Today's market just felt completely artificial. Citigroup opening at $22? So basically people could gap the stocks to ridiculous prices and force the shorts to cover into them so they can get out. What a joke. I strongly disagree with this move and think they're just trying to place the blame without actually dealing with the situation, like that pension fund moron that went on CNBC and blamed the shorts. This is America after all, where parents ban a kid from playing little league because he's too good.
These artificially high prices don't mean anything. It doesn't "instill confidence" back into the markets. Who's going to suddenly want Citigroup at 22 thinking it's going to 40 because of this? All this will do is hinder the flow of trading. They might as well have just closed the markets for 2 weeks if the move is to serve as a "timeout" so the markets can take a breather and whatever plans have been initiated so far can get rolling. At least that way I can take a vacation.
Now, I believe in the ability to short whatever and whenever you want as long as you follow protocol and locate and borrow the stock. But I propose a middle ground that might be better than this no shorting at all thing. How about the "upday rule"? Instead of only being able to short on an uptick (like the old "uptick rule"), you can only short if the stock is up on the day from the previous close. That way, when a financial stock gets beaten down, you can't pile on. Sure there might be short sellers trying to prevent bounces, but you won't have short sellers driving a stock to 0 (this is what they claim is going on after all). And there's no real way of manipulation like there is with the uptick rule. Comments anyone?