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Regulatory Panic Spreads As Italy Orders Short Sellers To Disclose Positions

Tyler Durden's picture


The earlier news that Italy's regulator may forbid naked short selling in a desperate attempt to preempt the bond vigilantes from taking down the country's financial system (how shorting stocks prevent evil speculators from selling bonds is somewhat confusing) has been confirmed. But that's just the beginning. The latest twist is that the Consob has also requiring shorts to immediately disclose their short positions "in an effort to increase market transparency." Odd how shorts are never required to be exposed when the markets are surging (or how silver margins have yet to be reduced despite the near 40% price drop in the metal from recent peaks). It gets worse. From Bloomberg: "The European Securities and Markets Authority, which co- ordinates the work of national regulators in the 27-nation EU, should be given emergency powers to temporarily ban short selling or trades in CDS on sovereign debt in the EU, the Parliament said. The Italian regulator said short sellers must disclose their net positions when they reach 0.2 percent or more of a company’s capital and then make additional filings for each additional 0.1 percent."

Full Google translated announcement from the Consob is below (source).

Short sales: shoot from tomorrow the obligation to inform Consob bearish positions

Consob has approved a new regime of transparency regarding short selling.

From tomorrow, investors who hold important positions on bearish equities traded on Italian regulated markets are required to give notice to Consob.

With this, the Italian legislation is in line with that in force in major European countries, primarily Germany The measure strengthens the supervisory powers of Consob in the current market, characterized by a high level of volatility in the fortunes of quotations.

In particular, must be disclosed to Consob on its net short positions in equity securities of listed companies in Italy, when they exceed certain thresholds. The first obligation of communication triggered the achievement of a net short position greater than or equal to 0.2% of the capital of the issuer. Subsequently, the obligation is triggered for any variation equal to or greater than 0.1% of the capital.

The measure takes effect from tomorrow and will remain in force until September 9, 2011. The text of the resolution (number 17862) is available on the Consob website

Pricing obligation to purchase the shares Socotherm (press release dated 1 June 2011)

Consob has set at 0.0683 euro per share consideration for the compulsory purchase, pursuant to art. 108, paragraph 2 of the FCA, the ordinary shares by Socotherm Fineglade Limited.

On the occasion of the capital increase resolved by the issuer's board of directors on June 25, 2010 Fineglade Limited has signed, at a price of 0.0683 euros, 732.45 million new ordinary shares of Socotherm, 95% of the share capital by which has achieved the obligation to purchase the remaining shares Socotherm.

The title The Group is indefinitely suspended from trading since August 4, 2009 in view of the uncertainties on the economic, financial and property of the company, at the time, was found in the situation envisaged by art. 2447 Civil Code (Reduction of share capital below the legal limit).

The pricing was carried out in accordance with the guidelines prior to Resolution No. 17 731 of 5 April 2011 and, in particular, with Article 50 of the Issuers Regulation. In line with previous determinations, such as additional parameter to those expressly mentioned by art. 50, paragraph 3, of the Issuers' Regulations - not usable in the case of the test - was used for the price of the subscription of the capital from which comes the tender offer exceed the threshold, as illustrated in the evaluation document. .

Resolution No. 17807 of 1 June 2011 to determine the amount of the obligation to purchase is published in conjunction with Annex assessment document, the site


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Sun, 07/10/2011 - 17:20 | 1441920 Caviar Emptor
Caviar Emptor's picture

Stock and Bond trading will only be allowed if banksters can win. Any violaters will be shot on sight. Now, don't you wanna buy a little paper from us, little boy? 

Sun, 07/10/2011 - 17:51 | 1441993 tom a taxpayer
tom a taxpayer's picture

Breaking News: At 3:40 PM EST, two C-135 Stratolifters departed Andrews Air Force for Rome, Italy. The giant aircraft are loaded with 1,000 TSA agents on emergency loan to the Italian government. The mission of the TSA agents is to perform full body searches of short sellers to insure full disclosure of short positions in Italian bonds and stocks.

Sun, 07/10/2011 - 18:35 | 1442090 cossack55
cossack55's picture

they will be looking at shorts all right. 

