The US stock market had fallen into a frenzy. There were far more people selling and shorting than buying. The shareholders of many companies were desperately trying to increase their shares, but it was futile.
The banks, funds, and other financial companies' shares are falling. Even Coca-Cola, Microsoft, and other companies' shares are falling.
Coca-Cola and Microsoft are still making profits this year, but their shares are falling. When panic strikes, no one will consider if the company's shares are strong.
Many people need to sell these high-quality stocks to raise funds, or to save their other industries, or to make money by short-selling other stocks. Some people are selling for the sake of selling. They want to cash out their shares as the stock market is too risky.
In the US, a highly developed financial industry, there are also many people who only know how to buy shares and do not know how to short them.
Most of the short selling is done by investment companies, and very few people are doing it by themselves.
The US Securities and Exchange Commission had issued an announcement to prohibit naked short selling. That means if you do not own a company's shares, you are not allowed to short sell.
The reason is that this is speculation and disrupts the market. It must be prohibited. This method was used during the dotcom bubble.
But there are not many naked short selling, and the scale is not large enough to affect the market.
Although the US Securities and Exchange Commission had issued this rule, the US stock market is still falling.
Many people called this period of time a precipitous decline, as the stock price plummeted in a straight line.
The US financial market's wealth is evaporating, and an astronomical figure is disappearing every day.
After this order was given, Feng Yu's sharp senses told him that what he had predicted might happen. He immediately contacted Kirilenko, Fu Rongqi, and the rest to adjust their investment strategies. They will stop short selling and start to reap the benefits.
Feng Yu had predicted with Fu Rongqi and the rest before. How are they going to save the market when there is a steep drop in share prices?
The simplest and most direct method was to order intervention in the market and ban short-selling.
No matter if you own a company's shares or not, you are not allowed to short sell. This is especially true for some of the key shares. If the falling shares are stopped, the whole trend will be reversed.
During the Asian Financial Crisis, Feng Yu and the rest had discussed this. Once they cannot hold down Hong Kong's stock market, they will use this method.
Fortunately, the funds led by Soros retreated first. They did not resort to such extreme measures.
However, in the current US stock market, if they did not use this method, there was no other way.
If the government had not taken over Bear Stearns, Fannie Mae and Freddie Mac, then the US government might have been able to take out a large sum of money to stabilize the stock market. However, the government did not have the money now. With the stock market falling, they could only resort to some administrative measures!
In the past few days, Soros had shorted a lot of stocks in the US stock market and made a lot of profits. Some of his losses were starting to be replenished.
Doing the investment method that he was best at was indeed the right choice. To hell with the warnings of those consortiums.
At this time, many consortia's investments were also incurring losses, but Soros did not care. This was a normal business investment. What was the problem?
However, Soros was staring at the short selling of the companies under the conglomerates, and it was obvious that he was taking revenge.
Today, Soros heard the Securities and Exchange Commission had banned naked short selling, but he did not care. This had no impact on him.
Soros was still short-selling, and he had not recovered his losses. Since he was doing this, why not make more profits? If he had enough funds, he would not care about those consortiums' attitude.
George W. Bush and his team sat together to discuss how to save the US stock market. The situation now was too serious. The US stock market had plunged too much.
Many people had lost their investments and were forced to liquidate their positions. Every time someone thought the stock market had hit rock bottom, they were shocked to find out that it was far from the bottom.
According to Warren Buffett's classic theory, many companies' shares had fallen below their actual value, but no one dares to go in to buy the shares.
Going in now was not buying the shares at rock bottom. Those who tried to buy the shares at rock bottom and suffered losses were the best proof.
"President, that media had released news that a few companies' financial advisors were once the financial advisors of Fannie Mae and Freddie Mac. Now, many people suspect those companies had falsified their financial reports."
George W. Bush was furious. That damn media! Can't they shut up now? George W. Bush had asked his men to tell those companies not to release any negative news at this time. But that media company told him that the government has no right to stop them from telling the truth.
George W. Bush also discovered that the media company is related to Feng Yu. But there is no evidence. Even if there is evidence to prove that the media company is related to Feng Yu, so what?
What they had revealed was true news and completely legal. What could he do? Furthermore, that media company owns shares in Russia, the UK, and Japan. At this time, George W. Bush cannot provoke these countries.
"Is there no good news?!" George W. Bush was furious.
"Yes. Cox said that they had found a way to stop the stock market from falling. But they need the cooperation of the government and the Federal Reserve."
George W. Bush was interested. There is finally good news. The Federal Reserve will cooperate, and they must cooperate!
"What is it? Tell me."
"Ban on short selling!"
George W. Bush frowned. "Isn't this order already issued?"
What kind of good idea is this? It is not effective at all. After thinking for such a long time, he came up with such a lousy method that was completely ineffective?
"No. This is different from the previous one. It is to stop short selling of financial stocks for 10 days. All investment institutions must report their short positions every day. Anyone suspected of manipulating the market will be sanctioned! "
George W. Bush was shocked. "Stop short selling of financial stocks? Will this work? We are a country with an open financial system. Will this have a serious impact on the future? "
This is like taking drastic measures. George W. Bush also felt this will cause a huge commotion. This is against the free market that the US has been promoting.
"This is the last resort. Once we stop the financial stocks from falling, we will stop the other stocks from falling, and the panic will disappear. Of course, the government and the Federal Reserve must come up with an asset rescue bill to lend those financial companies to tide them over. This will restore investors' confidence. We need time, and this will buy us enough time. "
George W. Bush frowned. Asking for money?!
But he thought for a while and felt this is the only way. But he cannot be the scapegoat for this.
Since it is the Chairman of the CSRC who came up with this idea, he will be the scapegoat in the end!
When many people were short selling, the CSRC made a shocking announcement. Stop short selling of 797 financial stocks for 10 days. All investment institutions must report their short positions every day and strictly investigate any manipulation of the market!
All the investors were shocked by this announcement!
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