by TonyLiberty

The SEC banned short sales on ~1,000 financial stocks on September nineteenth, 2008.

The SEC’s ban on short selling was intended to stop investors from driving down the costs of monetary stocks by shorting them.

But, the S&P 500 index fell ~50% to its lowest point within the months following the ban.

Regulatory actions, like a short-selling ban, can have unintended consequences and should not at all times be effective in stabilizing markets during turbulent times.

The ban didn’t address the underlying problems that were causing the financial crisis. These problems included subprime lending, over-leveraged banks, and a scarcity of transparency within the financial markets.

The SEC’s ban on short selling is a reminder that government intervention will not be at all times one of the best solution to financial problems.

US to Ban Short-Selling, JP Morgan Says. JP Morgan analysts predicted that short sellers is likely to be temporarily banned. American bankers have written to the SEC about their concerns. Short sellers have revamped $1 billlion from betting against these struggling banks.

Bankers Want an Emergency Ban on Short Selling

per Fed Reserve, 722 banks have unrealized losses exceeding 50% of it’s capital

SVB and First Republic failures are only the beginning of a lengthy banking crisis — should you imagine 800 years of history

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