Dropping My Shorts


Today, the Securities and Exchange Commission, according to CNN, “bans short selling of financial stocks on U.S. markets to “strengthen investor confidence.”
Others may understand the ramifications of this better than I do, but I’ve done pretty well lately shorting financial sector stocks that I felt were going to collapse given what we saw unfolding in the subprime crisis. Short positions on stocks are ways to manage risk. I don’t see how ending a long-term practice that is not part of the complex, synthetic derivatives market that is generating problems restores market confidence in the long run.
— Steve Clemons


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