Greg Feirman1

Playing for a Bounce?

I said the government is "sort of" making it illegal for stocks to go down. I was being somewhat literary rather than literal here.

The whole idea is that they're going after short sellers right now because they want to stop the market from going down. Anybody disagree that that's why they made this announcement when they did? The point was to intimidate and help the market out.

All the details about naked short selling don't concern me. It makes sense that you should have to line up the shares first. But the SEC's intention was to stop stocks from going down and use the force of their government power to that end. Hence they are "sort of" making it illegal for stocks go down.

When the people with the guns (i.e. power) start to flex their muscles to some end, in this case stopping stocks from going down, it's worth paying attention to and it will probably be, ceteris paribus, effective to some extent.