Sun, 07/10/2011 - 18:46 | 1442105 SilverIsKing
SilverIsKing's picture

Perhaps this is the way to find out who will be rich when the market collapses so the politicians know whose dicks to suck.

Sun, 07/10/2011 - 21:49 | 1442413 Thomas
Thomas's picture

It will be easy because they are already naked. BTW (and more seriously) the article does not seem to clearly distinguish short selling from naked short selling. Huge difference since the latter is already illegal.

Sun, 07/10/2011 - 23:12 | 1442542 hbjork1
hbjork1's picture

Right!  But it requires work by the regulators to put a hold on the large naked positions.  Illegal naked short selling of low priced issues was the game early in the last decade but it a change in command at the SEC was necessary before it was finally enforced.  It took about ayear before the naked issues the SEC [program was fully sucessful 


Mon, 07/11/2011 - 00:11 | 1442644 aminorex
aminorex's picture

Naked short selling is only illegal if you lack a market making desk.  Investment banks can naked short all day.  If the prop desk wants to short without capital, he can just ring his buddy and scratch another line on the monitor bezel.


Mon, 07/11/2011 - 05:49 | 1442922 Urban Redneck
Urban Redneck's picture

"Stock and Bond trading will only be allowed if banksters can win."

How are banksters not profiting by taking down Italy, and then profiting again in the future on the backs of the next taxpayer subsidized bailout?

Or does Mrs. Watanabe have a direct line to the institutional debt desks?

Sun, 07/10/2011 - 17:20 | 1441922 freethinker4now
freethinker4now's picture

Gold bitchez

Sun, 07/10/2011 - 17:21 | 1441926 HungrySeagull
HungrySeagull's picture


Here we go! Scrat time!

Sun, 07/10/2011 - 17:21 | 1441927 Top_Kill
Top_Kill's picture

Disclosure...wouldn't it be nice if they implemented this at the CME for silver!

Sun, 07/10/2011 - 17:23 | 1441934 Caviar Emptor
Caviar Emptor's picture

They won't because the banksters would lose (JPM). We can only have deals where they win by executive order. If you are not satisfied please proceed to the office of the Directorate of Secret Police

Sun, 07/10/2011 - 17:23 | 1441929 Cognitive Dissonance
Cognitive Dissonance's picture

I love the smell of panic in the morning.

It sort of smells like soiled diapers Depends©.

Sun, 07/10/2011 - 17:36 | 1441963 cosmictrainwreck
cosmictrainwreck's picture

I think that's a TM, Cog, not a C.....all depends, I guess

Sun, 07/10/2011 - 17:48 | 1441983 Cognitive Dissonance
Cognitive Dissonance's picture


I just checked the pair I'm wearing and it's definitely a 'TM'.

My bad. :>)

Sun, 07/10/2011 - 18:30 | 1442078 SwingForce
SwingForce's picture

Oh, too bad. "The WORLD is My Toilet" -GWAR

Sun, 07/10/2011 - 21:44 | 1442398 Hephasteus
Hephasteus's picture

There has to be a joke here. Does a pope shit in the bond market? Or something...

Sun, 07/10/2011 - 21:43 | 1442390 snowball777
snowball777's picture

Now that's what I call being prepared for the new economy.

Sun, 07/10/2011 - 22:02 | 1442432 Cognitive Dissonance
Cognitive Dissonance's picture


Who said being prepared is just about bug out bags and bullion?

Sun, 07/10/2011 - 18:00 | 1442006 Sudden Debt
Sudden Debt's picture

It provides a talking subject during the morning coffee.


Sun, 07/10/2011 - 19:24 | 1442158 samsara
samsara's picture


(formally know as TPTB)

Sun, 07/10/2011 - 17:22 | 1441931 Mae Kadoodie
Mae Kadoodie's picture

Why even bother with these markets?

Sun, 07/10/2011 - 17:24 | 1441937 Caviar Emptor
Caviar Emptor's picture

Achtung, baby! 

