Today has been a bad day in the credit markets and the stock market has not recovered but it has calmed a bit.
However the main news is that the FSA has banned the short selling of financial stocks. Will this halt the impending disaster? I suspect that there is a lot of bad news to come. The Banks still need hundreds of billions of fresh cash to shore up their balance sheets and a frozen credit market is still not helping. So the easy lending days are gone. However with the US and the UK regulators both acting to stop short selling it may calm the stock market and give the brokers a chance to cool down too and get a nights sleep.
Still we are left with the question of whether the attacks on Morgan Stanley and Goldman Sachs will be successful? And will the European and even some Asian banks admit to losses? Europe certainly needs an honesty session.
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