On August 12th the newspaper headlines had some exceptionally bad news: Four European Nations to Curtail Short-Selling. This is an ill-advised panic move, following some massive losses on the European stock markets. (The French CAC 40 index is down 18.2 percent thusfar in August. Meanwhile, the DAX was down 15% in just a week.) Banning short selling does not bode well for the free market, nor for any meaningful stock pricing numbers that we can rely on.
As the nascent global credit crisis deepens, we can expect more monkeying with the markets, on both sides of the Atlantic. For example, the already highly-manipulated COMEX precious metals market will probably become less free, and less transparent. I predict that if the spot price of gold gets above $1,900 per ounce, the COMEX regulators will raise margin requirements to absurd levels--just like they did with Silver Rule 7 to stop the Hunt Brothers in 1980.