Twin Shocks Hit Markets as Germany Bans Naked Short Selling and US Senate puts Curbs on Credit Cards

Markets have become a very risky place both on the long and short side with governments coming up with new “bailouts” and “regulations” almost each day it seems.After the EU Bazooka created a massive short squeeze , the new German ban on “naked short selling” effective from midnight has led to US markets declining along with the usual suspects like the Euro and the Pound.Oil seems to have decisively broken its trading band of roughly between $70-$87 since the last 6 months, probably indicating that the the markets might have made an intermediate high.The EU has been coming down hard on the financial sector with new regulations on hedge funds and thinking of legal action against alleged misdoings by the US investment banks

On this side of the Atlantic , the US Senate put a surprise curb on credit cards fees leading to sharp declines among the “safe” financial sector stocks like Mastercard and Visa.Wall Street and the financial sector is facing a barrage of new regulations and rules with Goldman Sachs being made the prime target.The markets are falling as regulations will sharply reduce the profits of these companies.

Stocks Fall as Germany Blocks ‘Naked’ Short Bets – WSJ

Germany will ban so-called naked short-selling from midnight, a lawmaker with the ruling Christian Democratic Union told Dow Jones Newswires. He added that Chancellor Angela Merkel will announce the plan in her speech to the lower house of parliament Wednesday morning.

Naked short selling—which differs from short selling in that the sold shares aren’t borrowed in advance—came under fire at the height of Greece’s struggle to refinance its debt, with many euro-zone governments saying such transactions in credit-default swaps, a type of default insurance, artificially inflated Greek funding costs.

Credit-Card Industry Faces ‘Volcanic’ Senate Eruption – Bloomberg

Credit-card firms caught off-guard by U.S. Senate passage of curbs on debit fees are facing what one executive sees as a “volcanic” eruption of legislation, including possible limits on interest rates.Sheldon Whitehouse, a Rhode Island Democrat, said yesterday states should be able to enforce their own rate limits on cards, regardless of where the issuer is located. Whitehouse pushed his amendment on the Senate floor the same day that his colleagues voted to let consumers get credit scores for free.

Visa Inc. and MasterCard Inc., the world’s biggest card networks, have fallen to the lowest levels since October after the Senate passed Durbin’s amendment. San Francisco-based Visa declined $3.68, or 4.9 percent, to $71.03 at 12:33 p.m. in New York Stock Exchange composite trading. MasterCard dropped 4.7 percent, Discover slid 2.2 percent and American Express fell 1.5 percent.Merchants last year paid $19.7 billion in fees tied to debit transactions processed by Visa and MasterCard, with more than half that amount paid to banks, according to the National Retail Federation.