Sun, 07/10/2011 - 17:29 | 1441948 Racer
Racer's picture

Never blame the actual thing that is wrong, blame those who see it is wrong

Sun, 07/10/2011 - 18:02 | 1442008 nmewn
nmewn's picture

X 10

Sun, 07/10/2011 - 20:00 | 1442200 FinalCollapse
FinalCollapse's picture

"Never blame the actual thing that is wrong, blame those who see it is wrong"

Sun Tzu,

after shitting his pants

Sun, 07/10/2011 - 17:31 | 1441951 carbonmutant
carbonmutant's picture

Why would a culture of corruption disclose anything?

Sun, 07/10/2011 - 18:23 | 1442051 disabledvet
disabledvet's picture

absolutely. and those that comply would be fools would they not?

Sun, 07/10/2011 - 17:33 | 1441953 trampstamp
trampstamp's picture

What sore losers! So it's okay to tear a new asshole on investors that short a stock when there is a rally, but as soon as the bull investors sees a major loss in their positions  oh no.... you shorters have to let us know your shorting positions so we can overrun and rape you. What ass wipes! I'm not a perma-bear, I go both ways, but this time they have gone too far.

Sun, 07/10/2011 - 17:35 | 1441961 HungrySeagull
HungrySeagull's picture

I think the Powers that be are now in a state where they must be truly in a panic trying to contain the cesspool's stink and all from wafting across the fields of profits to the city where the starving bears think to run the river's salmon that is coming in for them after many a moon wait to profit.

Sun, 07/10/2011 - 17:47 | 1441979 jbc77
jbc77's picture

I agree, the banking cartel at this point must be in utter panic mode. They know it's a matter of time, there just putting off as long as possible. It's surreal to watch this unfold.  They will do and say anything to keep the ponzi going. I just hope one day we get to watch them burn.

Sun, 07/10/2011 - 17:53 | 1441996 Popo
Popo's picture

The Titanic has already hit the iceberg. All these measures aimed at keeping order are futile. The boat is sinking. At some point, no matter what, the scramble for lifeboats will and must begin.

Got popcorn? The show is just starting. And like any burning theater scenario, those who panic last -- die.

Sun, 07/10/2011 - 21:45 | 1442401 trampstamp
trampstamp's picture


Sun, 07/10/2011 - 17:39 | 1441965 PaperBear
PaperBear's picture

Of course you should market transparency. What's the alternative ? Someone has a balance sheet that has got 'goat poo' for assets and/or liabilities up the yazoo.

Sun, 07/10/2011 - 17:40 | 1441967 macholatte
macholatte's picture

OK. So is this how it goes, how history rhymes?

>> short the euro, crises abates, short the dollar, next crises (Spain or Portugal?) short the euro, crises abates, short the dollar, next crises....

Sun, 07/10/2011 - 17:42 | 1441969 BandGap
BandGap's picture

Sun, 07/10/2011 - 17:43 | 1441972 mynhair
mynhair's picture

Sending an email to Conslob claiming 1% short in Assgen, just to dick with them.


(Used TCT's email address.)

Sun, 07/10/2011 - 18:16 | 1442033 cahadjis
cahadjis's picture

Mynhair, you've been coming up with the best ideas since your MW days...

I'm doing the same.

Sun, 07/10/2011 - 17:44 | 1441973 jbc77
jbc77's picture

This stuff is unreal. Just change the rules when they don't suit you. I really hope in the end Europe blows sky high. I am going to enjoy very much watching these liars suffer defeat. I'm a patient man, I just hope in the end they get whats coming to them. How much longer can this go on? You wouldn't think bailing wire and chewing gum would hold this long.

Sun, 07/10/2011 - 17:49 | 1441988 HungrySeagull
HungrySeagull's picture

I used a shoelace once to bypass a system failure inside my Rig. It got me out of trouble just long enough to save the load and reach safe haven so repairs can be made.

