story… > America was built on long-term equity investment. > It’s about belief, faith, and loyalty. These are > American values that have surely been corrupted > recently, but remain the values that made America > the finest nation in the world. Spare me your “short sellers are Un-American” nonsense. A short seller > has no loyalty, just an abiding selfishness. A > short seller has no belief, except that somebody > else is doing a poor job. A short seller has no > faith, except in filthy mammon. This is just pure crockery. “An abiding selfishness”? What about Chanos exposing Enron? Do Bill Ackman and David Einhorn really strike you as bad people? Both have pledged to donate personal profits from their notable short sales to charity. Perhaps these momentum driven quant guys who short indiscriminately and provide no real value to the market should be weeded out, but fundamental research driven shorts are some of the best investors out there. > I’m glad that the SEC cracked down on this and I > hope that we return to more normal times so we can > relax these ru;es and let everyone live by their > own moral code. There are a few things pretty much everyone agrees up: Naked shorting is and has always been banned, and shouldn’t be allowed. Spreading rumors, long or short, certainly shouldn’t be allowed. Most advocates of short selling complained the uptick rule had no effect and should be eliminated. If so, let’s bring it back. However, in light of today’s tremendous declines across the financial sector, it can be argued with ease that the gains of the last week were essentially a government perpetrated short squeeze, perhaps the biggest market manipulation of all time. If these companies are so stable, why, pray tell, do they require a 3/4 trillion bailout? Here’s a bit more from another “noted short seller”, or as you would have it, “filthy mammon”. http://jeffmatthewsisnotmakingthisup.blogspot.com/2008/09/naked-nothing.html

lol…

the ban is till October 2 and can be extended up to 30 days. hmmmmm…Look at the timeline on the calendar and it will be very clear. :slight_smile: