Did The 2008 U.S. Short Selling Ban Help The Banks In The S&P Financial ETF?
“Late Tuesday in Europe, German authorities announced they would temporarily ban naked short selling of certain financial institutions and buying of naked credit default swaps of European Union government bonds. Perhaps not surprisingly, the U.S. equity markets sold off on the news and the reaction from European markets Wednesday was just as predictable, down 2 – 3.5% across the continent,” Daryl G. Jones Reports From CNN.
Jones goes on to explain, “The SEC experimented with a short selling ban in late 2008, which should have been a lesson for German authorities. On September 18th 2008, the SEC banned short selling on certain financial institutions, with the stated intention to “protect the integrity and quality of the securities market and strengthen investor confidence.” The immediate term impact of the short selling ban was a one-day short squeeze in which the financial sector rallied, but longer term, the ban provided no increased investor confidence in the financial sector.”
“In the chart below, we have graphed the (NYSE:XLF), which is the S&P financial sector exchange traded fund, or ETF, that tracks financial institutions. The (NYSE:XLF) peaked on September 19, 2008, the day after the ban, at $22.38 and then began a six month slide and finally troughed at $6.26 – a 72% overall decline for the sector. Admittedly, the SEC may have limited volatility in the sector in the short term, but the only investor confidence that seemingly followed the ban was confidence in an orderly unwind and decline,” Jones Reports.
The Euro’s Demise Has Been Set in Motion: Are you protected?
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Here are some details we put together on the Financial Select Sector SPDR ETF (NYSE:XLF) including a list of all the financial institutions within the ETF below:
Financial Select Sector SPDR ETF (NYSE:XLF)
The Financial Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Financial Select Sector Index (ticker: IXM). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
| Fund Name: | Financial Select Sector SPDR Fund | |||
| Ticker Symbol: | XLF | |||
| Holdings: | As Of 05/19/2010 | |||
| Name | Weight | Ticker | Sector | Shares Held |
| Bank Of America Corporation | 10.01 | (BAC) | Financials | 40932412 |
| Jpmorgan Chase & Co | 9.57 | (JPM) | Financials | 16210702 |
| Wells Fargo & Co New | 9.53 | (WFC) | Financials | 21138476 |
| Berkshire Hathaway Inc Del | 7.68 | (BRK.B) | Financials | 6752175 |
| Citigroup Inc | 4.58 | (C) | Financials | 80184110 |
| Goldman Sachs Group Inc | 4.51 | (GS) | Financials | 2147514 |
| American Express Co | 2.94 | (AXP) | Financials | 4882905 |
| Us Bancorp Del | 2.83 | (USB) | Financials | 7808157 |
| Morgan Stanley | 2.31 | (MS) | Financials | 5704172 |
| Bank Of New York Mellon Cor | 2.13 | (BK) | Financials | 4929600 |
| Metlife Inc | 2.03 | (MET) | Financials | 3342589 |
| Pnc Finl Svcs Group Inc | 1.99 | (PNC) | Financials | 2109248 |
| Prudential Finl Inc | 1.66 | (PRU) | Financials | 1897406 |
| Travelers Companies Inc | 1.58 | (TRV) | Financials | 2095866 |
| Simon Ppty Group Inc New | 1.48 | (SPG) | Financials | 1183348 |
| Bb&T Corp | 1.37 | (BBT) | Financials | 2819696 |
| Aflac Inc | 1.27 | (AFL) | Financials | 1913971 |
| Cme Group Inc | 1.27 | (CME) | Financials | 271698 |
| State Str Corp | 1.23 | (STT) | Financials | 2021028 |
| Capital One Finl Corp | 1.18 | (COF) | Financials | 1858069 |
| Allstate Corp | 1.03 | (ALL) | Financials | 2190693 |
| Chubb Corp | 1.03 | (CB) | Financials | 1340828 |
