Get Shorty! Longs Are Next!

Driving into the city early this morning on my way to the Chicago market, I was sipping my steaming Seattle's Best blend & watching the sky color change from indigo to azure to pink to light blue against the silhouette of the skyscrapers. I was, for a fleeting moment, at peace with my environment.

Then I turned on the 'Squawk Box' audio from CNBC on my XM satellite radio. The moderators were absolutely frothing at the latest save-the-day, finger-in-the-dike rescue from the Fed, to temporarily regulate short-selling on financial stocks, citing those nasty people as the cause for the meltdown in share prices. Pay no attention to that man behind the curtain who has been holding all the bad paper (mortgages) that, initially, made those shares spike in the first place, when their bottom lines were falsely propped up. Then was then and now is now. And when this regulation is lifted October 2--good night, nurse.

As has become evident to regular readers here, I'm not a fan of regulatory governing in a free-market system. It's especially scary in the produce arena. For those who remember, Richard Nixon, in the face of recession, enacted a wage & price freeze in June 1973, which for 90 days took supply and demand out of the equation for everything from camshafts to artichokes. It removed the 'smarts' out of doing business & consequently almost put my dad out on the street. The few times he's discussed it with me, he speaks in tones that he uses when talking about his days in World War II. That's why I hope that the coming regulation in food safety never trickles down to regulation of the actual buy/sell trading of fruits & vegetables, because when a buyer loses faith in daily pricing of a commodity, we're history.

For these 'naked short-sellers', if they are the cause of the battering of Goldman Sachs, Morgan Stanley, not to mention the late but great Lehman Brothers and Bear Stearns (a debatable point), then change the ridiculous law that allows these actions to take place so it never takes place again, don't temporarily stop the action itself! Because...it's only going to build up. And watch out if'n it blows. The result might make the opening of the Ark of the Covenant in the Indiana Jones movie look tame by comparison.

Later,

Jay