Finally, people are waking up to the fact that its time to tell the short sellers to go home:
A European market regulator announced Thursday night that short-selling of financial stocks in several countries would be temporarily banned in an effort to stop the tailspin in the markets.
The move may put pressure on United States market regulators to ban short sales as well. American bank stocks have been volatile all week as global investors expressed concerns that problems in Europe might cross the ocean.
The European Securities and Markets Authority, a body that coordinates the European Union’s market policies, said in a statement that short sales — negative bets on stocks — would be curtailed in France, Belgium, Italy and Spain effective Friday. There is already a temporary short-sale ban in Greece and Turkey.
“Today some authorities have decided to impose or extend existing short-selling bans in their respective countries,” the authority said. “They have done so either to restrict the benefits that can be achieved from spreading false rumors or to achieve a regulatory level playing field, given the close interlinkage between some E.U. markets.”
In France, that country’s market watchdog banned short-selling or increasing short-selling positions, effective immediately, for 15 days on 11 financial institutions. They are: the April Group, Axa, BNP Paribas, CIC, CNP Assurances, Crédit Agricole, Euler Hermès, Natixis, Paris Ré, Scor and Société Générale.
The European authority’s statement said that details for each country would be posted on the Web sites of their individual financial regulators.
Short sellers are the reason that 100 point drops become 500 point drops. Especially when you find that it is large firms-like Goldman Sachs that are playing both sides against the middle like they did in 2007, when -while they were pushing subprimes-they were betting against them and the housing market.
Small investors like me can’t short sell-it is too risky. I firmly believe the practice should be banned.