Bans on short sales are not new. Napoleon not only outlawed the practice but had perpetrators imprisoned. In the first half of the 19th century, short selling was banned in the U.S. due to speculation regarding the War of 1812. The ban remained in place until the 1850s.
After the market crash of 1929, short selling was restricted again. During the four-year industry-wide bear raid initiating the Great Depression, the Dow Jones Industrial Average was reduced to 10 percent of its former value. Whenever the market decline slowed, speculators would step in to sell millions of dollars’ worth of stock they did not own but had ostensibly borrowed just for purposes of sale. Concerned about reports of bear raids by short sellers, Congress gave the newly created Securities Exchange Commission (SEC) power to regulate the practice. Today short selling is not illegal, but market manipulation – intentional conduct aimed at deceiving investors by artificially affecting stock prices – is.
https://www.globalresearch.ca/squeezed-shorts-time-ban-short-selling/5819875
@metal-brain saidBan stock markets altogether.
Bans on short sales are not new. Napoleon not only outlawed the practice but had perpetrators imprisoned. In the first half of the 19th century, short selling was banned in the U.S. due to speculation regarding the War of 1812. The ban remained in place until the 1850s.
After the market crash of 1929, short selling was restricted again. During the four-year industry-wi ...[text shortened]... g stock prices – is.
https://www.globalresearch.ca/squeezed-shorts-time-ban-short-selling/5819875
That sort of gambling damages economies.
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@metal-brain saidToo many politicos on both sides of the aisle making too much money out of it, coupled with insider trading for any real change to happen.
Bans on short sales are not new. Napoleon not only outlawed the practice but had perpetrators imprisoned. In the first half of the 19th century, short selling was banned in the U.S. due to speculation regarding the War of 1812. The ban remained in place until the 1850s.
After the market crash of 1929, short selling was restricted again. During the four-year industry-wi ...[text shortened]... g stock prices – is.
https://www.globalresearch.ca/squeezed-shorts-time-ban-short-selling/5819875
First thing you’d need to do is stop serving federal positions from having portfolios but that’s probably a non starter too.
@kevcvs57 saidOf course. Rich people want to be able to profit from everything possible. Now they can profit from disasters. They can take short positions right before they start a nuclear war.
Too many politicos on both sides of the aisle making too much money out of it, coupled with insider trading for any real change to happen.
First thing you’d need to do is stop serving federal positions from having portfolios but that’s probably a non starter too.
Nobody should be able to profit from disaster. Nobody should be able to profit from the destruction of wealth. That is what short selling enables selfish people to do and wealthy people are some of the most selfish people on the planet.
@metal-brain saidNo I’m not saying they should be able to, I’m saying when the referee is betting on the outcome of the game do not expect a fair result
Of course. Rich people want to be able to profit from everything possible. Now they can profit from disasters. They can take short positions right before they start a nuclear war.
Nobody should be able to profit from disaster. Nobody should be able to profit from the destruction of wealth. That is what short selling enables selfish people to do and wealthy people are some of the most selfish people on the planet.
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@kevcvs57 saidAre you saying people should be able to profit from the destruction of wealth?
No I’m not saying they should be able to, I’m saying when the referee is betting on the outcome of the game do not expect a fair result
Don't forget that includes nuclear war when no creation of wealth happens at all and a lot of wealth is instantly destroyed.
People should be able to profit from a nuclear war via short selling? You don't see anything fundamentally wrong with that?
@metal-brain saidI don't know much about this, but no one on this forum does, so...
Bans on short sales are not new. Napoleon not only outlawed the practice but had perpetrators imprisoned. In the first half of the 19th century, short selling was banned in the U.S. due to speculation regarding the War of 1812. The ban remained in place until the 1850s.
After the market crash of 1929, short selling was restricted again. During the four-year industry-wi ...[text shortened]... g stock prices – is.
https://www.globalresearch.ca/squeezed-shorts-time-ban-short-selling/5819875
Short selling is supposed to be useful for balance, pricing stocks at appropriate value despite in some cases valued based on opinions and extreme speculation by people who are only interested in the price going in one direction. Like that guy who figured out how all the real estate speculation was so over-valued in 2008. In principle, in these kinds of environments, you need short sellers who have the financial incentive to find and uncover companies who are way overpriced or operating unethically.
Of course you can always have times where historically bad markets require temporary halts on short selling, as you point out. I don't think an outright ban is a good idea for anyone. If you ban short selling you are likely to have more fraud and market volatility as there would be overvalued companies out there and no one with any financial incentive to call them out.
@wildgrass saidAre you saying people should be able to profit from the destruction of wealth?
I don't know much about this, but no one on this forum does, so...
Short selling is supposed to be useful for balance, pricing stocks at appropriate value despite in some cases valued based on opinions and extreme speculation by people who are only interested in the price going in one direction. Like that guy who figured out how all the real estate speculation was so ove ...[text shortened]... re would be overvalued companies out there and no one with any financial incentive to call them out.
@metal-brain saidIn the case of the housing market from 2008, yes. That was fabricated wealth, created on paper only.
Are you saying people should be able to profit from the destruction of wealth?
@wildgrass saidYes, and short selling was halted temporarily back then.
In the case of the housing market from 2008, yes. That was fabricated wealth, created on paper only.
https://www.sec.gov/news/press/2008/2008-211.htm
Why not ban all short selling? People should not be able to profit from fabricated wealth. Investing should only be rewarded for creating wealth. If you don't like certain stocks then sell them. Don't own them. Betting on a loss should not be profitable.