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Surprise! "Emergency" Short-Sell Ban Extended
In the ongoing emergency, the SEC has chosen to extend the ban on short-selling a long list of financial (and non-financial once like GE, GM, and Zale Jewelery) stocks until--and this is an interesting twist, via the AP--"until the third business day after enactment of the $700 billion financial bailout plan now before Congress. It will end no later than Oct. 17." Seems kind of interesting to peg the first date for a directive to end to something that, after all, might not happen at all. Or is the fix in?
New reporting requirements for short-sales that are still legal, says AP, "will continue beyond Oct. 17 as an interim rule, the SEC said, promising to seek public comment on it. The SEC, however, made a modification, allowing managers to report their short positions to the agency confidentially, rather than requiring public disclosure."
Why the short-sell ban was a bad idea in the first place, and
what it all means, discussed in my article from last
week.
ktc2|10.2.08 @ 12:06PM|#
Of course the fix is in! Did you EVER really think this monstrosity would not pass? It was just meeting the cumulitive prices of the necessary legislators. Once they are all bribed off it will pass. Surely you knew that?
Gilbert Martin|10.2.08 @ 12:10PM|#
"(and non-financial once like GE, GM, and AmEx)"
There are significant parts of GE and GM that are in the financing
business - although GM has sold off a significant chunk of GMAC to
a private equity fund.
Not that I agree with the short selling ban though.
The only thing the government should do regarding short selling is
restore the uptick rule and ban naked short selling.
|10.2.08 @ 12:18PM|#
Well, ktc2 beat me to it.
"It's gettin' so a businessman can't expect no return from a fixed
fight. Now, if you can't trust a fix, what can you trust? For a
good return, you gotta go bettin' on chance - and then you're back
with anarchy, right back in the jungle."
|10.2.08 @ 12:29PM|#
This is the problem with dismissing controls on pork as worrying
about nickels and dimes. Pork is always used to buy votes on
legislation. If stupid and/or expensive legislation wouldn't pass
but for pork, well, what is the true cost of pork?
Mmmmm, pork.
|10.2.08 @ 12:48PM|#
When are they just gonna decree that all stocks return to the price they were at in December 1999? Sure would help my positions in Sun, Oracle, Cisco, and others too embarassing to mention. And Pets.com is a valuable company, I tells ya!!! Socks, that are puppets, that look like animals, selling pet food...it can't fail!!!
|10.2.08 @ 1:02PM|#
Maybe if this ban had been enacted sooner,we wouldn't be in this mess. Leave it to the free market anti-government fundies to invert the truth and say that what's bad is good.
Bingo|10.2.08 @ 1:16PM|#
We should just legislate that you can't sell stock. Then the market would never go down!
Neu Mejican|10.2.08 @ 1:18PM|#
Charlie Rose had a good discussion of this whole mess. Worst
case scenarios are 5 years of recession, perhaps deep recession
with housing prices dropping 60% or so. This puts 20 million people
in mortgages that are larger than the value of their homes.
Estimates are that the correct intervention would reduce that 5
years to 2 or 3 years. But no one seemed to think that there was an
intervention that would prevent the decline in home prices.
My question was...if housing prices and over-valued homes are the
problem, then how will any intervention that doesn't effect that
have an effect on the length of the market correction?
|10.2.08 @ 1:19PM|#
Why not just nationalize all financial services, medicine, insurance, and heavy industry?
|10.2.08 @ 1:25PM|#
"The only thing the government should do regarding short selling
is restore the uptick rule and ban naked short selling."
JUST PUT YOU DAMN PANTS ON!!!
YOU DON'T NEED THE GOVERNMENT TO DO THAT DO YOU?
|10.2.08 @ 1:28PM|#
Neu,
Agreed. How how does bank liquidity actually help people in upside
down loans? Are we supposed to believe that it's merely a problem
of tight credit that keeps them from refinancing a house that has
lost 40% of it value?
