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Regulators seek global approach to short selling

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posted on Mar, 23 2009 @ 09:31 AM
I saw this piece and wanted to share with those who are tuned into the market and market activity.

While I have heard that stricter regulation is needed to try and prevent what is occurring now, how are these economic leaders going to come up with the correct formula to stabilize the market without putting too many restrictions.

A very tough problem, the goal is to regain the faith of investors, thus bringing them back into the market.


LONDON (Reuters) - Short-selling should be regulated as some practices may create disorderly markets during extreme financial turmoil, a global body of supervisors said on Monday.

Short-selling has been blamed by critics for exacerbating the slide in bank shares during the credit crunch.

And the International Organization of Securities Commissions (IOSCO) policymakers, who have put forward recommendations to deal with the issue, have pointed to hedge funds as they often use the tactic.

A hunch that I have had, it may be farfetched but I was thinking that the explosion of online, day trading etc, has created a little of the instability which we have seen in the recent year.

Especially evident with the oil prices last year which, if I remeber correctly were highly influenced by some well capitalized online traders in a Middle eastern oil producing country, (can't recall which one).

While I am all for freetrade, it seems that online trading could possibly be a weak spot in market stability.

Take it with a grain of salt, it is just a theory

posted on Mar, 26 2009 @ 10:18 AM
Another thought is the current bans on short selling are creating a false sense of stability in the current markets. If short selling is a function of a healthy and stable atmosphere for investors, when will this trader option be allowed to once again be a tool in the traders toolbox.

Should the short sell be eliminated? I guess it is a very complex problem for those who are trying to come to a consensus on how much regulation will be needed to ensure that short selling doesn't have the impact on the global market.

One thing for sure, the free trade market looks like a thing of the past I expect it to be under extensive regulation in the near future.

I am also confident that the market will bounce back, but that will be delayed as long as global governments continue to try to artificially boost investor confidence.

Go back to governing, and stay out of the investment business, your (US Govt), track record dealing with money is not a confidence builder at a time that confidence is key to the return of investor monies.

IMO. Once again take with a grain of salt

Here's another piece concerning the short sell:

Regulators ponder where next for short selling

Japan, Hong Kong and Korea review stance as IOSCO calls for consistency

Japan is to extend restrictions on short selling until July as the International Organization of Securities Commissions (IOSCO) calls for a more standardized and consistent approach to short selling around the world.


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