Our federal government rode to the rescue recently to protect us from those nasty short sellers who were driving prices down. So far, so noble, right?
Except the government banned a specific type of short selling called naked shorting, which was already against the rules. I guess they’d must have forgotten to enforce the rules previously or something. Oh, the rule only applies to certain financial companies. The Fed apparently wants to save our poor, put-upon investment banks and the like. Pass me a hanky.
Except the rule is meaningless. Any trader can still easily short the stocks using puts, regular shorting, or single stock futures.
However, the rule has had the desired effect. Financials are going up. Which amounts to free money for traders, knowing the government will be doing whatever it can to prop up stock prices of ailing financials.
And here you thought all those conservatives really were capitalists who believed the government should leave business alone and let the weak fail.
Only when the weak aren’t their companies, apparently.