Comments on: Doh!

By: Anonymous

Anonymous — Mon, 05 Oct 2009 07:35:00 +0000

Set the brackets in place and slide the head rail of the blind. Insert the covering that will keep the blind date uncensored from falling and finally, attach the 'magic' wand to open or close your blinds.

By: mjh

mjh — Fri, 19 Sep 2008 13:04:57 +0000

Hey, I've got an idea: let's also take care of all of those pesky hurricanes by banning any weather forecasts that predict them.

By: tiger

tiger — Fri, 19 Sep 2008 11:46:45 +0000

I am really baffled when otherwise intelligent and experienced analysts on TV come up with the indefensible "You can't let AIG go down, you just can't!". Then when there is turmoil in the market place and people want to fairly trade (long, short or whatever) it is viewed as almost "criminal" to allow in this time of "crisis" by the same analysts. Don't these guys know that capitalism has an up and a down? What are they thinking? All reward and no risk? This whole matter with saving a failed company, stopping otherwise legal trading practices and the like just "kicks the can down the road" on problems. The beauty of a free market is that issues are discovered (by the market no regulators) and disposed of. The long term effect of removing the "disposal" process is that we will all greatly suffer (no big downside always means no big upside).

By: Flash Gordon

Flash Gordon — Fri, 19 Sep 2008 11:38:24 +0000

I understand that even though this rule goes into effect immediately there is still a comment period. I hope Mr. Boudreaux will send the SEC his comments.

By: Flash Gordon

Flash Gordon — Fri, 19 Sep 2008 11:34:45 +0000

I thought the problem was failure to deliver, not short selling. So called "naked short selling" exists when the short seller has not made an arrangement to borrow stock for possible future delivery before making the short sale. But even in that case there is no problem if the seller covers the sale with delivery by the settlement date. Intentional failure to deliver, i.e., making a short sale with out first obtaining borrowed stock AND having an intention not to do so should the stock price rise, is and always has been illegal under the Securities Exchange Act of 1934.

So, is this new rule a prophylactic rule to prevent already illegal naked short sales by outlawing all short sales (temporarily)? It seems that it is not just the failure to deliver that the SEC wants to prevent, but all downward pressure on stock prices. If so, that seems to be just the sort of market manipulation that the Exchange Act is meant to prevent. I suppose nobody thinks about it when it is the SEC that is doing it.

Someone needs to tell the SEC that sometimes it is a good thing for stocks to go down and for companies like Lehman Brothers to fail. And preventing the normal function of a vigorous market that rewards and punishes, makes mistakes and then corrects them, can be a very bad thing.

By: Don Boudreaux

Don Boudreaux — Fri, 19 Sep 2008 11:07:56 +0000

Martin,

You point seems to be that it's either practically impossible for the SEC to ban short-selling or that the SEC isn't serious about doing so.

You might well be correct. In fact, I'm pretty sure that you ARE correct. But this fact doesn't mean that government efforts, or even empty proclamations, against market institutions that encourage prices to reflect reality are sensible and not deserving of ridicule.

By: jg

jg — Fri, 19 Sep 2008 10:49:59 +0000

Well said, sir.

By: Martin Brock

Martin Brock — Fri, 19 Sep 2008 10:47:03 +0000

If Don sells me a right to sell his share of Merrill Lynch today, if I'll return another share to him in the next sixty days, right here in this web forum, what happens? Do uniformed men wearing flack jackets and toting assault rifles burst into Don's office?