Excellent News From The Ministry Of Price Control!

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At least if the Wall Street Journal is to be believed, the short sale ban will be extended for at least a week or two after the original October 2nd sunset date. Doubtless the incredible success of the plan (see attached chart after the jump), put into place on September 19th, and its immense popularity with market participants are the central influences spurring its renewal. Said the SEC at the time:

Under normal market conditions, short selling contributes to price efficiency and adds liquidity to the markets. At present, it appears that unbridled short selling is contributing to the recent, sudden price declines in the securities of financial institutions unrelated to true price valuation. Financial institutions are particularly vulnerable to this crisis of confidence and panic selling because they depend on the confidence of their trading counterparties in the conduct of their core business.

As we pointed out earlier today, Taiwan got in on the act and banned short selling outright. I don't know about the rest of you, but I am really enjoying my new found equilibrium based on the "true price valuation" of high leveraged financial institutions that feel no downward price pressure except that of their own bloated balance sheets.
Don't Blame Short Selling [Wall Street Journal]
Related: DealBreaker Swag

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