Macro Tsimmis

intelligently hedged investment

Bank of America (BAC) update #3—SEC Extends Short Selling Ban

Posted by intelledgement on Thu, 02 Oct 08

Late last night, the SEC announced an extension of the ban on short selling financial services firms, which was supposed to end today. The ban is now expected to last through the earlier of three trading days after Congress passes the bailout plan or 17 October.

We still get to hold on to our existing short positions on Bank of America (BAC), Goldman Sachs (GS), and HSBC Holdings (HBC). However, given the high continuing level of systemic risk here—which the SEC evidently consider to be problematic—we would like to replace our recently covered Wachovia (WB) short by selling short Citibank (C) (who are buying Wachovia) or Morgan Stanley (MS)…but, alas, no such luck.

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