Mark Manning
Unless you're living in a cave somewhere, you know we have just seen one of the most historical events that investors will ever experience.
Readers know that I try to cut through all of the noise and provide bottom-line facts. Today I am going to break away from that slightly and give you my thoughts of what just happened. To begin, the government's intervention is just plain market manipulation, because you can't just step in and change the rules overnight in order to determine what the market intends to do. You also can't simply move the problems of these financial institutions somewhere else and act as if they don't exist. The ban on short sellers in the financials is something that will likely turn out to be very problematic. My question is what if this doesn't work with the financials? Is the government then going to step in and eliminate shorting across the entire market? I would like to see the uptick rule reinstated, but eliminating shorting altogether is preposterous. Short sellers provide valuable liquidity to the financial markets, and barring the natural process is messing with something I think regulators don't fully understand. Many investors want to know if this is something that could completely turn this market around and end the bear market. Major events such as this have had that effect in the past, but the key now is to watch for follow-through next week. I'm not convinced this rally will last, because nothing has changed the earnings and derivatives problem in the market.
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