Ban on shorts in Europe

[Wizard]

The last time they banned short selling in the USA things got worse! So now expect more of the same! Dont they ever LEARN!!

[PaulC]

no. Thats the problem with these keynsian types. Lets do more of the same! Lets remove the luquidity the shorts provide. I know, lets ban longs when the price goes up

[DEP]

Yep... it doesn't work. French banks are sell off again this morning. Its sends a negative signal to the market i.e. "the government is panicking - so it must be bad"

[Wizard]

Yes it removes liquidity. The short selling in USA was banned on 18 September 08 when the DOW was still at 11000. The rest is history!!

[richardw]

I suspect there's a bit of a causation-correlation discrepancy between banning shorts and what happened in 2008, but it certainly sends an alarming message that they need to do that. I am fairly sure there are short specialists that keep klapping EU countries, and this is likely meant to head them off. Still, the smarter ones will find ways around it.

[SimonPB]

I wouldn't say that the ban on shorts was the only reason for the collapse ??

[Wizard]

Obviously not, but it exacerbated the fall and could be used as a reliable indicator on things to come now.

[#8]

Ban Shorts.It doesn't work.But tell politicians that.Anyway,it's a great trading environment...no?

[#9]

So let me ask a question - if a hedge fund is expecting a short ban - and they will effectively not be able to hedge, what do they do? Exit their long positions?

[#10]

They wait.

[#11]

The other thing that is rediculous, is that the argument here is that short sellers have an incentive to flog rumours in an effort to drive down markets. I still struggle to see how this can apply to short sellers only - since those looking for bargain basement longs are also incentivised to create panick. A load of bollocks IMO. I really struggle to see how the short selling mechanism, on its own, can drive down a market.

[PaulC]

Normal short selling cant. Naked short selling is another story.

[Blik]

I would appreciate a ban on those skinny French Riviera and shorts, as opposed to the fatter American ones. Now that would make some watching...LOL. Sorry - it's Monday and I need to think about the positives.

[Fredsed]

When politicians poke traders withdraw.