Another member country of the Global Plunge Protection Team has joined the fray in the rush to ban short selling. Australia has done us one better though by banning shorting any & all stocks in their markets:
The Australian Securities and Investments Commission Sunday banned covered short selling of all listed shares following moves by other countries to ban short selling of financial stocks.
In a rapid escalation of the clampdown on short selling, ASIC said in a statement that it had decided to ban covered short selling from the start of trading Monday because a number of countries had banned covered short selling of financial stocks and there was a risk that if Australia didn’t follow with its own ban that there would be a risk of “unwarranted activity” in the Australian market.
“These measures are necessary to maintain fair and orderly markets (ed: yeah right!) in these exceptional times of global crises of confidence in financial markets,” ASIC Chairman Tony D’Aloisio said in a statement.
“Because of the relatively small size and the structure of the Australian market, it is necessary to extend the prohibition to all stocks,” he said. “To limit the prohibition to financial stocks, as has been done in the U.K., could subject our other stocks to unwarranted attack given the unknown amount of global money that may be looking for short-sell plays.”
The article also mentions that several other countries have banned shorting financial stocks:
The U.S. and the U.K. moved late last week to ban covered short sales in financial stocks. Countries that have now followed are France, Germany, Switzerland, Ireland and Canada (Ontario), and other regulators are assessing their responses.
Absolutely ridiculous. I feel like I am in The Twilight Zone.
Ya know? These are the last days my brotha. :-SS
I don’t know how to do anything else, though. I can’t go back to the software world!!!
Noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo
Tell me about it. But I meant the end of days… end of the world… game over… so I guess we won’t have to worry about learning new trades.
Oh, ok. That was close. I was worried you just meant the end of trading as we know it.
At least I can cancel that book order I just made…”Oracle Database 11g PL/SQL Programming “.
Come to think of it, I would rather the world end than actually have to read that.
All it means is more action on Puts which would in turn create higher volatility. You could use this to your advantage.
I keep doing double takes with financial news because I think it is coming form The Onion.
I can’t believe it! From 2003 to this August, I had never shorted a stock. As soon as I start getting good at it, I find out that they might not let me do it anymore. This is probably all my fault. I’m sorry everyone.
This is getting absolutely ridiculous. There are so many other things Australia could have done if they really feared a “shorting invasion.” I see MAJOR unintended consequences coming down the road…
Surely, governments will start banning ALL sales of stock. Only buy orders will be permitted. Oh, whoops! If there is no one to sell, how can we buy? D’oh! OK, just mandate that prices will go up 0.1% a day…etc…
Mike, this comes after they said on the 19th that “covered” short selling (as opposed to “naked”) would still be ok
Man this is a classic. We both do something wrong, but if I can point my finger at you long enough the attention will be put more on you and everyone will forget who “really” started all the trouble. If I ran my company well enough the shorts would be less interested in my stock. And here I thought all the trouble we are facing was due to poor fiscal management and greed. I guess I was wrong, b/c the powers to be are saying it’s the short sellers.
Just when I about to make transition to being fulltime trader, these events are holding me back.
Reinstate the uptick rule immediately and enforce it to the max. If that doesn’t get this crap of driving stock prices into oblivion,stop short selling completely and forever!!!!! This is the type of communication that needs to be sent by all mom and pop and other long position investers to the SEC. Anybody interested can get their E-mail address by going to yahoo and looking up SECURITIES AND EXCHANGE COMMISSION.
I think we all realize that what we’re seeing is the start of a new era in the financial markets where government will be very heavy-handed. This is just the beginning.
As I pointed out today, every time an order is accepted for goods which are yet to be produced, the vendor has sold short (assuming the revenue from the order is recognized).
That is, he has sold a thing which is obliged to provide at some future date, but which he does not currently possess.
If these numpties think that selling short depresses prices, when the most-shorted stock on the ASX is SEV, which as I pointed out in today’s OzRant has short interest at a ‘whopping’ 2.7% of float.
And SEV is not the most underperforming ASX200 stock by a long chalk (it is not even last in its GICS sector).
QAN sellsa lot of airline flights before they are produced – and as we know from Compass and XL (overseas), sometimes an ordered airline seat doesn’t get delivered.
Let’s ban QAN from charging for seats until the plane is actually on the tarmac an ready for takeoff. See if THAT sort of short-sell ban helps the economy.
Cheerio
GT
France (but I’m a-Strayan)
my country also plan to ban the short selling, i think it’s should be done sooner.
More stocks added to the “no short” list including GE.
it’s just more flannel to cover up the real causes,after all, who would lend their stock a second time to have the price driven down, after it was returned to them at a lower value?