The Mother of All Short Squeezes

HenryTo · Posted: Fri Sep 19, 2008 6:43 am Post subject: The Mother of All Short Squeezes

SEC temporarily bans short-selling on 799 financial stocks. Hedge funds (perhaps Goldman and Morgan Stanley as well) that are opportunistic or are in cash will no doubt jump on this and initiate the "mother of all short squeezes."
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SEC bans short-selling for financials
Friday September 19, 7:07 am ET
By David Goldman, CNNMoney.com staff writer

The U.S. Securities and Exchange Commission took what it called "emergency action" on Friday and temporarily banned investors from short-selling 799 financial companies.

The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.

Short sellers borrow stock with the aim of selling it, then buy it back at a lower price, hoping to pocket the difference. The commission said short sellers add liquidity to the markets during normal conditions, but recent unbridled short selling has contributed to the recent tailspin in the stock market.

"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," said SEC Chairman Christopher Cox in a statement. "The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets."

Cox said the action "would not be necessary in a well-functioning market," and is just one of many actions being taken by the government to jump-start the embattled financial markets.

The SEC also said it would temporarily ease restrictions on companies' ability to repurchase their stock, and force money managers to report their short positions in certain stocks that are not included in the 799 banned companies.

Some market observers, including top bank executives, have also blamed short sellers for the punishing declines in bank stock prices over the past few days. Critics of short sellers have argued that some had been spreading rumors about a company while "shorting" the stock in order to drive the price lower.

The ruling comes after the SEC decided Wednesday to ban the practice of so-called "naked" short-selling, in which investors short the stock without actually borrowing it.

On Thursday, Britain's Financial Services Authority also temporarily banned short-selling for financial companies. The SEC said it is consulting the FSA in the matter.

HenryTo · Posted: Wed May 23, 2012 9:43 pm Post subject:

Short selling in Hong Kong hits 13-year high. Could be a contrarian indicator.

http://www.bloomberg.com/news/2012-05-24/hong-kong-short-selling-of-stocks-surges-to-13-year-high.html

rffrydr · Posted: Thu Nov 10, 2011 7:12 pm Post subject:

12% short interest in chinese property stocks:

http://www.bloomberg.com/news/2011-11-10/china-property-shares-seen-biggest-gainers-even-as-shorts-reach-2008-high.html
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rffrydr · Posted: Thu Oct 27, 2011 7:45 am Post subject:

We don't need no stinkin' short-squeeze. I'll take the bonus squeeze:

[img]http://www.naaim.org/controls/surveyimage.aspx[/img]

10 out of 10 years market bull late OCT to Santee Clauze.
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Fri Oct 21, 2011 10:28 am Post subject:

Just kickin' into gear:

http://ftalphaville.ft.com/blog/2011/10/20/706781/whos-not-worrying-about-their-shorts/

Of course when they figure out the summer GDP lookback was sabotaged by its "deflator" they won't call it short-covering anymore--righteousness.
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rffrydr · Posted: Wed Oct 12, 2011 7:25 am Post subject:

It's in the stocks but it's piled on in the indices....after the European short bans.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Mon Oct 10, 2011 1:08 am Post subject:

Finally "the mother of all short squeezes?"

http://www.bloomberg.com/news/2011-10-10/short-selling-rising-most-since-2006-as-11-trillion-is-erased-from-stocks.html

rffrydr · Posted: Fri Aug 12, 2011 6:51 am Post subject:

Judged "meh" of all squeezes:

hort-Selling Bans around the World:
Evidence from the 2007-09 Crisis
Alessandro Beber
University of Amsterdam and CEPR
Marco Pagano
Università di Napoli Federico II, CSEF, EIEF and CEPR
First draft: May 2009. This version: January 2010
Abstract
NH
Most stock exchange regulators around the world reacted to the 2007-2009 crisis by
imposing bans or regulatory constraints on short-selling. Short-selling restrictions were
imposed and lifted at different dates in different countries, often applied to different sets of
stocks and featured different degrees of stringency. We exploit this considerable variation
in short-sales regimes to identify their effects with panel data techniques, and find that bans
(i) were detrimental for liquidity, especially for stocks with small market capitalization,
high volatility and no listed options; (ii) slowed down price discovery, especially in bear
market phases, and (iii) failed to support stock prices, except possibly for U.S. financial
stocks.
NH
http://www.dataexplorers.com/sites/default/files/Short%20Selling%20Bans%20around%20the%20world%20and%20their%20impact.pdf?utm_source=Data+Explorers+Securities+Finance+Report&utm_campaign=96dd987267-USA_Daily_News_12_August_20118_11_2011&utm_medium=email

When markets are spazing they need a "time out." Period.
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Today is the Tomorrow you worried about Yesterday!

gregf · Posted: Thu Oct 02, 2008 9:00 pm Post subject:

rffrydr · Posted: Thu Oct 02, 2008 11:24 am Post subject:

SEC allows Hedge Funds to report short positions privately in extension of ban:

http://biz.yahoo.com/ap/081002/sec_short_selling.html
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nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Didn't GE have a large finance arm?

I wonder if CNBC's constant who-, er, pim-, er ... um ... "support" of the bailout plan had anything to do with their parent company's position in the capital markets and its need of cash?
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

gregf · Posted: Thu Oct 02, 2008 10:16 am Post subject:

I would guess that they have a large commercial finance arm.

diesel · Posted: Wed Oct 01, 2008 3:08 am Post subject:

An interesting statistic...

20% of sp500 stocks (by volume) are restricted for short sale.

BTW, anyone know the logic in restricting short sales of IBM?
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All cats are gray in the dark.

rffrydr · Posted: Tue Sep 30, 2008 1:18 pm Post subject:

What they actually did:

http://www.proshares.com/AnnouncementonSKFandSEF.html
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Today is the Tomorrow you worried about Yesterday!

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Download the complete daily holdings for all of the ProShares ETFs.

http://www.proshares.com/includes/pfdlyhld.csv

Should explain most of it.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

Suomodo · Posted: Fri Sep 19, 2008 4:23 pm Post subject:

http://biz.yahoo.com/ap/080919/sec_short_selling.html