| Schwab Charles Corp New | 1.02 | (SCHW) | Financials | 3988969 |
| Franklin Res Inc | 0.94 | (BEN) | Financials | 605402 |
| Suntrust Bks Inc | 0.84 | (STI) | Financials | 2038726 |
| Progressive Corp Ohio | 0.83 | (PGR) | Financials | 2742077 |
| Price T Rowe Group Inc | 0.82 | (TROW) | Financials | 1057051 |
| Northern Tr Corp | 0.77 | (NTRS) | Financials | 986512 |
| Equity Residential | 0.77 | (EQR) | Financials | 1150366 |
| Public Storage | 0.75 | (PSA) | Financials | 553828 |
| Vornado Rlty Tr | 0.74 | (VNO) | Financials | 643568 |
| Marsh & Mclennan Cos Inc | 0.72 | (MMC) | Financials | 2172827 |
| Loews Corp | 0.72 | (L) | Financials | 1447753 |
| Hartford Finl Svcs Group In | 0.69 | (HIG) | Financials | 1810601 |
| Aon Corp | 0.66 | (AON) | Financials | 1088838 |
| Fifth Third Bancorp | 0.65 | (FITB) | Financials | 3245983 |
| Boston Properties Inc | 0.65 | (BXP) | Financials | 567404 |
| Ameriprise Finl Inc | 0.65 | (AMP) | Financials | 1043170 |
| Host Hotels & Resorts Inc | 0.58 | (HST) | Financials | 2664543 |
| Regions Financial Corp New | 0.57 | (RF) | Financials | 4868982 |
| Hcp Inc | 0.57 | (HCP) | Financials | 1199596 |
| Principal Finl Group Inc | 0.55 | (PFG) | Financials | 1304264 |
| Invesco Ltd | 0.52 | (IVZ) | Financials | 1750590 |
| Intercontinentalexchange In | 0.51 | (ICE) | Financials | 300682 |
| Lincoln Natl Corp Ind | 0.51 | (LNC) | Financials | 1234028 |
| Avalonbay Cmntys Inc | 0.49 | (AVB) | Financials | 332761 |
| Nyse Euronext | 0.46 | (NYX) | Financials | 1065466 |
| Discover Finl Svcs | 0.45 | (DFS) | Financials | 2219272 |
| Unum Group | 0.45 | (UNM) | Financials | 1357091 |
| Genworth Finl Inc | 0.45 | (GNW) | Financials | 1996836 |
| Ventas Inc | 0.44 | (VTR) | Financials | 639886 |
| Comerica Inc | 0.43 | (CMA) | Financials | 710732 |
| M & T Bk Corp | 0.42 | (MTB) | Financials | 339183 |
| Keycorp New | 0.42 | (KEY) | Financials | 3585123 |
| Hudson City Bancorp | 0.38 | (HCBK) | Financials | 1934436 |
| Xl Cap Ltd | 0.38 | (XL) | Financials | 1396542 |
| Kimco Realty Corp | 0.36 | (KIM) | Financials | 1652236 |
| Plum Creek Timber Co Inc | 0.35 | (PCL) | Financials | 664639 |
| Prologis | 0.34 | (PLD) | Financials | 1936111 |
| Slm Corp | 0.33 | (SLM) | Financials | 1979122 |
| Peoples United Financial In | 0.33 | (PBCT) | Financials | 1516266 |
| Health Care Reit Inc | 0.31 | (HCN) | Financials | 504921 |
| Legg Mason Inc | 0.31 | (LM) | Financials | 663751 |
| American Intl Group Inc | 0.31 | (AIG) | Financials | 551011 |
| Cincinnati Finl Corp | 0.28 | (CINF) | Financials | 665026 |
| Huntington Bancshares Inc | 0.27 | (HBAN) | Financials | 2924594 |
| Marshall & Ilsley Corp New | 0.27 | (MI) | Financials | 2150149 |
| Torchmark Corp | 0.26 | (TMK) | Financials | 338294 |
| Moodys Corp | 0.26 | (MCO) | Financials | 802692 |
| Leucadia Natl Corp | 0.26 | (LUK) | Financials | 774779 |
| Assurant Inc | 0.25 | (AIZ) | Financials | 475616 |
| Cb Richard Ellis Group Inc | 0.25 | (CBG) | Financials | 1103250 |
| Zions Bancorporation | 0.24 | (ZION) | Financials | 654518 |
| E Trade Financial Corp | 0.18 | (ETFC) | Financials | 7777219 |
| First Horizon Natl Corp | 0.18 | (FHN) | Financials | 919652 |
| Nasdaq Omx Group Inc | 0.17 | (NDAQ) | Financials | 604367 |
| Apartment Invt & Mgmt Co | 0.15 | (AIV) | Financials | 478432 |
| Janus Cap Group Inc | 0.13 | (JNS) | Financials | 748817 |
| Federated Invs Inc Pa | 0.13 | (FII) | Financials | 362389 |
| State Str Instl Liquid Resvs | 0.05 | 85749P9A | Unassigned | 3226709 |
| U.S. Dollar | 0.01 | CASH_USD | Unassigned | 714112 |
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