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Freaky Friday Potpourri: Martial Law For the Markets

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The SEC takes hold of the financial fabric.

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"Last Dance with Mary Jane, one more time to kill the pain." Tom Petty

On the heels of one of the most strenuous stretches in the history of financial markets, we power up for the final fifth of our freaky week.

We offered on Wednesday that if Hank & Co. had any bunnies left in their magic hat, they would be pulled into expiration. On cue, global central banks injected billions of dollars of liquidity during the overnight session.

The rabbits ran rampant on Thursday's opening bell but he was running scared.

Into that initial push higher, we mused that a messy press was not only likely, but necessary.

And boy, did we get a full court press.

State Street Bank (STT) was down 50%.

Mother Morgan (MS) hit a hat size.

Goldman Sachs (GS) dipped into double digits for the first time in years.

Minyanville's Why Wall Street Will Never Be the Same Panic-while not yet at levels seen during previous pain fulcrums-was palpable for the first time this cycle.

As we approached session lows near 1:00 PM, I penned two scenarios on the Buzz & Banter.

The first was that we were approaching a near-term trading low as expiration loomed and government bullets would be fired into the close.

The second was that we were in for a scary few sessions as price discovery permeated and natural levels were found.

Just as that post hit, we ticked at the nadir of the session.

The catalyst arrived from across the pond when Britain's Financial Services Authority announced they were banning short-selling on all financial stocks.

We're not talking upticks here.

We're talking about short selling.

Period.

We wrote in real-time that "the mere specter of stateside adoption will be enough to jack 'em, if only for a trade."

And jack 'em they did, igniting a furious flurry that took the tape all the way back to…Wednesday's close.

Hank seized the moment to throw some fat on the fire, announcing that he was considering a "Resolution Trust Corporation style" vehicle to absorb the toxic debt on bank balance sheets.

It's an option we discussed Friday in the 'Ville and it was out there for the world to see.

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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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