Friday, Sep 19, 2008
Short-Sale Restrictions Are an Exercise in Naked Power
Mises: Short-Sale Restrictions Are an Exercise in Naked Power
So, government are banning short selling. Is it because they want to force their Marxist Capitalist solutions onto the economy and do not wish the free market to determine the new economic order? Austrian Economists at Mises argue that short sellers are a key financial check and balance that help the market correct itself. Many put actions like this as how the Great Depression was solved in the 1930's. Peeps at the Mises Institute argue that the policies are the reason why the crisis last ed so long, that the free market a) would not bhave caused the crash in the first place and b) that free market principles would have resulted in a short sharp correction back to normality.
Also read: Don't sell short selling http://mises.org/story/2527 -
Posted by planning4acrash @ 11:05 AM (362 views) Add Comment
7 Comments
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1. Mariothegreat said...
They should ban for ever an ever the futures and the options, if not related to an open position of course, in fact it was, and still it is, immoral making money from stones.... if the vulture financiers want to make money they should risk all their money no the saver money..... When you are buying a future it should be to protect the share in a wrong decision, instead this useful tool is used just to bet, please go to the casino instead!
2. harold said...
Eloquent logic from the Mises Institute as usual, which will, as usual, be totally ignored.
3. mountain goat said...
It would be interesting to know how much of this rally is just short sellers forced to buy back their shorts. This is complete disaster for them, the debt amnesty story together with a ban on short selling. Bringing in this rule when there must be a huge amount of short positions around is as you say using "naked power" to burn them. I have no problem with short sellers but they are the predators of the world so they can expect to be treated roughly.
4. Dbc Reed said...
Anything with von Mises' name on it can be disregarded.Please check out LvM's academic credentials: jobs where he was n't paid a salary;an involvement with the short Dollfuss dictatorship ( Dollfuss was under five feet tall) in Austria where his deflationary policies led to fighting in the street.What we really want in this predicament is violent deflation: not.
5. planning4acrash said...
Mountain Goat, the point is that, in a free market economy, without central bank fiat, short sellers would have a much smaller impact, because there would be less imbalances. Government intervention causes the imbalances that short selling anticipates and deals with. Government destroy short sellers, because the free market works against their Marxist/Capitalist command and control approach to managing the economy.
6. techieman said...
Mario you miss the point. For a futures to be used as a hedge, the other side must be taken by someone. That someone is either a speculator or an institution.EIther way either side is (depending on your viewpoint) a speculator or a hedger or both.
7. Mariothegreat said...
Hi techieman, I know it quite well because I'm dealing with bank since the seventies but what I want to say is that I am fed-up with parasities , in theory when you buy a share is because you believe in the company, in the last 30 years people are only trying to make a quick profit, it's wrong! we created a massive amount of non-real money, and it's not fair for all the people that had invested in the long term to protect their pension etc...
Today for the first time in ages they are paying the bill... they have to buy the shares that they sold without to own them hahaha... God exist!
Cheers
Mario