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Price Discovery Era Coming To An End As Spain, France, Belgium, Greece Extend Short Selling Ban "Due To Market Conditions" (Update: And Italy)

Tyler Durden's picture


Update: Italy extends ban until September 30. Arivederci

Kiss the free market goodbye. Spain's and France's regulator have both just announced that the short selling ban, which was supposed to expire tomorrow, has now been extended until the end of September 30, and November 11, respectively. Add to this Belgium and Greece whose regulators announced they will lift its own short selling ban "when conditions allow", or some time in October, in and we can pretty much be confident that the European market rout seen earlier is due to someone leaking the news that price discovery in Europe is now officially over.

An example of one of these statements, courtesy of Consob:

AMF Statement


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Thu, 08/25/2011 - 12:09 | 1599917 DefiantSurf
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Thu, 08/25/2011 - 12:19 | 1599971 scatterbrains
scatterbrains's picture

hmmm  Nov. 11  interesting date. We'll just have to see...

Thu, 08/25/2011 - 12:21 | 1599981 TheTmfreak
TheTmfreak's picture

Their short bans will not prevent collapse of this fiat system. "Fundamentals be damned we'll just command economy, and call it free markets!"

Thu, 08/25/2011 - 12:23 | 1599997 nope-1004
nope-1004's picture

AMF obviously didn't get the EU stress test memo, which clearly shows all banks and insurance co's to be in stellar condition.


BAC is going down.  Buffet's a clown.


Thu, 08/25/2011 - 12:23 | 1599999 tmosley
tmosley's picture

Not only does it not prevent it, it speeds it up!

Nex they'll tell us no-one is allowed to sell, but they can only buy.  lol

Thu, 08/25/2011 - 12:41 | 1600106 Hugh_Jorgan
Hugh_Jorgan's picture

on your link: I see 11/11/11 or 2/2/2 or 6, but I can't see how you, or the blog author find 666 in this date...

Thu, 08/25/2011 - 12:32 | 1600051 DormRoom
DormRoom's picture

what's more shocking is entities taking naked short positions using 40:1 leverage. How can you have price discovery when prices can be temporarily distorted with so much leverage?

Thu, 08/25/2011 - 17:03 | 1601595 LongBalls
LongBalls's picture

European appetite for gold is going to go ballistic!

Thu, 08/25/2011 - 12:10 | 1599921 tmosley
tmosley's picture

Tyler, Tyler, Tyler.  When will you learn?  "When conditions allow" always means "never".

Thu, 08/25/2011 - 12:26 | 1600012 ZeroPower
ZeroPower's picture

There is no more market.

Thu, 08/25/2011 - 13:05 | 1600289 Oh regional Indian
Oh regional Indian's picture

There is no more more.


Fri, 08/26/2011 - 21:31 | 1606372 Mentaliusanything
Mentaliusanything's picture

Mark to Market became

Mark to fantasy

which now has become

Mark to Mayhem

Project Mayhem is up and running

Well done Tyler, the parallels are creepy

I will now get myself to a high-rise vacant floor and watch them fall. Marla - you coming





Thu, 08/25/2011 - 12:21 | 1599922 Mercury
Mercury's picture

With enough long can still drop to zero.

Although this one smells bad I am somewhat sympathetic to some short sale restrictions, at least with smaller companies.  A few powerful players can arbitrarily make life miserable for a company these days by essentially deciding to short the float (or close enough to it) at the market, load up on CDS and other derivatives and generally make it hard for them to concentrate on daily business.

Thu, 08/25/2011 - 12:21 | 1599987 midtowng
midtowng's picture

I'm sypathetic to bans on NAKED shorting. But the people in charge never seem to be able to distinguish the two.

Thu, 08/25/2011 - 12:27 | 1600009 Mercury
Mercury's picture

Well, at certain times there hasn't been much of a practical difference between the two in the marketplace either.  If locate rules aren't enforced shorts have a mechanical advantage over longs - no doubt.

Thu, 08/25/2011 - 12:45 | 1600137 Ethics Gradient
Ethics Gradient's picture

I've tried, but I've never managed to make shorting stocks I own to be a very successful money maker.

Thu, 08/25/2011 - 12:22 | 1599994 TruthInSunshine
TruthInSunshine's picture



I'm not sympathetic.

Most european nations and the U.S. are going to see negative GDP prints for at least 2 quarters now.

