EU Deja Vu: Naked Short Sales are Banned

Did you ever have the strangest sense that you've been somewhere before and you wish you weren't? That was my guttural reaction this morning when I flipped my switch and scanned the morning headlines.

The European Union Plans to Limit Naked Short Sales of Stocks and Government Debt, read the top story on Bloomberg, which brought me back -- way back -- to the days of yore. You remember that trippy maze, right? It was the genesis of the modern day War on Capitalism that continues to evolve and dynamically shape the financial market construct as we know it.

Y'all remember when Britain's Financial Services Authority banned short-selling on financial stocks? That was two years ago this month (pause to let that thought marinade) but the memory is emblazoned on my brain. It's then we first asked the question, Is Capitalism Dead? As lamented at the time, "Bye bye, Miss American Pie. I'm getting myself a crumpet."

Of course, that tasty treat was just an appetizer. The next morning we awoke to find Martial Law Declared for the Markets and DJIA futures indicated up 500 points on the heels of the 500 point upside reversal the prior session. The following Monday, we arrived Back in the U.S.S.R. and highlighted how the ban on short-sales could follow a script written in Pakistan, of all places. Shock & Awe indeed.

Maybe there's something in the air, with former Lehman Brothers CEO Dick Fuld on the hot seat and Ben Bernanke channeling Chief Brody to celebrate the end of summer. I don't know and it doesn't really matter. These are strange days on the corner of Wall and Broad, which now extend the world over. And you wonder why savvy seers are going dark? No, you can't blame them but mark my words, this too shall pass.

As the fat man once sang, "Once in a while you get shown the light in the strangest of places if you look at it right." It's out there, Minyans; keep your head up, your eyes wide, your mind open, and your risk tight as we put one foot in front of the other and find our way to better days.

Random Thoughts
 

• The sharpest rallies occur in the context of a bear market.
  
  
• We listed several upside targets yesterday morning, the first being S&P 1080. It’s a bit voodoo-esque that we closed at 1080.28.
  
  
• Before we start singing Kumbaya and smirking in a circle, let's not forget the destination will be the destination regardless of the path. In other words, the market -- or shall I say, a free market -- will trade where it's ultimately meant to trade.
  
  
• For my part, while I certainly respect the upside -- which is why I wrote, Don’t Count the Bulls Out…Yet on Tuesday -- I won't confuse a rally with clear skies ahead. I still believe we're in The Eye of the Storm and the other side is a matter of when, not if.
  
  
• Waaaah-Wah!
  
  
• Isn’t it strange that Tuesday night I wrote on my Facebook page that I was changing Crash’s name to “Melt-up?” I wonder if he heard me.
  
  
• Watch the VXO (for a trade towards 20) and monitor the sentiment (Investor’s Intelligence polled 29.4% bulls and 37.8% bears before yesterday’s hot popper). They're only two pieces of a massively complex puzzle but they've worked of late.
  
  
• West Coast Minyans who wanna belly up and smile (and/or attend a free conference) can tickle Gibby for dets on my West Coast jaunt (San Fran 9/10-11 and San Diego 9/12-14). Professors Branden Rife and Jeff Cooper will be joining me for an NFL Sunday Minyanfest on the last leg of this particular journey.
  
  
• Am I the Zach Mayo of Minyanville?
  
  
• Hey Druck, if you can't wrap your paws around the Steelers, why not take a run at the Raiders?
  
  
• Hey -- I thought the camera only added ten pounds?!?
  
  
• When is the last time you smiled so hard your face hurt?
  
  
• Research in Motion (RIMM) got clocked as their "brand loyalty" faded. Who was it that said I'm always early?
  
  
• Did I mention that Festivus will be on Friday, December 3rd this year?
  
  
• I’ll attempt to check in from the road but more likely than not, I’ll catch you on the other side of a red-eye on September 15th. Have a happy and healthy holiday stretch and a peaceful journey no matter where your path paves.

R.P.