Government regulators are now saying traders cannot short nearly 800 financial stocks, and more companies are trying to qualify for the non-shorting status.
- Are more companies in trouble than the highly publicized ones like Washington Mutual, Wachovia, etc.?
- Banning short selling has not worked on the few occasions it was tried in the past.
- Limiting short selling erodes confidence in free markets – and the U.S. has been the shining example of free markets historically.
- Limiting short selling sets a bad precedent like the soybean embargo in 1974 did in setting the stage for the first OPEC oil embargo.
- Government rules – on the one hand, they won’t let you buy freely (oil); on the other hand, they won’t let you sell (financial stocks).
Have an AWESOME week!