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Like Italy, Spain bans short selling for three months - and perhaps beyond. The ban includes...
Jul 23 2012, 08:35 ET
Like Italy, Spain
bans short selling
for three months - and perhaps beyond. The ban includes derivatives and over-the-counter instruments.
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Shorts are bad for the economy.
People like Einhorn have a following and at the nod of his mouth, the pack/cult/union jumps on solid companies and destroy them (HLF, NUS).
Low valuations hurt these companies in various ways (ability to raise cash for example...).
All these financial types invented synthetic tools to profit from their massive positions.
What happens is that the private investors WILL sit out until Wall St gains their trust again. Until then, it will be a dis-functional "stock market" or shall we say casino for - Corozine, Dimond, Dimon and their friends.
BAN SHORTS on EVERYTHING !!!
If you don't like a stock - don't buy it. Buy the stuff you like. period.
Then we'll have a stock market which supports the economy and helps create jobs, rather than a mechanism for the financial types to rob working people out of their savings
OCCUPY WALL ST !!!
23 Jul 2012, 08:49 AM
I think you have a distorted view on what shorts do for a market in general. Would you rather have the Shanghai market? Up until a couple years ago there were no shorts really and oh yeah, most listed companies were fraudulent in some way or other!
23 Jul 2012, 08:51 AM
Is the game rigged? Probably. Is there corruption on wall street? Yes. Do the criminals on wall street need to be tried and convicted with life sentences in hard core prisons? Yes. Did wall street bilk billions from taxpayers? Yes. Was the subprime market created by wall street bad for the economy? Yes.
Is shortselling bad for the economy? . . . NO. If you really dig into the dynamics of short selling and how it functions in the market, you would see this. Here are a few functions:
1) Almost all market rallies start because shorts start covering or they are being forced to cover. Having short interest guarantees that buyers will come in. The market will never go to zero. Why? Shortsellers.
2) People like Einhorn would not be in the market if he couldn't hold short postions. Remember Einhorn has long postions also. Having short positions hedges long exposure. If you can't hedge long exposure, you will drive money out of the market. That's bad.
3) All short postions are backed by cash or by assets. For example, if I were short only with my online broker, I would have to have cash in my account. That cash gives my broker the ability to loan to margin accounts whereby people could buy a little extra HLF if they so choose. In other words, it pumps money into the system.
4) Are people like Einhorn pumping their books? Yes. But we need shortsellers to pump their books. Why? Because for every shortseller pundit, there are a hundred sell siders pumping their books and creating bubbles.
5) Shortsellers are generally more cautious in their choices and more exhaustive in their research. They have to be because of the greater risk they take. Not the same for long only because the market has an upward bias. If the market were long only, then we lose checks and balances. The skeptics give the market validity. It's always the shortsellers that pour through sec filings to uncover fraud or shenanigans. The market needs these skeptics, and we need to give them a financial incentive (profit) to keep them here.
I'm not saying that there isn't a problem with wall street. I totally concur, and it needs to be fixed. But banning short sellers is a recipe for disaster.
23 Jul 2012, 08:31 PM
So if you want to short European stock markets...you have to short
23 Jul 2012, 10:23 AM
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