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Friday, September 19, 2008

Banning All Short Selling? An Investor Calls that Just Plain Stupid ...

"The truth is not for all men, but only for those who seek it." - Ayn Rand

Ok. I'm posting this, while the thoughts, outrage and sheer shock are still fresh in my mind. And yes. Even the fear. Because this is beyond anything I could have expected. I want to share something with you, that I just read:

"The U.S. Securities and Exchange Commission intends to temporarily ban short-selling, The Wall Street Journal reported Thursday night. It's unclear if the commission has approved the move, the Journal reported. SEC Chairman Christopher Cox, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were briefing congressional leaders Thursday night. The U.S. move would follow a similar action by U.K. regulators on Thursday"

I'm a political neutral. I do not wish to sound as if I am "for", or "against" any political party. I'm not. I am a Biblical Christian. But to be honest? The politicians on both sides are absolutely scaring me to death. One of them is calling it "corruption", when there has been absolutely no evidence of corruption. It's not about "corruption". It was about absolutely stupid mistakes. This was caused by over-leveraging. But corruption? Not at all. And the other is suggesting ideas that have been tried again and again and again and again; and failed each time they were attempted. That's just my emotional reaction. Not a political one. I am not betraying my politically neutral beliefs or principles. It's just an emotional reaction. They are absolutely frightening.

So believe me when I say that I have no political bias as I say the following: The decision to ban all short selling of any kind demonstrates incompetence and misunderstanding of basic economic principles at the highest level. This is the sort of maneuvers that got us into this problem in the first place. Addressing the effect, rather than the cause.

Now? Banning short selling? After our first few days of 'drug-like induced rally mania'? The first bit of bad news to hit? Then? Then we're in real trouble ... (Video included)

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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