I've never seen so much data just bleeding. It's no exaggeration to claim that GD II may be knocking.

Regulators are morons for interfering with the short selling mechanism that helps gets things to where they ought to be, even if that means significantly lower equity market valuations.

As it is, they just appear desperate and incompetent, further leading to the strong trend lately of losing the CONfidence of investors and the public at large.

Governments have gone mad in their attempts to hide the ugly truth that is the condition of the global economy, and massive holes are appearing in the veneer.

Thu, 08/25/2011 - 23:46 | 1602874 StychoKiller
StychoKiller's picture

NOTICE:  Dead bodies will be allowed to pile up, since vultures are banned from doing their job(s)!

Liars will be allowed to lie with no recourse to truth tellers!

Thu, 08/25/2011 - 12:28 | 1600029 AccreditedEYE
AccreditedEYE's picture

Cry me a river Merc... what's to stop your said same company from buying itself out at the cheap valuation? (An artificially cheap valuation if what you say is correct) You wanna say we should have a more transparent derivatives market? I'm with ya there. You wanna ban naked CDS? I could possibly be convinced of that too. But c'mon.... if these "powerful players" push the equity down to dirt for no fundamental reason then it presents a golden opportunity.

Thu, 08/25/2011 - 18:02 | 1601830 Anonymouse
Anonymouse's picture

"With enough long can still drop to zero."

That's why the next step will be to ban all sales of any kind.  Only Buys allowed

Phase 1:  All Buys/No Sells

Phase 2: ?

Phase 3: Profit!

Thu, 08/25/2011 - 12:10 | 1599923 Ethics Gradient
Ethics Gradient's picture

Sarky gets very annoyed when anyone uses the word 'short'

Thu, 08/25/2011 - 12:13 | 1599940 Ethics Gradient
Ethics Gradient's picture

Mind you, he also goes quiet when someone uses the word 'long'.

Thu, 08/25/2011 - 12:18 | 1599967 GoinFawr
GoinFawr's picture

maybe he would be ok if we were to 'petit' financials then? How about 'court'? Could we 'mignon' them?

Thu, 08/25/2011 - 22:33 | 1602644 GeoffreyT
GeoffreyT's picture

The Frog language is so backward that it has no shorthand term for short sales - they're known as 'ventes à découvert'. 

What can you say about a crowd that is so fucking stupid that it fell for John Law's "18th century Bernankeism" and yet STILL reaches for centrally planned solutions that stem from the problem of central planning (of the short end of the yield curve).

The good thing from this though, is that just as the fiscal and monetary mismanagement caused by the Banque Royale caused several wars and the eventual revolt of the plebs (and eventually the fall of France as a world power), the current 'repeat and rinse' will do likewise to the US.


Politics means never having to learn from history - from Roman coin clipping to the Tulipmania to John Law to Weimar... the political class has always relied on the stupidity of the masses (and the ability to start a diversionary war when things get out of hand), but the speed of mass communication is finally starting to undermine that 'last resort' (the babykilling spree in Libya notwithstanding).


Mon, 08/29/2011 - 23:26 | 1613881 GoinFawr
GoinFawr's picture


Thu, 08/25/2011 - 12:11 | 1599926 tsx500
tsx500's picture

quick someone call Mr. Ripley !

Thu, 08/25/2011 - 12:11 | 1599927 tekhneek
tekhneek's picture

Well shit. I honestly thought the collapse would be late 2012 but it's looking a helluva lot more like turkey time 2011. Oh well. Get it over with already. Start the price controls and let this bitch spiral down to 0.

Thu, 08/25/2011 - 13:18 | 1600374 Oh regional Indian
Oh regional Indian's picture

I think it is really intense in a way how casually we ask for the collapse to just come on now dammit.

ZHers, notayemans, Kaiserites, rensians and a few other groups off net probably make up the aware set for what is coming. I wonder what the same group of people felt back in the late 20's and then after th ecollapse they all knew was inevitable did hit.

Weird feeliing to be ahead of th eherd.


Thu, 08/25/2011 - 12:11 | 1599929 centerline
centerline's picture

I guess when you are out of bullets there isn't much else to do except try the same old tricks and hope for different results.  Of course, that is also the definition of insanity.

Thu, 08/25/2011 - 12:14 | 1599946 UGrev
UGrev's picture

When your brakes won't work, the only thing you can do is down shift until you roll to a stop or crash. Though crashing is more likely..