Sun, 07/10/2011 - 18:23 | 1442050 gorillaonyourback
gorillaonyourback's picture

bailing wire is pretty tough, bending it back end forth breaks it.  so this might be italy's first bend over, it might take 2 3 4 times bent over.  It takes longer for greece bailing wire cuz it has a unique affinity to being bent over and liking it.  Poor dumbass irelands gets bent over over and can't quite figure out which way the turd is goin.  Portugals bailing wire is now in a quality control testing lab being bent over tested for its integrity results due in the next few weeks

Sun, 07/10/2011 - 21:37 | 1442375 MacGruber
MacGruber's picture

If you sit by the river long enough, you will see the body of your enemy float by. -Japanese proverb

Mon, 07/11/2011 - 05:46 | 1442920 luigi
luigi's picture

Is a Chineese one: in this case you could as well be caught by a sudden flood wawe while sitting on the river's bank...

Sun, 07/10/2011 - 17:44 | 1441975 equity_momo
equity_momo's picture

Smells like the next collapse is approaching. Final kick of the can for Europe coming up.

Sun, 07/10/2011 - 17:47 | 1441981 Grease Mokey
Grease Mokey's picture

right so  lets beat on the shorts and and play the blame game when the markets makes make sense and do what they were designed to do go UP and DOWN,(but if they go down too much we need to start our witch hunt). This bring to mind that old foolish rule "mark to market" what a joke that was, glad we got rid of that......

Sun, 07/10/2011 - 19:09 | 1442143 Saxxon
Saxxon's picture

This is what the cocksucking politicians always do.  Is anyone really surprised?  They run the shorts up the flagpole.  Is it not obvious that, as a breed, they suck ass.

Sun, 07/10/2011 - 17:49 | 1441985 partimer1
partimer1's picture

It's always the "surprise" that shocks everyone. At the height of crisis of 2008 when everyone was looking at LEH, it was the AIG that turned out to be or chosen to be the worst. If things turn out to be as planned, it is not crisis.

Sun, 07/10/2011 - 18:25 | 1442061 disabledvet
disabledvet's picture


Sun, 07/10/2011 - 17:50 | 1441986 slewie the pi-rat
slewie the pi-rat's picture

regulatory panic spreads...!

i needed that one!  ka-POW!

Sun, 07/10/2011 - 17:51 | 1441991 DormRoom
DormRoom's picture

Same set up as last year.

QEx ends

set up sovereign default risk for country X

massive market correction

QEx+1 announced

massived redistribution of wealth from middle class to the banking/financial class


been there.


Sun, 07/10/2011 - 19:29 | 1442168 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

One day the setup will push Europe over the brink. No coming back. Banksters will lose at their own game.

Sun, 07/10/2011 - 18:03 | 1442010 wandstrasse
wandstrasse's picture

Please read the European constitutional law §§231-249, chapter 15, page 8935, note 4yd-67-*1:


Sun, 07/10/2011 - 18:04 | 1442015 mynhair
mynhair's picture

When does this become Au positive?  Down since open.

Sun, 07/10/2011 - 18:06 | 1442019 cpnscarlet
cpnscarlet's picture

I see +1.20???

Sun, 07/10/2011 - 18:29 | 1442070 mynhair
mynhair's picture

XAUUSD -.86.

XAUEUR +2.68

That may be the diff.  I'm looking at in $$$$$.

Sun, 07/10/2011 - 18:10 | 1442026 Grease Mokey
Grease Mokey's picture

i dont see how this is exactly AU positive right away. if they stop shorts in short run, then lots will run to cover thier postion running markets higher in Europe and in turn affecting those abroad... in the short run of course.  Euro climbs higher and the dollar goes lower. same old trade...

Sun, 07/10/2011 - 20:17 | 1442222 equity_momo
equity_momo's picture

Why would this run markets higher in Europe? Theres far more longs that shorts and perverting markets like this always backfires. I doubt the halflife of any short squeeze is very long. We just had the short squeeze. And we are close to a euro tipping point - it wont take much more for all out panic in anything denominated in yo-yos.

Its clear to me the US will drive the EZ under the bus before they allow the bond vigilanties to worry about US sov risk. EZ is an easy target : no outright money printer.

Sun, 07/10/2011 - 18:09 | 1442022 Rick64
Rick64's picture

Why don't they just ask them to wear a bullseye.

