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  • September 19, 2008 09:20 AM EDT by Elizabeth MacDonald

    What the SEC's Ban on Shorting Really Means

    The Securities and Exchange Commission took the dramatic step of banning for ten days short-selling on 799 financial stocks.

    And of course with any hastily planned regulatory intervention, potholes have opened. And ironically, the SEC's new ban giving shelter to the 799 financial companies is also protecting famous short-seller David Einhorn from the shorts.

    The SEC's ban could be extended for up to 30 days, and comes after Wall Street executives say short sellers have caused catastrophic declines in stock prices that have led to the downfall of Bear Stearns, Lehman Bros, and American International Group.

    The SEC's moves follows close on the heels of Great Britain's decision to ban short selling in 29 stocks until the end of the year. U.K. investors have accused short sellers of causing shares in HBOS Plc to plunge before it entered into a $18.9 bn takeover by Lloyds TSB Group Plc.

    Short-sellers profit from falling share prices. They borrow shares from brokers and then sell them. When the price declines, they turn back the shares at the lower price and pocket the difference. In a naked short sale, the short seller does not borrow the shares and physically have them in hand.  

    Some $3 tn was wiped from stocks globally this week as financial shares plunged, causing the SEC to go on the offensive.

    The fear is that shorts are causing massive price plunges, triggering credit downgrades, slamming capital and forcing companies to sell assets at garage-sale prices. (See "Get Shorty," "Did the SEC's Plan to Get Shorty Work?," and "Still Trying to Get Shorty.")

    The SEC acted after it met with heated entreaties to intervene from Wall Street executives including Goldman Sachs Group (GS) chief executive Lloyd Blankfein and John Mack, chief executive of Morgan Stanley (MS).

    A stock price plunge in recent days could still force Morgan into the arms of a commercial bank like Wachovia (WB). Short interest in Morgan Stanley is triple the levels of a year ago. Both Mack and Blankfein have discussed short sellers five or six times in the last week, Mack told employees.

    In taking the emergency action, the SEC says it wants to "prohibit short selling in financial companies" to protect the integrity of the securities market and boost investor confidence.

    Who is on the List?

    Wall Street titans Morgan Stanley, Merrill Lynch (MER), Citigroup (C), JPMorgan Chase (JPM) are on the SEC's new list, as are Washington Mutual (WM) and Wachovia (WB). The SEC had met with criticism in mid summer when it initially banned a form of short selling in 19 financial stocks and left off the list Wamu and Wachovia. 

    Damaged bond insurers Ambac Financial (ABK) and MBIA (MBI) also made the list, which couldn't have come too soon as Moody's Investors Service once again just placed the ratings of Ambac and MBIA on review for possible downgrade.

    Warren Buffett's Berkshire Hathaway (BRK) is on the list, Blackstone Group (BX) is on it, as are beaten-up companies E*Trade Financial (EFTC), Dollar Financial (DLLR) and Conseco (CNO).

    SEC Protects Famous Short Einhorn From the Shorts

    Even Greenlight Capital (GLRE), the reinsurance company that is a wing of famous short David Einhorn's hedge fund Greenlight Capital, is on the list. Einhorn earlier this year made his case for shorting Lehman Bros., arguing the now-collapsed firm was engaging in questionable accounting ("What to Watch Out for at Lehman Brothers," "The Fire-Engine Red Flags at Lehman Brothers," and "Questions About Lehman Brothers Continue to Mount").

    Not on the list: CIT Group (CIT), now asking the SEC to be put on the list.

    Market analyst Paul Kedrosky, who writes for the website SeekingAlpha.com, notes ironically that Lehman is on the list, though it is in bankruptcy status, that the SEC has Silver State Bancorp on the list, though it's a failed bank already seized by the FDIC, and that the SEC is blocking shorting of NAHC. That ticker doesn't exist, unless it stands for the Nigerian Aviation Holding Company, Kedrosky says wryly.

    The Crackdown

    The Securities and Exchange Commission is also clamping down on "naked" short-selling, where the underlying stock in a short sale is neither borrowed nor delivered by the short-seller. The SEC is not outlawing the practice.

    Instead, short sellers and broker dealers must now actually deliver securities borrowed for short sales--or risk being accused of securities fraud and of being permanently barred from engaging in naked short selling.

    The SEC's moves comes fast on the news this week that the SEC has subpoenaed 50 hedge funds to find out if they were engaging in rumor mongering in order to drive down shares in 19 financial companies they had shorted in naked short sales to book a profit.

