“Maybe there really is a Tooth Fairy, after all.”
Friday, September 19, 2008
Yesterday evening, I posted a short piece with the long title, “Crisis on Wall Street: Feeding the frenzy to make money at everyone else’s expense.,” which asked if someone, anyone, would please look into who is making money on the wild stock market swings which have characterized and, to some extent, helped cause the current crisis among our financial institutions.
This morning, to my pleasant surprise, I awoke to the headline, “SEC imposes emergency ban on short-selling.” I haven’t felt like this since I left my last tooth under my pillow. Maybe there really is a Tooth Fairy, after all. And to think, all these years, I thought my mother was just patronizing me.
Short selling is the practice of selling stock you don’t own in anticipation of a decline in the value of that stock. If and when it does fall, you can buy it at that lower price to fulfill your sales order. The spread between the sell and the buy price is your profit. “Sell high, buy low.” The problem is, selling short can actually help force the price of the stock down, and declining stock prices are contributing to the severity of the problems many of our financial institutions are now having.
Anyway, I want to thank SEC senior management for visiting the WordFeeder and for taking such prompt action on my request for which I take full credit. Wow. I had no idea these pieces we publish on the WordPress, hunched over our desks at the end of a long day, lost in the glow of our screens, could have such a profound and immediate impact. I’m thinking I’ll stop writing so much about politics and start working on world peace.