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Post by agito on Sept 19, 2008 20:49:58 GMT -6
ok- next question, what is the downside of banning shorts? even though they were only banned on financials, the whole stock market went up (as "short sellers had to cover their position"). So what's the downside here? price discovery for the financials will be more difficult, so does that translate into slower growth for them as people jsut stay away from investing in them? is that a good thing or bad thing if so?
anyone have links i will show karma for em....
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Post by judes on Sept 20, 2008 10:13:45 GMT -6
I can't really answer your question, as I think shorting is kind of a balance to the lies that get told to prop a stock up. I think it is needed in this "free market" system to keep companies in check in a way. But what I can't understand is how, if a company is really sound financially and healthy, can the value of it's stock effect the value of it's real business. Aren't the two supposed to be independent of each other? It just tells you how big the ponzi scheme on wall street really is, if companies are folding because they are only being propped up by their stock price. That is the real problem. So in that instance shorting is good because it helps expose the scam, imo.
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