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The Masked Tulip

Short Sellers - Any Gone Bankrupt In The Last 48 Hours?

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Surely the share market has already factored in the known issues surrounding a particular company and that is reflected in the share price at that particular moment in time ?By that token, shorting a share (betting that it will go down further than today) suggests some insider knowledge ?

Is it not a good thing to stop it ? If you want to invest or speculate, buy and sell shares, if you want to gamble, go on party poker.

Do you really want to be taken to task on this BS?

You haven't thought this through have you? Either that or you are perfectly happy with logical inconsistencies ... then again it's a common affliction, especially when vested interests are involved.

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Shorting is a necessary part of any real market. Without it artificially high prices are maintained.

Do you want to know what you get when shorting is not allowed?

The UK housing market.

Do some research into shorting before you post in support of this headless chicken response from the FSA.

I short all the time and lost yesterday. However I will be shorting more (US markets) once this dead cat bounce is done.

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If only there were short sellers. They'd have to buy tomorrow!

The notice places a ban on "short selling" so we have interpreted this as that we are unable to open new or add to existing positions but places us under no obligation to close any short positions.

We were just discussing that we expect to hear of massive hedge fund losses simply on todays financials move. Not necessarily because of the ban of short selling.

"FOR IMMEDIATE RELEASE

2008-211

Commission Also Takes Steps to Increase Market Transparency and

Liquidity

Washington, D.C., Sept. 19, 2008 — The Securities and Exchange

Commission, acting in concert with the U.K. Financial Services

Authority, today took temporary emergency action to prohibit short

selling in financial companies to protect the integrity and quality

of the securities market and strengthen investor confidence. The U.K.

FSA took similar action yesterday.

________________________________________

Additional Materials

• Emergency Order, Release No. 34-58592.pdf

• Emergency Order, Release No. 34-58591.pdf

• Emergency Order, Release No. 34-58588.pdf

• Form SH

• Form SH Instructions

________________________________________

The Commission's action will apply to the securities of 799 financial

companies. The action is immediately effective.

SEC Chairman Christopher Cox said, "The Commission is committed to

using every weapon in its arsenal to combat market manipulation that

threatens investors and capital markets. The emergency order

temporarily banning short selling of financial stocks will restore

equilibrium to markets. This action, which would not be necessary in

a well-functioning market, is temporary in nature and part of the

comprehensive set of steps being taken by the Federal Reserve, the

Treasury, and the Congress."

Today's decisive SEC action calls a time-out to aggressive short

selling in financial institution stocks, because of the essential

link between their stock price and confidence in the institution. The

Commission will continue to consider measures to address short

selling concerns in other publicly traded companies.

Under normal market conditions, short selling contributes to price

efficiency and adds liquidity to the markets. At present, it appears

that unbridled short selling is contributing to the recent, sudden

price declines in the securities of financial institutions unrelated

to true price valuation. Financial institutions are particularly

vulnerable to this crisis of confidence and panic selling because

they depend on the confidence of their trading counterparties in the

conduct of their core business.

Given the importance of confidence in financial markets, today's

action halts short selling in 799 financial institutions. The SEC's

emergency order, pursuant to its authority in Section 12(k)(2) of the

Securities Exchange Act of 1934, will be immediately effective and

will terminate at 11:59 p.m. ET on October 2, 2008. The Commission

may extend the order beyond 10 days if it deems an extension

necessary in the public interest and for the protection of investors,

but will not extend the order for more than 30 calendar days in total

duration.

The Commission notes today's similar announcement by the U.K. FSA.

The SEC and FSA are consulting on an ongoing basis with regard to

short selling matters and will continue to cooperate in carrying out

regulatory actions.

The Commission also has taken the following steps to address the

recent market conditions:

Temporarily requiring that institutional money managers

report their new short sales of certain publicly traded securities.

These money managers are already required to report their long

positions in these securities.

Temporarily easing restrictions on the ability of securities

issuers to re-purchase their securities. This change will give

issuers more flexibility to buy back their securities, and help

restore liquidity during this period of unusual and extraordinary

market volatility. "

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Surely the share market has already factored in the known issues surrounding a particular company and that is reflected in the share price at that particular moment in time ?By that token, shorting a share (betting that it will go down further than today) suggests some insider knowledge ?

Is it not a good thing to stop it ? If you want to invest or speculate, buy and sell shares, if you want to gamble, go on party poker.

what if you want to take a view on a share going down but don't own it?

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Shorting is a necessary part of any real market. Without it artificially high prices are maintained.

Do you want to know what you get when shorting is not allowed?

The UK housing market.

The UK housing market is going down without any shorting. Shorting just rides on the back of normal sellers and buyers.

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Efficient and effective markets require short selling; no company ever went bust because of short selling.

The ban is extremely silly and desperate, and in the long run its primary effect will be to undermine confidence further.

A similar ban came in after the 1929 Crash and was followed by a years-long depression...

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The UK housing market is going down without any shorting. Shorting just rides on the back of normal sellers and buyers.

Oh of course. I forgot. And no boom at all in house prices - it was all very orderly and restrained.

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Oh of course. I forgot. And no boom at all in house prices - it was all very orderly and restrained.

Shorting works so well in stopping stock market booms :)

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HBOS short interest is not 3%, it is 5.6%.

A hedgefund can go bust, it is unlikely but not impossible. Gross exposure is typically 150-200% of net assets in equities, in some other asset classes much higher. Derivatives can increase the effective leverage massively.

This whole area is much misunderstood. At times of risk aversion, where investors sit out of the market, a modest amount of selling will have a disproportionate impact on a share price. The fall in the share price might then lead the market to become unduly concerned because of the share price fall, and so you can get a vicious circle forming, and where it is financials where confidence is essential, it impacts the underlying business in a way that cannot happen in other industries - so there is sense in their being more checks and balances for financial companies.

It is easy to blame short sellers, but if a share is very cheap and someone wants to sell them very cheaply, I'd suggest the long-only community should be delighted to have the opportunity. Equally, when hedge funds were sparser on the ground at the end of the 1990's, there was not the mechanism to check the unabounded enthusiasm for absurdly priced tech shares.

I think consultants have a huge part to play in the problems - whilst supposedly they are there to highlight poor fund managers, what they in fact do is the reverse - call it the law of unintended consequence, or reactionary behaviour - all good fund managers have bad years, there is lots of study on the matter, and the sad fact is, generally after a bad year or so the performance bounces back, but consultants manage to lift people out at the bottom and hand funds to those coming to the end of a good run. They encourage fund managers to closet index, avoid risk, and wherease you might think you'd want your fund manager to step up when prices get really attractive, step back when value is poor, the risk of getting it wrong far outweigh the benefits of getting it right, hence the current environment where financial shares are left alone by the long only managers.

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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