What is significant about January 16th 2009?
It is the day in which the ban on short-selling is lifted. It is a Friday.
Inauguration Day is four days later, on a Tuesday.
Why did the SEC choose that specific day to lift the ban on shorting 799 companies? Why not the week before or the week after? Was it strategically positioned to enable either political party to seamlessly walk into the Oval Office?
While Paulson, Bernanke and Chris Cox are all life-long Republicans, their subsidies, guarantees, and bailouts will only help in the short-run. And if the lessons of Pakistan serve as an example, even the incumbent GOP won’t be able to turn water into wine come mid-January.
See also: Shorting is unpatriotic and an act of terrorism
{ 11 comments }
Great picture to go with the blog post!
Correct me if I am wrong, but aren’t there two parties to every short sale? Someone is betting the stock will go down and someone is betting it won’t?
The question is not whether banning short selling will do any good, but why should it be banned at all? It is a voluntary contract between private parties.
I guess the powers that be think that if you can’t short a stock that you won’t let the price drop. If they are right, then they ought to ban the law of gravity so we can all fly everywhere and no one will fall down and get hurt.
David, great point, in the end all this will really do is cause more erratic behavior because short traders aren’t there to provide any sort of guidance or prescience.
And one more addition: Monday, January 19th is Martin Luther King Jr. day, a national holiday. Thus, the ban on shorts is nothing more than a 4 month “vacation” directly to day of inauguration.
Coincidence?
I don’t really see the big deal that they’re banning shorts! It’s fall anyway, and we’re not going to need them till after Jan 16th anyway!
That being said, this is a terrible, terrible, terrible idea that will completely distort the market value of the financials. It’s a purely psychological trick.
I don’t really see the big deal that they’re banning shorts! It’s fall anyway, and we’re not going to need them till after Jan 16th anyway!
That being said, this is a terrible, terrible, terrible idea that will completely distort the market value of the financials. It’s a purely psychological trick.
Do we really even need to discuss the folly of government policy anymore? Ugh. This is pathetic. Both political parties have conspired to blame anyone (greedy CEOs, unethical bankers, nefarious traders in shorts…) but the state. Meanwhile, what little real savings remain in our economy are being squandered by the moment. We know the Austrian business cycle predicted this mess, but what good is being right when no one will listen? I’d like to think the inherent errors in our present way of “doing business” will be exposed by economic calmity but history seems to indicate that, at best, our present system will just be replaced with one equally-flawed. What’s an Austrian to do?
I don’t know who picked the illustration for this article but it’s just so disgustingly …perfect!
Still I dont believe it. Our correspondant at a major european bank, chief of trade, says to us “yes it’s right, we the bankers have been overdoing it, we took too much risk. It’s our fault”. How much are they being paid to say that…?
hooray for the village people. shorts rule!
I think it actually comes from Reno: 911.
Just think of all the extra option put premiums they will generate for the banks and brokerages though
Jim Dangle’s dingle dangles to the left apparently
Comments on this entry are closed.