    Hedge Funds Must Confess

    The SEC now wants to force hedge funds to make disclosures of daily short positions, a move that would let regulators assess the impact of short-selling at funds with $100 mn or more.

    Currently shorts file forms with the SEC that disclose their long positions and options on a quarterly basis. In the past, the hedge fund industry has gone so far as to sue the SEC to stop any regulation of the industry, litigation which could arise again.

    The disclosures may help, though famous short James Chanos, who blew the whistle on Enron, says it would be the equivalent of forcing Coca-Cola to reveal its secret formula.

    Check out the most recent filing from Greenlight Capital, run by David Einhorn, who raised serious questions about accounting problems at Lehman. Einhorn gave speeches and went on t.v. with his criticism, but his latest filing only shows about 581,000 in put options on Lehman, with little else detail.

    Other Moves to Get Shorty are Underway.

    After writing to 60 other pension funds asking them to follow its lead, the largest U.S. public pension fund Calpers, the California Public Employees' Retirement System, said it is no longer lending out shares of financials like Goldman, Morgan Stanley or Wachovia to short. New York State and Texas pension funds are considering similar moves.

    And New York Attorney General Andrew Cuomo said he was opening investigations into short sellers who he believes are engaging in false rumor mongering to manipulate stocks down in order to take profits. Cuomo went so far to say he'll use the state securities-fraud law to go after short sellers, the Martin Act, which permits criminal and civil actions.

    Marking to Taxpayers

    The SEC's emergency ban on shorting coincides with the US government's announcement that it will set up a Resolution Trust-type entity, harking back to the S&L crisis, that would act as an assisted living facility for financial companies across the country, a mega-dumpster for their toxic subprime waste.

    Now Wall Street and other banks would not have to pricetag these toxic assets and record losses on their own, an accounting endeavor called "marking to market," which lately is the equivalent of sticking a finger in the wind.

    Instead the government is "marking to taxpayers" these assets.

    A so-called mega bad bank structure for thousands of banks around the country, a structure that Lehman desperately clung to in its final hours. An entity far different from the RTC structure of the S&L crisis, where the government got assets dumped on it from insured thrifts that had bellyflopped, then liquidated them.

    The new entity would buy frozen solid assets from banks and then sell them, likely at auction, into the market.

    The move might entail an $800 bn fund to purchase these so-called failed assets and a separate $50 bn pool at the Federal Deposit Insurance Corp. to insure investors in money-market funds, as a mini-run on these funds is now underway.

    Takes the Pressure off the Federal Reserve

    Setting up this government warehouse would take the pressure off of the Fed's discount window, now strained with record bank borrowing.  The Treasury in the past two days announced $200 bn in special bill sales to help the Fed expand its balance sheet.

    Already banks around the world have taken more than $510 bn in writedowns and losses from the housing and credit crisis. Wall Street created about $1.2 tn of subprime mortgage-backed securities, some $200 bn to $300 bn are now thought to be sitting at FDIC-insured banks and thrifts.

    It's estimated that Citigroup, JPMorgan Chase (JPM), Bank of America Corp. (BAC), Goldman Sachs Group Inc., Merrill Lynch & Co. (MER) and Lehman Brothers had more than $500 bn of the most illiquid, toxic stuff, the so-called Level 3 assets as of June 30, according to research firm CreditSights Inc.

    Markets Soar on the News

    The governments' moves have sent the markets soaring. Shorts now are racing to cover their positions, helping to send stocks higher as well.

    Volatility is hitting record levels. The closely watched CBOE Volatility Index, the VIX or the Fear Index, has easily blown through the 30 ceiling in recent days,  and briefly rose higher than 42.

    The Potholes in the SEC's Moves

    A heated debate is now underway over the SEC's ban, namely, that the companies under attack were rightfully shorted as they are insolvent, reflected in their stock prices.

    An insolvency some say may have been inadvertently created by the SEC itself, as the agency did not do enough to force Wall Street firms who shoved debt into off-balance sheet vehicles that many thought went the way of Enron. The agency also is being criticized for not doing enough to get Wall Street firms to bolster their capital cushions, and instead let five firms weaken their capital positions (see blog "Still Trying to Get Shorty").

    The question too is when the SEC is going to pursue executives of defunct companies, or companies now on life support, when they've walked away with lucrative compensation packages they won after their companies essentially reported artificially higher profits from their management decisions.

