[emdium]

I'm new to trading and investing so I'm trying to reserve some disbelief before more input. I know enough to realize that the current crisis in the financial sector is not normal, but is this normal? Seems like the riot police have shown up.

Sorry I didn't take time to look up the article, but the video sums it up well.

[Simit Patel]

cool video, thanks for sharing. i am a fan of the rule because i think naked short selling (short selling when you haven't borrowed the stock you are looking to short) is a problem. but the way the rule is being applied selectively to certain market participants and certain stocks does not seem to be fair, in my opinion.

this is one of many reasons why i don't favor the stock market -- i like the forex market more, because to me it has fewer restrictions that hinder the natural flow of the market.

[David Waring]

Hey Emdium,

Good video thanks. I would say that this is not normal in the sense that the regulators don't normally implement rules which, as Simon has pointed out, seem to be specifically targeted at helping out specific stocks.

I would say this is normal however in that whenever anything goes wrong, the regulators look for scapegoats (in this case speculators who are selling stocks short) rather than placing the blame where it belongs (with the management of the companies who caused this mess).

Best Regards,
Dave

[emdium]

Originally Posted by David Waring

Hey Emdium,

I would say this is normal however in that whenever anything goes wrong, the regulators look for scapegoats (in this case speculators who are selling stocks short) rather than placing the blame where it belongs (with the management of the companies who caused this mess).

Best Regards,
Dave

This isn't the first time recently I've heard "speculators" and "scapegoats" used in conjunction. It seems trendy. However, are there any long term prejudices toward speculators that my lead to more permanent restrictions that may not be limited to just a specific sector? I'm not jumping to a full blown witch hunt, but group think carries a lot of momentum.

(don't click the link if you don't want to waste your time)


MDM

[David Waring]

Hey MDM,

Glad to hear from you.

The places where there is the most saber rattling towards speculators are going to be anywhere an argument can be made that the "common man" is hurt by what people consider excessive speculation.

Right now, the two biggest places where the argument is being made that this is the case are commodities and the financials, where people feel that excess speculation has lead to people having to pay increased prices for basic necessities such as fuel for their cars and that the financial system is being put at risk because of short sellers of the financials.

In the future it will be some other financial instruments but the story will most likely remain the same. The question that I would ask is that if short sellers start to enter the market in mass and drive the price of oil below what many consider to be the true "fundamental value" of oil, how quickly will the saber rattling against speculators go away in that market? Pretty quickly I would bet.

Best Regards,
Dave