Doing the same thing over and over, but expecting a new outcome is the definition of a mad person. Latest out of Italy is a new extended short selling ban. Just because it didn’t work last time, it “must” work now? Wonder just how people are expected to hedge positions when shorting is not allowed? Stupidity never ends. From Bloomberg;
Italy’s securities regulator extended a ban on short selling financial shares until Feb. 24, according to an e-mailed statement from Commissione Nazionale per le Società e la Borsa.
The restrictions, in place since August, prohibit investors from betting against the shares and equity derivatives of banks and insurance companies, Rome-based Consob said yesterday.
The short-selling ban covers securities such as UniCredit SpA (UCG), which has plunged 40 percent in 2012 and slumped to a record low this week. Regulators in France, Spain, Italy and Belgium imposed temporary bans on the bearish bets in August to stabilize markets amid Europe’s sovereign-debt crisis.
“The risk is that they’re not allowing investors to get a clear signal about which of these stocks are healthy and which ones are sickly,” Kevin Byrnes, a West Chester, Pennsylvania- based analyst at TFS Capital LLC, said in a phone interview. “That can clog up the price discovery for the entire Italian stock market.”