Christopher Cox: In Search of Common Sense

Banning short sales? What next? I especially like this excerpt

Cox and the SEC are taking away profit — and creating new problems. First among those, is this any kind of a list that a bank wants to be on? Even if it does, the new rules unfairly protect a limited number of financial firms and leave others — Washington Mutual Inc. and Wachovia Corp. , to name a couple — exposed. “This naked short selling has been a pervasive problem for a number of years,” said Jane Storero, a partner and securities attorney at Blank Rome. The move to curb naked shorts for a limited group of firms “raises the question [of whether the move is] going to protect them or hurt them? Or is it going to hurt the next tier of banks?”

Here are the securities identified in the Commission’s order:

BNP Paribas Securities Corp. BNPQF or BNPQY
Bank of America Corporation BAC
Barclays PLC BCS
Citigroup Inc. C
Credit Suisse Group CS
Daiwa Securities Group Inc. DSECY
Deutsche Bank Group AG DB
Allianz SE AZ
Goldman, Sachs Group Inc GS
Royal Bank ADS RBS
HSBC Holdings PLC ADS HBC and HSI
J. P. Morgan Chase & Co. JPM
Lehman Brothers Holdings Inc. LEH
Merrill Lynch & Co., Inc. MER
Mizuho Financial Group, Inc. MFG
Morgan Stanley MS
UBS AG UBS
Freddie Mac FRE
Fannie Mae FNM

People wonder sometimes why trend traders have drawdowns? Well, this is a great example. When the rules of the game are changed midstream by a government seeking to protect some one group for squishy reasons, trends can change.

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