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Opening Bell: 9.19.08

Stocks Soar Worldwide on Bank Bailout, Curb on Short Sales (Bloomberg)
The great thing about the government is that as long as they can maintain law and order, they've never really fired the last barrel of the gun. Stocks rallied overseas on all the news: A stepped up attempt to clean up the mess and a new, hostile attitude towards short selling. The Europe Dow Jones Stoxx Index added 6.4 percent. And the Russian market rallied 16 percent. But probably not having anything to do with short sellers, rather Medveded promised to put up $20 billion (of his own money? no) to prop up stocks. Meanwhile, per CNBC in front of us, US futures are going buckwild on the news. but it's just so weird to hear American business reporters, talking about the SEC, using "ban" and "short sale" in the same sentence.
Details on the SEC's New No-Shorting Rule (Paul Kedrosky)
How hastily was the SEC new rule drawn up? Get this... among the 779 stocks that will, from now on, trade outside of a free market, one of them is "MBP", Metabolic Pharmaceuticals. Paul surmises the SEC probably meant MPB Mid Penn Bancorp. But then again, who'd think to short Mid Penn Bancorp. In case you were wondering, Lehman is also on the list.
Rumor: Government to Buy Bad Mortgage Securities (EconLog)
A concise, biting explanation of the RTC from Arnold Kling.
Oil rises above $98 a barrel in Asia (AP)
That's the one problem with this "rally". Oil is up too, and though the headline here says $98, it looks like it may have recrossed into triple digits territory. Good thing summer driving season is long over.
Bill Moves Forward To Re-Legalize Online Poker (Techdirt)
Barney Frank isn't necessarily the most popular guy in financial circles (though he is intelligent and informed), but we still like him. Why? Because he's a big defender of gambling (online and physical). One of the best cases for online gambling we've ever heard was this lecture he gave at the free market CATO institute. Anyway, knowing this, we're not surprised to see him introduce legislation that would legalize online gambling (with a few exceptions and some regulations, sadly). Also, it's sad that it'll probably go nowhere. Why would Bush sign this, but for the fact that he's not a big veto fan?

Notional vs net: complexity is our enemy (Information Processing)
We've sort of been wondering whether the argument that the financial system is so complex isn't a bit of a tale told by interested parties in hopes of coaxing government money, aid, or at least sympathy. Is it possible that the sorting out process wouldn't be like a game of pick up sticks with 1 trillion sticks lying on the ground? Anyway, this post doesn't make our argument -- it argues that indeed complexity and the problems of complexity are quite real, and makes a good case for why (with visuals).
Coke Dealer's Gas Surcharge (The Smoking Gun)
A pretty cool, and telling catch here... apparently a coke dealer in Indiana started adding a $25 surcharge to deal with rising gas prices. Makes sense, but it's always funny to see something like a gas surcharge -- typically associated with obnoxious corporatism -- makes its way into the "real" world.
Moody's lifts projections for mortgage losses (FT)
Just to throw a wet blanket on your happy "no shorting, every stock soaring" day. Moody's has raised its estimates for losses on mortgage-backed securities, which, as the article notes, could result in downgrades for bond insurers. Now this is funny -- lost in all of this to us was the fact that companies like Ambac and MBIA were still around. We noticed that yesterday, but really, we had assumed that they were bankrupt or something, but alas no.
Banning Terrorism (Felix Salmon)
Another sharp critique of the short ban: "If you want to bet that a certain stock is going to fall, there are lots of ways to do that (like, say, buying put options), and the Law of One Price will take care of everything else."
Vegas police talked of 'getting' O.J. on recording (AP)
We're pretty annoyed that all this craziness of late has depressed coverage of the OJ trial. We had no idea where it was, though we had some idea that it was going on. Anyway, apparently on some tape, a police department employee "but not a sworn officer" was heard saying something about how now they're going to "git" OJ, or something like that. He's gonna walk.