Desperation Time: Italian Regulator Reintroduces Financial Stock Short Selling Ban

Tyler Durden's picture

Here we go again: just like the summer of 2011, when it achieved absolutely nothing but succeeded in increasing the panic to a fever pitch, Italian regulator Consob has just reintroduced a short selling ban for financial stocks. Supposedly, it will last only a week. Last year it was also supposed to be short-term but was only removed after the LTRO fooled everyone (well, not everyone) into believing Europe was fixed, which of course it wasn't. Expect a modest blip higher, followed by the inevitable flush lower as every other European country follows suit, starting first with Spain.

From Consob:

Consob: reintroduced the ban on short selling bank stocks and insurance

The measure immediately implement all week


The measure immediately implement all week


In view of recent trends in stock markets, Consob has today decided to reinstate the prohibition of short selling securities of the banking and insurance sectors listed in the annex.


The measure takes effect from 13:30 pm today, July 23, 2012, and remains in force throughout the week until 18:00 pm Friday, July 27


The prohibition applies both to short-selling securities backed by loans ("covered") and "bare", already banned by the previous resolution (No. 17993) 11 November 2011.


Intermediaries are required to take all necessary measures and precautions to strict compliance with the resolution.


The full text of the measure (Resolution no. 18283 of July 23, 2012) and the list of affected titles are available on site


Rome, July 23, 2012

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evolutionx's picture

Italy in a death spiral:

CDS 555

10j Bonds at 6,5%


Spain dead:

CDS 655

10 J at 7,5%

GetZeeGold's picture change? Huh......finally something is happening as expected.

battle axe's picture

Well, the short selling  ban always fixes everything, I mean the whole exploding debt thing means nothing. Friggin Crazy. 

TruthInSunshine's picture

Everything is fine. U.S. companies will do well. It's not like the EU is the largest economic block and base of consumption in the world or that it will filter through and adversely impact U.S. corporate earnings, or that China, Japan, South Korea, Canada or Australia won't be hampered further either.



And McDonald's just missed earnings expectations.  I haven't read the bible lately, but I think that's one of the 7 signs or plagues, along with locusts or something.

TrainWreck1's picture

Why waste EBT bucks on Mickey D's when you can use it at Red Lobster?

francis_sawyer's picture

I happened to go to McDonald's the other day for one reason & one reason only... They were offering:

"Buy one Quarter Pounder w/cheese or Big Mac, & get a 2nd one for a penny" (3 days)

So I was actually curious to see if they cut down the size of the things or something else, hidden in plain sight, was up...

Anyway, when I made my order, at the drive thru, they were also doing this (get your order within 30 seconds) promotion... There was actually a manager looking dude in the parking lot with a stopwatch yelling at the employees & timing the service from cashier to them handing you your bag... As it turns out, mine came in at about 2 seconds OVER the limit, so they had to hand me a card which entitles me to a FREE sandwich...

In their rush to get the Quarter Poundersd out within 30 seconds, they appeared rather 'undercooked' & unappetizing to me...

So what's the result?

Basically 3 free sandwiches, with ZERO incentive to buy more... I'M LOVIN' IT!

TruthInSunshine's picture

I don't eat fast food. It's not that I'm a VIP, special or deserving of better, but that I've found ways to eat actually healthy food for less expense and that help make me well rather than sick.

But I do have a friend who is a proud slob, who believes that the less he cares about his health, the less likely he is to die or get sick (a perverse and cynical view of god's cruel joke on humanity, which is just rationalization of the world as he sees it, is his real MO), and he swears that ordering a double cheeseburger off the $1 McDonald's menu and requesting "no cheese with pickles" guarantees a cooked to order 1/4 pounder.


And that's my tip for the day; along with to either go short or long Spanish 2 years (yielding 6.55% as of 8:18 eastern standard time), depending on whether you think the "debt to solve more debt" (i.e. Krugmanites) or the "anyone who is proposing assuming massive additional debt to solve massive indebtedness is fucking batshit crazy" (i.e. rational people steeped in basic arithmetic) are correct.

Dcheeth2's picture

Well, it never was going to work, sticking a Maccie D's in the middle of a village full of finely tuned athletes. 

Last I looked, Darts wasn't an Olympic sport. 

TrainWreck1's picture

Darts were banned as they are considered 'pointy things of mass destruction'

Just imagine if someone snuck one on to a dirigible or accidentally perforated Ted Kennedy*




*3 years sober! 


TrainWreck1's picture

The people running the Italian show are lawyers, economists and, in general, geniuses.

OK, I lied about the genius part, but they do wear nice suits.


battle axe's picture

When is a crisis, not a crisis? When it keeps happening again and again and again, and nothing changes. 

Popo's picture

Just pathetic:  The champions of the free market are once again exempted from it.

The implosion can't come soon enough.

Howdan's picture

When they start panicking and try to implement these "Short-Selling" bans you know things are serious!

Or how about ACTUALLY trying to solve the structural problems at the heart of this crisis like labour market reform, tax reform and creating jobs & growth???

One of the best quotes I've ever heard though, is : "Never believe anything until it's officially denied"

francis_sawyer's picture

Next step is to go house to house & force you to buy financial stocks at gunpoint...

GetZeeGold's picture much can I put you down for?


francis_sawyer's picture

depends on whether or not you're wearing a girl scout outfit...

resurger's picture

The end is near ...

DormRoom's picture

debt will be purged from the sytem either from a great deflation or hyperinflation.  No soft landing for anyone.  Adding more debt is like adding accelerant to a fire.


Nice f*cking job, Alan Greenspan, for allowing a 30 yr debt bubble to grow.

adamas's picture

hmmmmmm I wonder what banning short selling will do for world trade.... note the blue line denotes cape sized charter rates and is a good proxy for the state of world trade... not very bubbly by all accounts


fonzannoon's picture

Is it me or has the Spanish market come back massively in the last hour?

Rusticus's picture

Like a chicken without it's head, 3% rally in 60 minutes tho still down 2% on the day ... death throes twitching.

Negro Primero's picture
...gee, it's good to be back home! I'm back in the CCCP!!! Monti in Russia to meet with leaders
ZeroAvatar's picture

Futures down -139 at 06:00 Mountain.  I'm sure NO ONE is front running this information!  (DOW)

Ted Baker's picture


Curtis LeMay's picture

11.08 UK



Sudden Debt's picture

to be clear: shortselling is not the same as buying puts.
you can buy puts but you can't sell naked puts.
just to be claer :)
because I'm not selling my puts, ban or no ban :)

Dr. Engali's picture

I wonder if there is anybody short these markets. The printers and the regulators keep screwing them and making it painful.

orangegeek's picture

This should start hitting US markets this week too.  Primary wave 3 down on the SP500.  Here we go.

Meesohaawnee's picture

weve had a short selling ban here in the states for the last 8 months. it just never was official.

Cranios's picture

The short-selling ban in any country is a GOOD thing, because it removes the possibility that the market "melted down" due to short-sellers, an idea that know-nothing journalists and the public they serve, never seem to be able to get out of their heads.

Grand Supercycle's picture

SPX bearish weekly chart strengthens: an important development.

As mentioned on Friday, SPX downleg continues.

Useful SPX weekly chart at blog.