    Another irony, too, is that shorting selling has fueled the profit engines at the very Wall Street firms now complaining about the practice, including the big, bulge-bracket broker dealers like Morgan, Goldman and Merrill. The SEC's move too would ban the investing strategies used by hundreds of mutual funds, hedge funds, pension funds, endowments and governments.

    Also, short sellers can still short synthetically, via puts, exchange traded funds that carry many of the names on the SEC's list of 799 companies via the option market. And market analyst David Merkel warns that the SEC's move could hurt in the interim merger arbitrage funds, statistical arbitrage funds and other quant funds. He also warns that the implied volatility for put options would go up.

    It's unclear now whether the collapse of Bear Sterns, Lehman Bros. and AIG, and the near demise of Merrill Lynch, Fannie Mae and Freddie Mac were caused largely by short sellers. Gut-clenching price declines on a daily basis of 40% in companies thought to be healthy should give you pause.   

    Crisis of Confidence

    Our equity and credit markets are suffering from a crisis of confidence that touches all securities and all investors across the country.

    It is a crisis of confidence exacerbated by the news that Lehman Brothers wanted to suddenly double the dollar amount of its Kryptonite assets shoved into a bad bank structure in a matter of days, from $40 bn to $80 bn.

    It is a crisis of confidence aggravated by the news that American International Group can now borrow up to $85 bn in a credit facility from the Fed, more than double in a matter of days what it said it needed, $40 bn.

    It is a crisis of confidence worsened by the news that Congress had to hire Morgan Stanley to go find out what landfill was sitting on the books of Fannie Mae and Freddie Mac.

    It is a crisis of confidence over solvency.

    And over the fact that our nation's financial chieftains really don't know what they are doing.

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Franz Hassenflu

I fear that our country is going down the drain, and the people in Washington and Wall Street have there hand on the handle. Where I ask you, is the common sense that made our country great. In my opinion, we need to put the CEO's, and ALL the people in Washington (Elected Officials) in jail not "Club FED" but the real deal, where you cannot bend over in the shower! Right now what will happen to the guy that runs a company into the ground and then collects millions in bonus's. Here is the answer, "Not a thing"! If you rob a 7/11 you get 10 to 20 years, you rob millions and you get a bonus. When you boil all this down it comes to one thing GREED, it really is that simple, the elected officials, the people on Wall Street, the heads of Large Corporations, it is all about what is this going to do for me. We need to look at history to find the answers, Thomas Jefferson said it best, It should be a hardship to sever ones country, not a career. We need to demand term limits on all the Elected Officials, all the way from the city's to Washington, the President needs a line item veto, an Every single person that goes to Washington should remember one simple idea, "Put your Country First", if not go the hell home, or we the people will send you there. I am a Independent voter, but the only team that I see that really will put, Country First, is the McCain/Palin ticket. An at this time, I am not so sure about that, Absolute Power, Corrupts Absolutely. Now I feel better.

September 20, 2008 at 1:58 pm

Carbonite Eagle

If we let Obamawicz get elected, socialism will have both of it's dotted. The CEO's and their immediate staff should be sued and given jobs milking cows in the Artic snow...just we as Americans have been milked. oh....Barney Frank and the other 3 clowns....keep looking over your shoulder. The truth is coming...oh wait a minute Barney does that already.

September 20, 2008 at 12:51 pm

Tired of it all

The Justice Dept. needs to apply the RICOH statutes and go after these racketeering execs - seize their personal assets. Just imagine - the Hamptons would be gov't property overnight! The Treasury Dept. can sell it all at a fire sale - who would buy? Arab oil sheiks, Russian oil mobsters and Chinese "businessmen." We are pwned.

September 20, 2008 at 12:17 pm

Robert C

It is now completely obvious that Paulson and his cronies have only the banking community's interest in mind when they make these outlandish moves. We as the taxpayer, are now going to get left the bagholder of all of the "Level 3" stuff the banks have been hiding off their balance sheets. They don't want them, with them the banks look bad, their stock values go into the toiet...There really is no end in site for how far these guys are willing to go and how much debt they are willing to dump on us... Since there seems no protection for "we the people" from lobbiest paid congress and senators...perhaps the only thing left is a revolution...Perhaps it's time for us to hit the FED below the belt...I say if they pass this BS legislation and transfer the debt to us the taxpayer...we just say SCREW YOU...and we all stop paying our taxes completely...surely this will be an unglorious end to their screwing us...but hey...it's non violent, and 100% effective! Somehow we keep forgetting that the whole thing gets empowered by us...we ultimately decide to pay the bill or not...really pretty simple when you think about it! The wars end, the government gets straightened out, a new leader gets elected outside of the media chosen contestants...we all get to vote instead of the horse back driven electoral college bs...ultimately we beat the banks, ultimately we WIN they LOOSE! Anyone else think it's time for us to hit the RESET button!