As horrible as it sounds, forcing a conversion of ARMs to 40 year
fixed rate loans would keep people afloat better than bailing out
the people dumb enough to buy those shitty mortgage as an
investment in the first place. What this would do, however...
|10.2.08 @ 1:34PM|#
But what about my condo?
I'll buy it for half what you paid. What, what am I saying? Your
place is a shithole. You live like Charlie.
Naga Sadow|10.2.08 @ 1:36PM|#
Epi,
Interesting as I am the Charlie of my group of friends. Haven't
bought it yet. Waiting for December to buy one in Navarre,
FL.
"Wildcard, bitches! Yee-Haw!"
Naga Sadow|10.2.08 @ 1:38PM|#
SugarFree,
Not a dune hater. Just a really long book that I have a lot of
trouble recognizing quotes from. And I need those ARM's to keep
stacking up till December.
"No bailout for you! Come back. One year."
|10.2.08 @ 1:43PM|#
Not a dune hater.
Isn't that just what you'd expect a dune hater to say?
Also, black-bottom saltwater pool house update: Open house this
weekend. I'm thinking red dye in the toilet and then screaming that
the house told me to "GET OUT" in a hoarse whisper. Convincing
people it's haunted has got to drive the price down. I need those
flippers to break!
Naga Sadow|10.2.08 @ 1:45PM|#
SugarFree,
Word. A crazy ass spirit in the role of "Grudge" would be awesome.
Until the spirit ripped your lower jaw off.
Naga Sadow|10.2.08 @ 1:48PM|#
Epi,
If we were friends, I think you would be the wildcard. I would be
the looks. Sorry but when you claim to be the looks I picture you
in a with a hollowed look to your face while wearing wife beater
cooking meth in your tub.
|10.2.08 @ 1:49PM|#
Estimates are that the correct intervention would reduce
that 5 years to 2 or 3 years.
How on earth would they actually know that? They being the
economists who came up with that figure, don't have any idea what
things will be like. If they did why weren't they asking for this
"rescue" plan 2-3 years ago?
I love economists. I actual find most of what they have to say is
fascinating. But while they are great at explaining what happened
they are generally terrible at predicting what will happen.
|10.2.08 @ 1:51PM|#
black-bottom saltwater pool house
Wow, I wasn't paying attention last time you mentioned this. That
is holy shit fucking cool. How much do they want?
|10.2.08 @ 1:54PM|#
If we were friends, I think you would be the
wildcard
No way, dude. I'm the looks, NutraSweet is the brains, you are
definitely the wildcard, LMNOP can be the muscle, and Dagny can be
the useless chick.
Naga Sadow|10.2.08 @ 1:55PM|#
I just used my magic eight ball(not that 8ball!) and it claims YOU are the wildcard. I refuse to be the one who gets drunk all the time and wets himself.
|10.2.08 @ 2:02PM|#
It's in the neighborhood, but on a much quieter street traffic
wise. They bought it in 2005 for 420K, did nothing to it and put it
on the market right before the local bubble popped for 699K.
They've come down to 580K, but we know it hasn't bottomed out yet
and we're circling like vultures.
Since we don't need a house (and are only 7 years away from paying
ours off) we can afford to wait. If it doesn't pan out, ho hum. Zen
real estate. No attachments or desires.
|10.2.08 @ 2:05PM|#
No way, dude. I'm the looks, NutraSweet is the brains, you
are definitely the wildcard, LMNOP can be the muscle, and Dagny can
be the useless chick.
Dagny's not useless, she's the exotic foreigner to appeal the
overseas market.
Codename: Snow Angel
|10.2.08 @ 2:08PM|#
we're circling like vultures
Gimme the address so I can scoop you. Saltwater pool!!! How
big?
|10.2.08 @ 2:14PM|#
Just a small one. Looks mostly like a over-large hot tub. It has
a very small backyard. Enough room for my grill and disc golf
basket is fine by me.
