Spiga

What is fair, what does it matter

A tidbit from last weeks news:

Yet last week, regulators gave a nice boost to Wall Street and other members of
the financial club. Christopher
Cox
, the chairman of the Securities and Exchange Commission, devised an
emergency rule change for traders wishing to sell short the shares of 19
financial companies, including Lehman
Brothers
, Merrill
Lynch
, Fannie Mae, Bank
of America
and Citigroup.
The rule states that if you haven’t borrowed the shares you intend to sell
short, you can’t make the trade. It extends until July 29.
There are several
interesting aspects to this change. First, if the S.E.C. believes that shorting
without previously borrowing shares is a problem in the market, why not apply
the rule to all stocks? After seeing many of the 19 companies’ stocks shoot
higher after the plan was announced, executives at General
Electric
, the American
International Group
and MBIA, companies whose shares have also been pummeled
in the financial crisis, must surely feel left out of the fun.


“The banks are too big to fail and the man in the street is too small to bail,” said John C. Bogle, the founder of the Vanguard Group, the mutual funds giant, who is a philosopher of finance.

Such is life...

Type rest of the post here

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