SEC bans short-selling of 799 financial stocks & Other Measures

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What a bummer.  The SEC has determined that one of the ways to stave off the financial panic is to prevent shorting of some financial stocks.  ”The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets. This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury and the Congress,” said SEC Chairman Christopher Cox in a statement.  You can read the official announcement at the SEC website.

In addition U.S. authorities are putting together a plan to move “toxic” assets off the balance sheets of major U.S. firms to provide longer-term relief.  This is reminiscent of the old Resolution Trust Corporation (RTC) from the 80’s when the Texas Savings & Loans collapsed.  The RTC was a U.S. government owned asset-management company tasked with liquidating the assets (primarily real estate) of savings and loan associations(S&L’s)_ that went insolvent in the 1980’s.  When you have a lot of crap, it is better to have an organized yard sale.