The SEC just announced that shorting of stocks is temporarily suspended. For those of you who have no idea what this means, you simply cannot sell stocks in the hopes that they go down anymore. This market mechanism practice of selling securities the seller does not own, in the hope of repurchasing them later at a lower price, needed to be banned a long time ago.
And tonight, Congressional leaders and the Treasury Secretary, as well as the Chairmans of the Federal Reserve and the SEC are all meeting into the wee hours to come up with a bailout plan that is designed to be more comprehensive than the band aid approach displayed recently by the AIG buyout.
When the Government invested in solving the S&L crisis in the recent past, the people actually made money, based on the net gains some years later. And this one is sure to follow the same path. In the end, the taxpayers whose money is being used to instill confidence and stability in the markets will profit in the long run.
But here's the danger . . .
The current crisis involving financial institutions cannot really be measured in terms of any leveraging of the illiquidity. There are no tangible assets, so to speak, on this one. The cash standard may backfire on those who hold it too long.
And in the past, the banks and financial institutions, as well as the corporate giants, had a say in how the Government acted, based on their self-interest. But the tide has turned. The Government will now dictate how the banks should behave. While this sounds like a great win for the people, it might be a way for the Government to rid the banks off its back to accomplish its higher calling, only to be followed by not sharing the spoils with the public. Hence, the powerful police state that I've been trying to warn everyone about for the past few years. Welcome to the New World Order and the Totalitarian Society of Lucifer's Network.
If you think the banks were too powerful and greedy, and did not at all have you in mind, wait until the Government realizes it doesn't have to be of the people, by the people, and for the people any longer.
