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

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
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!"

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.


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

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...

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?

LongBalls's picture

European appetite for gold is going to go ballistic!

tmosley's picture

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

ZeroPower's picture

There is no more market.

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





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.

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.

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.

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.

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.

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!

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.

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!

Ethics Gradient's picture

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

Ethics Gradient's picture

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

GoinFawr's picture

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

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).


tsx500's picture

quick someone call Mr. Ripley !

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.

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.


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.

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..

Bring the Gold's picture

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

centerline's picture

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

Oh regional Indian's picture


Misguided Mammalian Trajectory?


mtthw2's picture

explains alot--think CNBC will catch this?

scatterbrains's picture

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

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.

Rogier's picture

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

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.

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.)

GoinFawr's picture

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

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.

Gordon Freeman's picture

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

Construct's picture

Be very careful what you wish for.

TradingJoe's picture

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

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.

Citxmech's picture

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

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.