Hey... anyone who knows something about shady real estate deals...
what does it mean when a house has its deed transferred from a
person to a bank and then is sold the same day for about half the
original asking price to another person? It had been on the market
for over a year. (That's all we could get from the
newspaper...)
Kolohe|10.2.08 @ 2:18PM|#
and non-financial once like GE, GM, and Zale
Jewelery
To be fair, GE has a huge financial arm. (which is sucking a mighty
wind). I actually surprised it wasn't part of the orginal ban.
Kolohe|10.2.08 @ 2:21PM|#
Socks, that are puppets, that look like animals, selling pet
food...it can't fail!!!
What's funny is that I think that same puppet has been hocking a
hard money loan company.
|10.2.08 @ 2:24PM|#
Kolohe,
And that's just his day job. You know he still give handjobs and
cries. The hand is just a pimp, man... just a pimp. Little googly
eyes all rollin' around...
|10.2.08 @ 2:29PM|#
what does it mean when a house has its deed transferred from
a person to a bank and then is sold the same day for about half the
original asking price to another person?
Sounds like a "pre-packaged" bankruptcy deal.
|10.2.08 @ 2:31PM|#
Anything to save my GE shares!
Shush, now; I'm waiting for it to hit seventeen, so I can buy
another thousand shares, or so. That meddling bastard Buffett isn't
helping.
|10.2.08 @ 2:35PM|#
P Brooks,
I thought that, but wasn't sure. It makes sense. They bought a 260K
house on a 7600 ft lot, tore it down and built a two-and-a-half
story monster that went on the market for 999K. It has set empty
for almost two years. It's three houses down from mine. Thanks for
property tax ass-rape, fuckwads.
Neu Mejican|10.2.08 @ 2:55PM|#
Pain | October 2, 2008, 1:49pm | #
Estimates are that the correct intervention would reduce that 5
years to 2 or 3 years.
How on earth would they actually know that? They being the
economists who came up with that figure, don't have any idea what
things will be like. If they did why weren't they asking for this
"rescue" plan 2-3 years ago?
I love economists. I actual find most of what they have to say is
fascinating. But while they are great at explaining what happened
they are generally terrible at predicting what will
happen.
These were, actually, not economists but business men and business
journalists.
I agree with you on the general strengths and weaknesses of
economics as a scientific(?) endeavor.
|10.2.08 @ 3:20PM|#
what does it mean when a house has its deed transferred from
a person to a bank and then is sold the same day for about half the
original asking price to another person?
Sounds like a fairly vanilla foreclosure. Typically, the bank
doesn't want to hold title to a property, so they will shop the
property around before actually foreclosing. Then, when they've
found a buyer, they take title solely for the purpose of
transferring it to the buyer. I vaguely recall there are some
legal/accounting advantages to doing it this way.
|10.2.08 @ 3:48PM|#
I was a broker for a short time in 88-90, I think the only folks who should be allowed to "short" a stock are those folks who sell "short against the box". What that means is that an investor can only sell borrowed stock, if he owns an amount greater than, or equal to, a long position in that same stock. Short selling is a valid investment strategy for someone who owns a stock position, and wants to protect himself from a downturn in the market by selling a "borrowed equivalent amount of that stock. It is my opinion that any other use of short selling is actually devesting, not investing, and has no place in our markets. Most short sellers that I am aware of are hedge funds and speculators, both of which are not in any way helpful to a stock market.
|10.2.08 @ 3:52PM|#
"short against the box"
Aren't those the guys who never get called back for another
one-night stand?
Invisible Finger|10.2.08 @ 4:01PM|#
GE, GM, and Zale Jewelery
These are financials. GE for GE Capital, GM for GMAC (they still
own a good chunk), and jewelers are usually precious metals dealers
of a sort.
|10.2.08 @ 11:12PM|#
Zales' basic business model is that of a finance company; the whole jewelry-store thing is just a) the hook to get you locked into their financing program and b) an occasional sweetener to the company's overall bottom line (though it's more likely to function as a loss-leader).
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