Thu, 08/25/2011 - 12:18 | 1599964 Bring the Gold
Bring the Gold's picture

Maybe they should consider taking the lead foot off the accelerator if "slowing down" is the goal here.

Thu, 08/25/2011 - 12:29 | 1600037 gmrpeabody
gmrpeabody's picture

Well played, sir.

Thu, 08/25/2011 - 12:36 | 1600080 centerline
centerline's picture

Thats the funny part.  The nightmarish MMT we currently following believes you must accelerate even faster in order to avoid crashing.

Thu, 08/25/2011 - 13:29 | 1600434 Oh regional Indian
Oh regional Indian's picture


Misguided Mammalian Trajectory?


Thu, 08/25/2011 - 12:12 | 1599932 mtthw2
mtthw2's picture

explains alot--think CNBC will catch this?

Thu, 08/25/2011 - 12:13 | 1599942 tekhneek
tekhneek's picture


Thu, 08/25/2011 - 12:12 | 1599935 scatterbrains
scatterbrains's picture

Print bitches !!! by the way 11/11/11 is the opposite of 6/6/6 in binary code  hehe

Thu, 08/25/2011 - 12:14 | 1599944 Construct
Construct's picture

They can manipulate all the markets as much as they want it does not change the fact that all of Europe is insolvent with the exception of Germany. But given how things are going expect Germany to be broke and insolvent as well soon.

Thu, 08/25/2011 - 12:21 | 1599984 Rogier
Rogier's picture

Only Germany solvent? Try The Netherlands, Finland and Austria as well. The rest is pretty much crap indeed.

Thu, 08/25/2011 - 12:38 | 1600005 Construct
Construct's picture

That may be true the reason I listed Germany is because it's the only country left in Europe that is 'industrial' and have relative low levels of debt. The stability in German government bonds reflect this.

Thu, 08/25/2011 - 20:25 | 1602199 ping
ping's picture

I like your quote marks around 'industrial'! You're right - they can get a boost from woozy markets, but theyre not really 'industrial'. The horrible truth is that there isn't a huge gulf between Germany and the rest of the Eurozone in fundamentals like industrial output or productivity. No, seriously! (Stop laughing!) 

They're at the top of the pile, and they're world class manufacturers. They have nice beer and recognise David Hasselhoof for the genius he is. But: pretty much all EU / NAFTA / Mercosur nations are in trouble within the short to medium term at the latest, with lord knows what coming in the long term. (It's not like we've all been living on a bubble of borrowed energy and resources, in the way of fossil fuels and petroleum-based fertilisers, ahem...)

Germany has the same issues we all do in the 'developed' world (I hate that term, it sounds like we can't go backwards): relatively low natural resources for its current population and high living standards, high debt, highly concentrated wealth in the hands of older demographic segments and the top 0.1%, burdened and incompetent banks, tied into failing institutions like the EU and NATO, and other structural problems that no-one's anywhere near dealing with. 

German manufacturing can't make up for those flaws. (What one sector could?) If their industrial nature meant anything, I'd like to know why factory workers and miners have had wage freezes for so many years, which they willingly agreed to because they thought them necessary

Long term, maybe Aus or NZ will be ok, or Chile or Norway or Iceland - well, let's hope they are - because they've got resources, a bit of distance from the real a-holes, a degree of independence, and don't have to rely on a globalised economic model. (Well, 'not rely' in the sense that others will come cap in hand to them, and they're in the driving seat.) People always want food, iron ore and uranium. Or freedom to talk and think without being thrown in jail. And their money buys nice militaries to defend yourself with.

I do think that if anyone in Europe can come through this, Germany, Poland, Scandinavia and the Baltic States can (for cultural reasons as much as anything) but it won't be painless. 

God I've got to stop typing whilst drunk. I do dick jokes when sober. This is all crap because if any nation screws with the system, it'll get invaded, false-flagged and exterminated within a few years. I know this stuff but I'm too optimistic when I get a good single malt. (Terrier puppy survived scary operation today. Celebrating.)

Thu, 08/25/2011 - 12:33 | 1600058 GoinFawr
GoinFawr's picture

Norway is 'solvent' too. Iceland took the hit and is out of the shit... 

Thu, 08/25/2011 - 12:39 | 1600101 Construct
Construct's picture

I do not know much about Norway. But I believe you 100% when it comes to Iceland. Iceland was pretty much the only country that had balls enough to tell the bankers to f**k off.

