U.S. Stocks Drop on German Ban on Naked Short Sales; Euro Falls

Capital flows are fast and efficient. As the velocity increases, a nation's ability to control its money supply and currency is dwindling. The more confidence erodes, the more Western governments’ plans or programs to control their markets will be broken. Capital markets are simply too big and efficient to be contained.

“It brings more uncertainty to the market,” said James Paulsen, who helps oversee about $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “There’s a negative reaction to anything that regulates or disallows any kind of trading. We tried the same thing in the U.S. too. I don’t know if that really worked.”

Source: bloomberg.com