The silence coming from the SEC is deafening. No matter what their stance on the short selling rules and the effect they are having on the current market declines, one would think that there would be at least some commentary coming from the SEC. Since they let the temporary ban on naked short selling expire on August 12th (which just happened to coincide with the peak in the rally off the July lows when the temporary ban was put in place), we haven't heard boo from the SEC. Are they on vacation or just shell-shocked?
Out of Office AutoReply:
We will be out of the office indefinitely beginning August 12th. During this period, we will have no access to phone or email. If this is an emergency, please leave a voice mail.
Update:
The SEC has gone back to work.
The short selling hedge funds are employing the strategy of pushing out of business financial companies. Cox (by allowing naked short selling and removing an uptick rule) and Paulson (by making sure that the shareholders do not get anything at the end) are only helping the bears.
The hedge funds are exploiting distressed credit markets to bankrupt our financial system.
Attack a financial company with heavy naked shorting and create a panic => credit spreads widen => boneheads from the credit agencies issue immediate credit downgrades => these rating downgrades force a company to immediately (no time to sell assets) increase collateral => a company cannot borrows because the credit markets are frozen => more short selling and forcing a company into bankruptcy => Paulson comes out and makes sure that the shorts are rewarded and the shareholders are wiped-out
This chain reaction must be broken.
Where is Cox?
Posted by: Where is Cox? | September 17, 2008 at 11:58 AM