You don't have to be a stock market guru to understand the simplicity of the US Government's compromised position here. Banning short selling is simply un-American. This reality is finally finding its way into a much broader forum of public discussion. This is a very good thing for what we need to get back – free market capitalism.
Having not understood what he was doing when he was talked into doing it by the self interested powers that be of ‘Investment Banking Inc’, there is no way that Chris Cox at the SEC is proactively prepared for the tsunami of rational thought and pushback that he is about to endure. It will hopefully cost him his job.
In order to save you some time, here are the 3 most impactful excerpts from Ghate’s discussion:
- “let’s ask what the critics consider a “correct” price? Clearly it’s not the price which obtains when all market participants are free to engage in trade based on their best judgment, because this is precisely the free-market price--a price which they so vociferously condemn. But if “too low” and “too high” aren’t judged relative to the free market, what is the standard? Stripped of euphemism: their wishes.”
- “attempting to set prices by wishing doesn’t--and can’t--work, not for Lenin, Stalin or Brezhnev; or for Paulson, Bernanke and Bush. If prices are to reflect reality, they must be the result of an objective process of discovery and judgment performed by interested actors.”
- “Speculators and short-sellers don’t create facts, they seek to identify and respond to them; and in the process they help adjust prices to economic conditions and establish smooth and liquid markets. As a result--instead of being scapegoated and banished--they should be respected and welcomed for the productive role they play in our markets.”