This will be a short diary just to talk about some of the companies that made 'the cut', meaning those who are being protected from the market practice of shorting.
The SEC went into action and has banned short selling on some company stocks in order to 'quell' the financial crisis. The keyword being 'some'. So today I decided I would spend time and look over the profiles of the companies they decided are 'too big to fail' by hedge funds shorting them to death.
Most of the names on the list are ones you would expect them to be very interested in protecting - that is investment banks & insurance companies. However, there are a number of companies on the list that do not make any sense to me, for a variety of reasons. Let's take a look at some of them.
- Atlas Pipeline Holdings
From their very own home page:
Atlas Pipeline Holdings, L.P.'s ("Atlas Pipeline Holdings") assets consist of its interests in Atlas Pipeline Partners, L.P. (NYSE: APL) ("Atlas Pipeline Partners"), a publicly traded Delaware limited partnership. Atlas Pipeline Partners is a midstream energy service provider engaged in the transmission, gathering and processing of natural gas in the Mid-Continent (primarily Oklahoma, Arkansas and Texas) and Appalachian (eastern Ohio, western Pennsylvania and western New York) regions. Atlas Pipeline Holdings' interests in Atlas Pipeline Partners will initially consist of a 100% ownership interest in the general partner of Atlas Pipeline Partners, Atlas Pipeline Partners GP, LLC, which owns:
Can someone can explain to me what this is about? I thought we were supposed to be bailing out the banks who made these bad mortgage deals and those companies that insured them? Why on earth would we need to protect an energy supplier that has a reliable source of raw materials to draw from?
By the way, there are at least 3 or 4 other natural gas service companies on the list. Somebody want to explain that?
- Green Builders Inc.
From their investor relations page:
Green Builders, Inc. (AMEX: GBH), a land acquisition, development, and construction company, is a pioneer for mass-appealing "green" homes and communities. The company offers well built, sustainable homes at a price range from the $180s to $600s. Every Green Builders' home incorporates the four pillars of green: energy efficiency, water conservation, use of green materials, and the promotion of healthy living.
Why are we protecting this builder? How the hell can this one company such an integral part of the financial landscape that they deserve to be protected before any other builder? Simply because they're green?
- Morningstar Inc.
From their investor relations page:
London-based Seven Investment Management distinguishes its research platform for advisors with Morningstar® Licensed Data. Morningstar built a customized data package to support the firm’s unique investment approach.
As far as I can tell, this company doesn't even offer any insurance or security products - ONLY RESEARCH! How can this be justified? Are we so paranoid now that we can't let the market have any effect on those who analyze financial data? Anyone?
- We are protecting foreign banks (excuse me, some foreign banks who bought up our garbage.)
NOMURA HOLDINGS INC
ROME BANCORP INC
ROYAL BANK CANADA MONTREAL
(There are more foreign banks on the list)
Here is the list of companies the SEC is now protecting from shorting. Anyone else think this list is earmarked?