September 20, 2008 at 12:11 pm

greedom

correction - SAW at lunch

September 20, 2008 at 5:10 am

greedom

Materialistic consumerism by venue of capitalism couldn't ever be any different or any better. eh ? I'm hearing the Price is Right introduction song. Give Americans back Wheel of Fortune, some lung diseasing popcorn, liqor, malt liqor, chicken wings, maybe some cheap veal with bone chips in it- and they'll be happy. All those 1970's prices are now real. I'll take the Alarm clock for $75 and... Too bad Barker didn't come out and explain the relationship of the dollar currency to the rest of the world currencies, and how any price becomes meaningless without that. Where is the 'educational game show' category' ? However, if America went back to primitive models of consumerism ? Wheel of Fortune might look like Jeopardy clip from Groundhog Day: - That's amazing. - "Lakes and Rivers" for . This South American lake drains into the smaller lake in Bolivia. - What is Titicaca? - Correct. - "Lakes and Rivers" for . - Milky colored... - from glacial clay... - What is the Rhone? If It's a Wonderful Life were to be re-written in context of todays financial institutions - it would be as if employees from the inside would be going 'George doesn't have any idea how overleveraged we are... heh heh, hey, did you get the new Porsche yesterday ? the one we say at lunch ? '

September 20, 2008 at 5:10 am

Premonition

Hey all, Stand up and stop being the victim. Show GWB, Ben, and Hank that their selective bail outs just aren't acceptable. Place your next two House payments and Credit card payments in between your mattress' for the next 60 plus days. When the collections departments try calling IGNORE them as though you are politician ignoring the poles and your constituents. Lets all see how much confidence BIG Business and The financial's have when more than 50 percent of home loans and credit card debt moves into the more than 60 Day late column. When you finally do make the payments don't pay additional interest, just tell them you credited your own account with bail out payments or guarantee. "It's an Emergency" GWB, Ben, and Hank all say so.

September 20, 2008 at 1:08 am

Matt Zanzalari

I recommend that everyone in the country read the book "The Creature from Jeckyl Island" it explains why the Federal Reserve was created and shows why the banking and investment sectors will always be bailed out. It is a rel eye opener that will make you wonder what is right with this country.

September 19, 2008 at 11:48 pm

Mike

Robert, you are ignorant. The "bailouts" do not go to the rich. They go to the banks. For example, I own stock in Fannie Mae, which was "bailed out." That money doesn't go to me or other shareholders. Our shares were practically deemed valueless. Without the banks, we starve our country. We cannot finance homes, autos, or other personal purchases without them. Businesses cannot finance their working capital. Small main street companies cannot afford payroll or expansion. The "bailout" is really a government investment being labelled as a "bailout." Without it, our economy would starve. With it (since it is an investment), our government may actually make money. Yes, some executives made excess compensation in the past, but they get nothing from the government investment. Also, I agree with Mihai from Romania. We did this to ourselves. How many people bought too much house? Where is their personal responsbility. If you bought too much house and cannot afford it, then it is your fault. You deserve to lose it just as I deserve to lose my Fannie Mae stock.

September 19, 2008 at 10:03 pm

Claudette`

The average American is totally helpless in understanding the complicated and mysterious nature of this entire bail out. I have spent the last 2 days searching the web to understand "short" selling, "puts" etc. and the layers of this entire debacle. My goodness, how can we even hope to ever understand the problem when the vocab is out of our league? No wonder they get away with this stuff, it's easy to steal from the ignorant. It's time for ordinary Americans to unite and demand full accountability and even more, send the crooks to jail after they give back their millions.

