tired fools

the British regulatory authority, the FSA, has banned short selling of financial stocks. This is also banned in the US, where there are current investigations into possible improper short selling. Optimism is high that this could be the beginning of the end of the crisis. Except that it won’t be. Perhaps it’s the end of the beginning. If memory serves me correctly the US banned short-selling of financial stocks in 1928. Interestingly it also let a bank go to the wall a la Bear Sterns, only then it was the Bank of the United States. Auger well?

short selling is not responsible for the crash. in Britain the late difficulties with HBOS, now rescued by a merger with Lloyds TSB, saw under 3% of it’s stock shorted. A small fraction of the massive selling. This is just another example of a scapegoat, like CEO bonuses and flashy cars.

Banks are still tumbling. A coupe of days ago I heard rumours about Morgan Stanley and Allianz. The first is in negotiations for a merger, no stories about the latter. Even Macquarie in Australia is off 30% on the day. And this is just the financial sector. The credit issues haven’t yet hit home to ordinary consumers. When it does expect the rest of the index to get its share of a hammering. Sell, sell, sell.