What the SEC's Ban on Shorting Really Means

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

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.

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.

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...

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.

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

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.

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.

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.

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.

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!!!

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.

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.

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.

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)

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.

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.

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.

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.

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 ? '

correction - SAW at lunch

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!

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.

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.

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.