Sun, 07/10/2011 - 18:11 | 1442027 Cassandra Syndrome
Cassandra Syndrome's picture

FT reports that the EU is meeting tomorrow to discuss a Greek default

Sun, 07/10/2011 - 18:14 | 1442030 swissinv
swissinv's picture

I bet that hudge mysterious short positions won't be reported to the regulator.

Sun, 07/10/2011 - 18:15 | 1442032 A_MacLaren
A_MacLaren's picture

What I want to know is where is the ban on naked CDS longs on soveriegn debt?

Sun, 07/10/2011 - 18:17 | 1442035 Troublehoff
Troublehoff's picture

Who started this 'Gold, Bitches' thing anyway. I can't even remember anymore.

Was is Cheeky Bastard?

Sun, 07/10/2011 - 18:30 | 1442080 A_MacLaren
A_MacLaren's picture

More likely Chumbawamba.

Sun, 07/10/2011 - 18:38 | 1442097 Troublehoff
Troublehoff's picture

that sounds about right

Sun, 07/10/2011 - 18:17 | 1442036 slewie the pi-rat
slewie the pi-rat's picture

italy is so experienced and polished at changing goobermints and currency devaluations, da boyz in brussels & beyond ain't gonna believe this show! 

central banks worldwide are ordering printer rollers and bearings, and control switch relays, and contacting cisco systems for digital storage capacaties hitherto undreamt.

fiat flurries will result in a socked-in system and heavy strains on the debt systems due to continued downpours of fiat, resulting in massive flooding and the deluge of the doomed! 

got PMs?

Sun, 07/10/2011 - 18:26 | 1442066 disabledvet
disabledvet's picture

methinks the IMF is going to take that. "Korean revenge."

Sun, 07/10/2011 - 18:21 | 1442041 johnnymustardseed
johnnymustardseed's picture

If capitalism doesn't work, rig it so it does? 

Sun, 07/10/2011 - 18:28 | 1442072 WonderDawg
WonderDawg's picture

Capitalism? I sort of remember that.

Sun, 07/10/2011 - 18:21 | 1442043 SwingForce
SwingForce's picture

Yo, its no problemo! Don't you munchkins read Tyler's full comments before jumping to be the first reply? The LONGS need their stuff because THEY want to sell it! "Light fuse, get away" -Black Cat


Sun, 07/10/2011 - 18:22 | 1442049 thetrader
thetrader's picture

For some reading on the Italian Economy in chaos, check out the bunga bunga man who screwed a whole nation.

Sun, 07/10/2011 - 18:24 | 1442055 slewie the pi-rat
slewie the pi-rat's picture

are we really ready for the intricacies of the italian banking system? 

won't they hafta kill us if we know?

Sun, 07/10/2011 - 18:27 | 1442068 Grease Mokey
Grease Mokey's picture

DO YOU GUYS remember back in 2008??? when exchanges banned short selling the banks? anyone remembered what happened?????

Sun, 07/10/2011 - 18:28 | 1442073 slewie the pi-rat
slewie the pi-rat's picture

tyler advised everyone to short the ETFs?

Sun, 07/10/2011 - 18:31 | 1442081 Grease Mokey
Grease Mokey's picture

Maybe, but then i never knew about this site.  :)    either way, i'm staying short and adding more tomo.

Sun, 07/10/2011 - 18:30 | 1442079 Troublehoff
Troublehoff's picture

Were you not tempted to call yourself 'Greece Monkey'?

Sun, 07/10/2011 - 18:32 | 1442084 Grease Mokey
Grease Mokey's picture

I tried but that was taken, and then a kewboard error later ruined everything. so stuck with it.  :)

Sun, 07/10/2011 - 18:32 | 1442077 bob_dabolina
bob_dabolina's picture

This 3 second clip is quite appropriate 

You need to diversify yo bonds nigga

Sun, 07/10/2011 - 18:35 | 1442092 Central Bankster
Central Bankster's picture

This is the shot across the bow that the system is imploding.  No different then the CEO of Worldcom or Bear Sterns going on CNBC.

