Aw, poor short-seller babies who wanted to profit by taking down companies. Short selling as a reflection of the market is one thing but I agree with the Fed's assessment that these days, hedge funds don't just react, they set the pace and can kill off companies. Hedge funds are pretty much legitimized highway robbery but as long as a handful are making money then I guess the other investors who care about long term growth have to suffer. I've sold positions short in the past with some success but nothing on the scale of the hedgers. I'm glad the Fed put on the brakes before the car got entirely out of control.

The action against the short sellers shows a misunderstanding of what the market is.   What makes a company fold is lack of cash flow, not stock price.  Keeping the stock price artificially inflated isn't going to automatically fix cash flow although it may cause lenders to become deceived about the strength of a company and make more bad loans.   Stock prices have an often dubious connection with the true value of a company and short sellers are needed to ensure that the valuation is correct.   Banning short sales mainly protects investors in the stock that have taken out irresponsible positions.   It doesn't really protect the company that has issued the stock.  The stock market has fallen a lot but it is still in a grossly inflated bubble and there isn't anything obviously criminal about having a stock valued correctly.  This is just about protecting insiders, giving them time to get out of the market at inflated prices [I see banning short sales as analogous to insider trading if not worse] and delaying the inevitable crash until after the election to protect the political incumbents.  Prolonging the bubble further will probably cause long term losses.  When it does come down, SOMEBODY will suffer those losses.  Why prefer the group that would suffer those losses today over the group that will suffer those losses in a couple of months?  What redress will the second group get?   I'm hoping that it is the banning of short sales which will be later investigated as criminal interference in the markets.   That is certainly how I view it.

Is this mess not the result of what the main repulicans preach. Less government, which means less control, which opens pandora's box to the thieves??????????

It will not matter, stock prices will plung anyway.  Banning short selling just gives the executives time to sell their options before the stocks tank.  If a company is broke, it's stock value will eventually drop - and their is no way the fed will be able to stop it. If you have any of these stocks, get out while you can!

--Curt

http://www.PennyJobs.com

Banning the short selling on 799 Financial stocks is TOO LITTLE-TOO LATE!!!!!

ALL STOCKS should be banned from short selling. And RESTORE THE UPTICK RULE IMMEDIATELY!!!!!!!!! To restore CONFIDENCE in America.

The marketplace is supposed to be a place to invest money in companies, not a Gambling Casino. Regulation is paramount to all members of society or Greed and Fraud  become commonplace. All things in life are based on a SOCIAL CONTRACT and when that CONTRACT is VIOLATED, there is NO TRUST, NO CONFIDENCE, and No REASON -THERE IS ABSOLUTE CHAOS!!

Short selling without prior ownership of a stock is Phantom Selling. It is totally irrational and allows all sorts of additional lies and rumors to bring down perfectly good companies. The worst trickery of all is having my LONG shares in a company invaded without my knowledge and consent so some Hedge Fund can short that stock and make millions for the wealthy. Restore America's SOCIAL CONTRACT and get rid of the SHORT SELLERS on ALL STOCKS NOW.

Ok - I'll buy a $5 million house, fire myself from my own business, go default on the loan, the feds will back me up and in 10 years I sell the house and keep the money.  Only in Liberal America can this happen.  HELP!!!!!

I'm glad to see judgement day has finally arrived for the "financial engineers" aka MBAs!  GO back to school and study again.

normal buying and selling determines stock value just as well any asset - supply and demand. Shorting does not improve the valuation any better than other market forces. Additionally if the hedge funds were regulated and forced to play by the same rules as all other players in the market, there would be no issue. Its like paying football where each team uses different rules. Everyone plays by the same rules, or get off the field..

Barry

short selling is not based on fundementals of a company. It feeds off negative comments and anaysts who have vestid interests in bringing down the prices of stocks. The short seller is akin to a parlaying better who trys to make a little gain by stacking bets. Obviously they don't care if every company goes out of buisness as long as the can play their little game of puts and calls. Now they are the little guys that swim along side of the whales(hedge funds) and feed of the plankton generated by these large  greedy denizens.

  to kim peterson, "when exactly was it that the paying field was level?'                

How about going back to the Pre-Raygun regulations and laws we had on the books due to past thuggery?

Undoing the jake the fake Republicans "deregulation scheme" would do wonders to return to morals in financials.

These laws and regulations were put in place after thugs stole money.  A simple look at the results of Republican Deregulation of any industry shows, claerly the causes of todays scandal and looting of the treasury.

The only reason all this has come to pass is to finally destroy all social programs by starving our nation of funds.

Treason is much too kind a word for the Republican raping of the US!