September 19, 2008 at 6:07 pm

Mihai D. Popescu

The powerful people in the financial sector will always win… But, of course, they can’t win without the "help" of cohorts of stupid ordinary people who swallow the bait of all kinds of "hypes" (as in this recent "real estate" frenzy). At the end of the day, why, you Americans, have crowded to buy millions and millions of houses? Was it for personal profit or for sheer personal needs? You speak about communism – in "real communism" they actually force you to do something (in this case to buy) but in the U.S. you rushed to buy willingly… Mihai, Bucharest – Romania (a former Communist country)

September 19, 2008 at 5:04 pm

comrade?

quote: TRILLIONS AVAILABLE FOR BAILOUTS FOR THE RICH, BUT I CAN’T EVEN GET A DECENT COST-OF-LIVING INCREASE ON MY SOCIAL SECURITY DISABILITY CHECK AND CAN’T EVEN BUY ENOUGH FOOD FOR THE MONTH. Robert, I'm sorry if I (and every other taxpayer) am not giving you enough. I can understand how that would make you angry that I (and every other taxpayer) am giving more money to someone else. Personally, I pay a ton of social security into a system I will never use. So maybe I (and every other taxpayer) should be angry that we are not getting anything free from the government too. It's really not communism if I'm not living off someone else as well. I think we're talking more about socialism here. Or at the very least we're talking about a pot & a kettle.

September 19, 2008 at 4:56 pm

Clint Lovell

Where was the ban when Global Crossing hit the skids? Where was the sudden concern when Enron turned into Subron? It goes to show that when the potential losers in the market will be the commercial bankers and investment bankers, they are willing to do whatever it takes - including (once again) rewriting the rules to protect each other at our expense. The sum total of this "in your face" punch in the gut from the SEC shows why Cox is so over-rated and should be cashiered without further discussion as the ranking failure of his time - the new Herbert Hoover. He regulates us little investors right out of the market to control profits for his investment banking cronies while we pick up the tab. You don't see those billions of performance bonuses being placed at risk do you? No sir. Won't happen. For Wall Street, capitalism means they can shift the losses to us while they maintain their personal fortunes. Now we know how the top 5% got to be there. Crooked dirtbags. There is no curse in English that would sufficiently describe the treachery and outright theft being condoned and promoted under the guise of government oversight. I hope John McCain is elected and puts the whole lot through the grinder. If you rendered the whole lot you couldn't get enough scruples to fill a leaky condom.

September 19, 2008 at 4:55 pm

not really

Folks this isn't Socialism i.e. China We now have a government what has commingled with business kept the rich on top engaged in two wars without end and spies on it's citizens and arrests them when the peacefully demonstrate - we are talking FASCISM.

September 19, 2008 at 4:21 pm

Laura

Sign me up - it's time for us to have a new Civil War and reclaim our country. It would not take much to awaken Americans, organize a revolt, and hold all these crooks accountable!!! I'M SICK TO DEATH OF WHAT IS HAPPENING TO MY COUNTRY!!!

September 19, 2008 at 3:19 pm

Jim Belishi

The manipulations are so flagrant. With a little analysis one can see that the low in the indovord were at a major retracement so, the idea is that this is the reason things didn't happen before now.

September 19, 2008 at 1:55 pm

greedom

I'd say if you even have a 1 to TWENTY - let alone 50 or 100 or higher ration of assets to debt... Let's just DIVIDE your value by - oh wait, if that debt you carry isn't BACKED by anything ? oh no You'll join the list of out of business by Monday. This is like that final wave of light in the last scenes of The Perfect Storm. Right before Clooney goes: "It's not going to let us out !" then darkness again.

September 19, 2008 at 1:38 pm

greedom

Imagine the top winners in Lehman bear run. Really - 600+ Billion to zilch on the way down, shorting Lehman, my god. I wonder if anyone hit 11 figures.

September 19, 2008 at 1:36 pm

greedom

Too little too late July 2007 escalated damage incorporated to inflict wounds so deep... ? I don't think people have even asked what just happened. It's like giant airliners of debt and shorted bear runs just collapsed Bear Stearns, Lehman, Fannie and Freddie, AIG, citi next week, Merryl - GOES on.. - 'as if' a laundering process ("Hey - that bear ate Billy, Billy is evidence we were here, Kill it !") this is Savings and Loan on steroids. Cash in in SO many ways - unfort. those days are over. and guess who gets cleanup tab for aisle eleven ? We might as well be Otto in Repoman. The 'Millers' of Repoman don't touch online forums or blogs I'm sure.