Sun, 07/10/2011 - 18:47 | 1442108 clocksun
clocksun's picture

i love the smell of panic in the morning.  smells like .... short EUR.

Sun, 07/10/2011 - 19:03 | 1442129 Poor Grogman
Poor Grogman's picture

The great thing about this FIAT currency train wreck is that all problems eventually lead to the same solution.


The only variable is how much pain the wimpy unelected bankers are prepared to inflict on the sheeple.  There is a limit before the people say enough and the bankers must avoid that point, therefore the printing will continue.

They must walk the knife edge, and they will inevitably fail.

The historical, and well known fact that all fiat currencies eventually fail can safely be put right up there with death and taxes as one of life's certainties. Your banker masters know this and you can be assured that they have their own arses well and truly covered.

They will be drinking a toast to the sheeple in the first (half empty) life boats... well away from the screaming drowning masses.

Wake up sheeple it's almost time.


Sun, 07/10/2011 - 19:06 | 1442136 PulauHantu29
PulauHantu29's picture

Ignore them....Short the MoFo's !!!!!

Sun, 07/10/2011 - 22:18 | 1442460 Poor Grogman
Poor Grogman's picture


Sun, 07/10/2011 - 20:02 | 1442186 Re-Discovery
Re-Discovery's picture

Does it occur to anyone that Italy -- equating short sellers witn terrorists -- set the date at Sept 9, 2011.  There will be a big PR campaign ahead to say that short sellers have inside information on a terrorist attack.  Watch for it.

The next 9-11 is the cover story for financial oppression.  It will be inteesting to see how many deadlines co-incide with this date.  I am not a conspiracy theorist, but the desperation to rationalize central plans is becoming obvious.

Sun, 07/10/2011 - 20:13 | 1442216 cosmictrainwreck
cosmictrainwreck's picture

ya know what? that is soooo twisted, perverse and out-right fucking might just work [they'll sure give it a go, anyway]

Sun, 07/10/2011 - 20:06 | 1442208 FinalCollapse
FinalCollapse's picture

Time for the banga-banga party.

Sun, 07/10/2011 - 20:18 | 1442224 Imminent Collapse
Imminent Collapse's picture

Things are getting interesting.  Stand away from the fan.

Sun, 07/10/2011 - 21:15 | 1442324 Cognitive Dissonance
Cognitive Dissonance's picture

Where do you stand when the world is the fan?

Just askin' cuse.....well, cuse.

Sun, 07/10/2011 - 21:22 | 1442345 mt paul
mt paul's picture


will be buying gold tonight..

Sun, 07/10/2011 - 21:56 | 1442420 Marlon Brando
Marlon Brando's picture

Time to embrace the horror.

Sun, 07/10/2011 - 22:03 | 1442435 trampstamp
trampstamp's picture

It's like asking the short seller to show his cards in a poker game to decide whether or not to ante up or not.

Mon, 07/11/2011 - 05:42 | 1442917 luigi
luigi's picture

The fact alone that the comparaison to a poker game works this well is witness of the fact that the system is crazy...

Sun, 07/10/2011 - 23:52 | 1442618 PulauHantu29
PulauHantu29's picture

From The Daily Reckoning:

There are plenty of people who object to short-selling on principle. When you short sell, you’re selling something you don’t own from someone who doesn’t know you’ve borrowed it. You give back what you’ve sold only after you’ve bought back. If you sold it for more than it was worth when you bought it back, you make a profit.

--Short sellers serve the very useful function of exposing bad business models and fraud in the market. Attacking them is a great way of ensuring that fraud continues and is not revealed in prices. If you’re perpetuating a fraud, you’d want to get rid of short sellers.

--In any event, Europe’s bankers are busy giving themselves more time to exit the market before allowing it to fail. This will allow them to buy up assets at post-crash levels. The public will be left with huge debts and bailouts to pay for.

Mon, 07/11/2011 - 05:42 | 1442916 Yen Cross
Yen Cross's picture

 The short covering/ long SQUEEZE.. Ya that works well BerlusCONE   HEAD...


    FWIW T-10's are below 3% off 5.3 bps...

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