Thu, 08/25/2011 - 12:14 | 1599945 Gordon Freeman
Gordon Freeman's picture

Why don't they just close the xchanges?  Markets are such a tired, failed experiment...

Thu, 08/25/2011 - 12:26 | 1599954 Construct
Construct's picture

Be very careful what you wish for.

Thu, 08/25/2011 - 12:14 | 1599948 TradingJoe
TradingJoe's picture

And the NOISE is getting less and less and less and.....less!

Thu, 08/25/2011 - 12:17 | 1599950 MFL8240
MFL8240's picture

Kiss the free market goodbye.


Add the USA to the list. Margin hikes on Gold and Silver and lowering margin rates on Treasuries and the ES is no differnt than banning short selling, it constitues market manipulation and a gross distortion of a free market.  Howvere, its 6 of one 1/2 dozen of another but,  I think the US markets are a tad bit more courrpt over the long haul.

Thu, 08/25/2011 - 12:28 | 1600026 Citxmech
Citxmech's picture

Yeah - but when margin requirements on Ag = 100% don't we finally have a "true" free-market? 

Thu, 08/25/2011 - 12:15 | 1599951 Dick Darlington
Dick Darlington's picture

Almost perfect list of eurozone countries which are insolvent. Eurozone will break down and it might come sooner than many think possible. Major political crisis will be on the agenda soon and that will be the final push towards disintegration.

Thu, 08/25/2011 - 12:15 | 1599953 vote_libertaria...
vote_libertarian_party's picture

Yepper...if you are barreling down hill the best thing you can do is take off anything that will slow you down.




It's like they don't remember 2008/2009 at all.

Thu, 08/25/2011 - 12:19 | 1599968 MFL8240
MFL8240's picture

Or do the American people!  In fact, the 1932 market crash should also be a vivid illustration of where we are today.

Thu, 08/25/2011 - 12:18 | 1599961 Negro Primero
Negro Primero's picture


'The Italian government has moved to immediately unfreeze 350 million euros of Libyan assets held in Italian banks, Premier Silvio "Bunga Bunga" Berlusconi said in Milan on Thursday.'

Thu, 08/25/2011 - 12:18 | 1599962 apberusdisvet
apberusdisvet's picture

Watch for more US troops called home; we're definitely at the tipping point; Obama and Timmah change underwear every few minutes.  It is more than interesting that Buffet's move accomplished jackshit.

Thu, 08/25/2011 - 12:19 | 1599972 Curtis LeMay
Curtis LeMay's picture

EUnuchs simply love banning - they can never get enough of it...

I know, euroland should just ban stock and commodity trading altogether...that way "no one can lose anything"!

Thu, 08/25/2011 - 12:19 | 1599974 lolmao500
lolmao500's picture

And seems to me there's rumors of a Germany credit downgrade.

Thu, 08/25/2011 - 12:33 | 1600067 Dick Darlington
Dick Darlington's picture

Yes and Aberdeen AM said the downgrade could come within 3 months. Loooool!!! Raters have stamped France with AAA and stable outlook recently. If France is AAA Germany will NEVER get downgraded. Never. France is the Greece of continental Europe with huge toxic banks.

Thu, 08/25/2011 - 12:44 | 1600124 lolmao500
lolmao500's picture

Ya well they will downgrade France beforehand...

Thu, 08/25/2011 - 12:20 | 1599975 Bam_Man
Bam_Man's picture


Thu, 08/25/2011 - 12:20 | 1599980 John Law Lives
John Law Lives's picture

Short selling bans and money printing forever...  What a great system!

Thu, 08/25/2011 - 12:24 | 1599991 Justaman
Justaman's picture

Fair Market Value = Fixed Market Value, no need to change the acronym. 


Thu, 08/25/2011 - 12:22 | 1599993 Hedgetard55
Hedgetard55's picture

What " free market" am I supposed to kiss goodbye? Where is it?

Thu, 08/25/2011 - 12:25 | 1600007 tmosley
tmosley's picture

Truth.  Kiss the mixed market goodbye, and say hello to the centrally planned market.  I hope you like standing in line.

Thu, 08/25/2011 - 12:30 | 1600044 topcallingtroll
topcallingtroll's picture

Yes, where may i find this free market of which you speak?

