Once again, they are banning the naked short selling (without actually finding the borrowable shares), not the regular short selling, right?
http://www.bloomberg...id=ao6BsFTFFiKc
Naked short selling in the derivative market is one thing, but when it comes to stocks is it not an entirely different matter? Basically you if you plan to short, you better deliver the goods in case you are wrong - is this not the gist of banning naked CDSs? I am trying to ask, how is this any different than what the US markets did in 2008? Frankly, I find short banning in the midst of a crisis a pathetic reaction from the standpoint of gov't.
Naked short selling of securities has been illegal for quite some time in the US. What the gov did in 2008 was ban short selling of financial securities. My understanding here is that naked short selling of a handful of German securities will be banned. To me that means you could still sell them short provided you can borrow the securities.
They also banned naked short selling of credit default swaps of government bonds in Europe. To me this means they are banning the purchase of insurance on bonds they don't own.
IT