"For fast-acting relief, try slowing down"
Lily Tomlin

It is simply hard to imagine how does anyone, who has anything to do with asset management whether he/she is a trader in a large hedge fund or a risk officer even at "conservatively managed" financial institutions, mange to feel safe and/or secure going to bed every night. The continuing "global deleveraging" process combined with the "consistently" unpredictable flow of "silly" government intervention made the routine "hedging" task virtually impossible... I still don't think that SEC and Co fully realize the real impact their "sporadic" actions (like banning short selling for example) make on activities of the same companies they are supposedly "trying to protect"?

Instead of identifying and putting in jail the "evil" rumor spreaders responsible for some of the recent turmoil, SEC instead has now virtually outlawed one of the most "vital" functions of normal markets- "fair value/price" discovery by making the "liquidity" the valuation criteria oin the short term... Remember the impact of "hedging mismatches" investment banks reported during the most recent quarter? I think in hindsight, "these" write offs will look tiny and miniscule compared to what's coming...

Remember, very few big players in today's financial world make pure "equity" bets. To the contrary, it won't be at all unusual for a large hedge fund for example to make a short bet on a financial sector and simultaneously go long commodity or currency futures contracts. I wonder if regulators ever even heard about the "law of unintended consequences"- introduction of the massive "unpredictable" externalities like "$700B bailout" or "short selling ban on financials" will lead to completely unpredictable distortions/"blow ups" in other sectors... by changing the rules so drastically in the middle of the "game", they completely disrupted the entire financial "ecosystem" and introduced additional volatility to even the more stable companies in virtually every industry...

Do you think yesterday's $20 jump in the price of crude was a result of supply/demand mismatch? I certainly don't - the answer is likely to be much simpler and we'll probably hear about it in the news quite soon- someone blew up once again in a liquidity crunch triggered by the outrageous volatility... Whether it was a commodity/macro focused hedge fund or an energy trading operation of some utility company we don't yet know, but events like this are not a good thing and usually lead to more fear in the market place, more volatility and thus to lower asset prices...