Thu, 08/25/2011 - 12:24 | 1600001 Vincent Vega
Vincent Vega's picture


Thu, 08/25/2011 - 12:26 | 1600013 Vinny
Vinny's picture

"Kiss the free market goodbye." When was the last time we had a free market?

Thu, 08/25/2011 - 12:28 | 1600027 topcallingtroll
topcallingtroll's picture

In the long run short selling bans probably lead to lower prices, ceterus paribus.

I always thought the europeans were smart. Looks like they are as dumb as us americans they look down upon.

Thu, 08/25/2011 - 13:51 | 1600498 GoinFawr
GoinFawr's picture

awww; there, there tct, have a tissue.  Did some cheeky Swedish piker have the audacity to slight your 'glorious state of eternal victory' again? Interdum modo elabitur...

Thu, 08/25/2011 - 12:29 | 1600032 espirit
espirit's picture

PM's are the only things that matter, ask the Fin's.

Physical, Bitchez. 

Thu, 08/25/2011 - 12:32 | 1600061 nah
nah's picture

hail, the super great depresion is here


let the rationing begin

Thu, 08/25/2011 - 12:34 | 1600069 crzyhun
crzyhun's picture

The more things change the more they stay the one time Europe led US in GDP. Then the social welfare system took over. It is all over but the shouting! Sad.

Thu, 08/25/2011 - 12:35 | 1600076 TK7936
TK7936's picture

In a true free market you can only sell what you own. Shortselling is just a trojan horse for banking monopolies.

Thu, 08/25/2011 - 17:26 | 1601711 Alpha Monkey
Alpha Monkey's picture

Isn't that the distinction between Naked Short Selling and Short Selling.

Sun, 08/28/2011 - 00:45 | 1608919 bid the soldier...
bid the soldiers shoot's picture

A distinction without a difference.

You always had to borrow the security you wanted to sell short.

Then you didn't have to borrow it, and you were naked.

Then you didn't need an uptick to make your short sale.

Next you'll be able to sell short more securities than were issued by the Corp.

Buy a put. Give some business to the CBOE, if you don't own your own seat.

Thu, 08/25/2011 - 12:37 | 1600085 Winston Smith 2009
Winston Smith 2009's picture

"Kiss the free market goodbye."

What in the hell makes you think there ever was one?  It's been crony capitalism since nearly day one.

Thu, 08/25/2011 - 12:37 | 1600086 Earl of Chiswick
Earl of Chiswick's picture

EFA is liking it as it hits session lows

Thu, 08/25/2011 - 12:38 | 1600093 LookingWithAmazement
LookingWithAmazement's picture

I rest my case.

Thu, 08/25/2011 - 12:40 | 1600097 Miss Expectations
Miss Expectations's picture

I just witnessed some price discovery.  Went out for extra hurricane groceries and was standing next to a woman in the dairy section.  She could NOT believe that milk was almost $5.00/gallon.  If I had to guess, I'd say she was a SNAP card user.  Perhaps this makes her less aware of prices?  Then I realized that since it's the end of the month, the SNAP folks probably don't have anything left on their cards and can't stock up for the coming storm.  The good news was that the crew from Fire & Rescue was shopping, too :).

Thu, 08/25/2011 - 12:46 | 1600147 yz
yz's picture

amf = adios mother fucker

Thu, 08/25/2011 - 12:52 | 1600188 Gringo Viejo
Gringo Viejo's picture

"If they can't see ya, they can't get ya."                    Monty Python

Thu, 08/25/2011 - 12:56 | 1600220 GoinFawr
Thu, 08/25/2011 - 13:08 | 1600308 JW n FL
JW n FL's picture

Synthetic Shorts Bitchez!!!

Thu, 08/25/2011 - 13:24 | 1600406 Volaille de Bresse
Volaille de Bresse's picture

Talking about Sarky, Tyler should start a thread about our/France's new austerity plan : they'll raise the VAT on products like... (tah dah) : sodas cigs and (drum roll) theme parks!!! Take that Disney, you imperialist bastard and your long-tailed cheese-eating lackey. 


Seriously I hadn't realized how addicted to meth "top"-rank politicians are here... 

Tue, 08/30/2011 - 05:25 | 1614126 MGHJFHD
MGHJFHD's picture

There are some interesting points in time therein article but I don’t know if I see all of them heart to middle . There is some validity but I will take hold judgement until I look into it further. Good article , thanks and we want more! Added to FeedBurner also.


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