Is short selling the blame for this crisis?
will banning it actually work? there are so many workarounds if one really wants to short.
Answers
216 points
jrj90620 answered 2 years ago …
Probably making it worse in the short term but not the cause of the long term U.S. decline which began,in my opinion,around 1970.
Read more from jrj90620
546 points
warren answered 2 years ago …
Derivatives are the problem. Tthe rest stem from that inlcuding naked short selling. There is no saving the system. EVERY single empire has devalued their dollars everntually...then they have failed and ceased to be an empire. That is what is happeninig. Gold and silver will once again be used as a ratio to dollars in circulation.
I have been warnining of this for a long time and said that derivative were and are the problem. Precious metals will be the benefactor to this.
Warren,
www.preciousmetalstockreview.com
4087 points
EthanR answered 2 years ago …
One can still short a sector by buying an ETF, such as SKF, which double shorts financial stocks. But banning shorts on individual stocks was definitely a way to stabilize the market right now. It remains to be seen what will happen on the day the ban is lifted.
Read more from EthanR
4107 points
MNSL answered 2 years ago …
I think if policy makers ban derivatives including some hedging instruments and sophisticated short selling many industries will benefit continuously and we can avoid problems such as higher inflated asset prices, credit bubble, commodity bubble, housing bubble etc.
Demand and supply theory will work properly. Industries will prosper and we will have less unemployment. There will be demand for products and services continuously. Today you cannot find demand for some assets and you cannot do sales as you wish. Because of higher cost, many industries are at stake now. Unemployment is rising together with higher inflation.
Always sophisticated instrument will only benefit few who can manipulate and with prior knowledge. Those who know little will always lose. That is what happened to some airlines, industries and countries who hedged oil recently. They really lost the opportunity to make use of current lower oil prices.
Now taxpayers, poor savors, mum and dud investors are paying for other peoples mistake.
Even retirement schemes are in danger and people cannot trust these insurance giants and top banks now.
411 points
jester112358 answered 2 years ago …
No, its people living beyond their means by taking on too much debt. Everything else follows from that reality. Until housing prices revert to their historic trendline (which would be about 150k$ instead of the current average price of 200k$) nothing can prevent the contraction-not even the government and its very silly no short selling rule.
Read more from jester112358