September 19, 2008 at 1:34 pm

ann

I think that the CEO's of these failed financial and insurance instituitions should be forced to fork over their mulitmillion dollar salaries and bail out their own messes and face jail time just like the Enron fiasco. It is an abomination what these CEO's allowed to happen for their own GREED

September 19, 2008 at 1:03 pm

Jonas Grumby

Robert, You're right...we don't have a capitalist society. We've privatized the profits and socialized the risks. That's not capitalism. In a true capitalist society, all these companies would have been allowed to fail. Yeah, very painful. But free-market.

September 19, 2008 at 12:42 pm

Robert

TRILLIONS AVAILABLE FOR BAILOUTS FOR THE RICH, BUT I CAN'T EVEN GET A DECENT COST-OF-LIVING INCREASE ON MY SOCIAL SECURITY DISABILITY CHECK AND CAN'T EVEN BUY ENOUGH FOOD FOR THE MONTH. Don't EVER again talk to me about the glories of capitalism. What we really have here is obviously socialism for the rich only. This is the biggest robbery of the people and transfer of wealth to the rich and elite of the capitalist class in history. Secretary Paulson talks about how we have to protect the banks and investors against "systemic risk" and "illiquid assets" -- hell, how do I get a deal like that??? What a crock. I will NEVER again vote for a Republican or Democrat. I am no longer fooled by the diversionary tactic of finger pointing. I'm sick of it, and of Democrats and Republican crooks and their Wall Street cronies. From now on I'm voting for the PSL (La Riva/Puryear), which is now on the ballot in my state of Arkansas. If we are gonna have communism, then by god I want it to benefit ME, and screw the rich Wall Street robber barons and their criminal politician buddies. Will even one of these crooked CEO's end up in jail? Nope, instead they will get million dollar bonuses! I am 64 years old, and I have obviously wasted my life defending a lie and a country that doesn't give a crap about "the people." How stupid I was... Wall Street is smiling today (I would be too, if the taxpayers paid all my bills and protected me against all risk), but now I hope I live to see the day that capitalism comes crashing down on their crooked stinking heads. For the President and Secretary of the Treasury to stand up there and tell us this massive "bailout" (robbery) is 'for the good of the people' is an insult to my intelligence that makes me wanna puke. So now we have capitalism without risk or penalty for outright criminal acts! A "nanny state" for the rich. WORKERS AND OPPRESSED PEOPLE OF THE WORLD UNITE!!! Have a nice day, COMRADES...

September 19, 2008 at 11:31 am

Steven Wilson

They know what they are doing. They are loaning money that their banks don't have. They use dirivatives insurance contracts from MBIA...AMBAC...AIG and so forth and so on. These insurance agencies insured these loans in case of a default. Thus....the bank never had to put them on their books or have any collateral to cover loses on these loans that they made. It's called Stealth debt. AIG was the Stealth Fighter, carrying the debt above everyones head in the sky....out of view. When AIG didn't have enough money to cover the loses that these bundled debts incured from the real estate crash.....they started paying off what they could....and cutting back on fuel purchases for the plane. AIG's Stealth fighter was almost out of fuel......bankrupt.....and had to land. This would take all the debt out of stealth mode. All of these financial institutions would have a naked guy, with a sign, saying Goldman Sachs....Lehman Brothers....merrill Lynch....and so forth and so on. The Kings had lost their clothing... and would be naked and broke, in front of the entire world. The have no capital to cover these debts. They are insolvent. This is why AIG was bought out and refueled by the United States Government. Wednesday had a bank run on money market funds....you "CAN" lose your money on them.The bank run has caused the government to give away taxpayers monies to save the entire banking system from collapse. 1929 bailout all over again.

September 19, 2008 at 10:52 am

Isaac Taylor

What a relief!! Finally a financial editor with some common sense. How in the name of all that is objective, can Goldman, Morgan, Merrill, etc. advocate a ban on short selling? E-V-E-R-Y S-I-N-G-L-E M-O-R-N-I-N-G do not their own algorithmic based black box trading systems fade long orders at the open only to cover later in the early session? Short selling is how these investment banks have made their billions, taking the average investor and the small time trader to the poor house in the process!! Talk about welfare recipients. Talk about cry babies. Talk about being able to dish it out but not being able to take it. Talk about chickens coming home to roost. Talk about a system being rigged to help the rich maintain their riches when poverty seems to be too close for comfort. (we'll just change the rules....it's our ball anyway) Great article by Elizabeth MacDonald written with all levity.

September 19, 2008 at 10:48 am

me

It means less liquidity and a prolong bear market instead of a short one

September 19, 2008 at 10:27 am

about this blog

  • Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.

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