This is crazy and so wrong. I believe this is just the tip of the iceberg.

Davford, Wasselonne, France

We're here, Joris in Holland. It's hard to be offended by the nattering of anonymous Euros when our checkbooks are being violated.

What would you prefer? Additional market chaos? The US taxpayer is being forced to bail out the world financial system. Great.

Thomas, Austin, TX, USA

So bailing out the US financial organisations will end up costing the US treasury around $1 trillion, which is around twice the cost of the Iraq war or 7.6% of the US GDP. That's $3,000 per Amercan, and will require either a 30% cut in government spending this year or 10% increase in national debt.

Tim, Edinburgh,

Even if it costs a lot to buy out of this mess it's still worth it, the American (and UK) economy has benefitted massively over the last 20 years due to the hard work of the city bankers. Plus the cost to buy out will be less than the cost of years of uncertainty and recession

jack, london,

Fall on their swords Adrian? Are you suggesting some form of "forced skewer"? I've heard some talk, that only those to blame might have to pay after all.

Tony, London, England

The transformation is complete - from free market to fraud market! Discredited in every sense of the word. There may be some grown-ups left who can sort out this mess, but don't look for them among the generation of shysters who make up the current US and UK political and financial establishments.

Guy Brown, London, UK

A correction in terminology; up to $800B has not been thrown away; it has been put at risk through investing it in securities that have gone soft. Much of that money will be recovered, there will likely be losses, or a tiny chance even of profit. How much depends on the real estate market recovery.

Kevin Finnerty, Atlanta, USA

Tony, what a brilliant idea. We could all also wear a yellow star to identify us in public. The only downside might be thousands more people unable to repay their mortgages, more banks failing etc... mind you then we could all take a pay cut to say 3p a year!

Richard, Leeds, England

Absolute lunacy.

Shorting isn't the problem. Hedge funds aren't the problem.

People choosing to get mortgages they can't afford and who won't move out of the assets that they made their poor investment decision on, and governments who won't let companies (or the above individuals) fail, is.

Laura Roberts, London, UK

When are we going to see some heads roll ? Many directors of UK banks who allowed this idiotic situation to happen should be forced to fall on their swords. It appears that they will be paid off handsomely. Mr. Andy Hornby (HBOS) will walk away with at least £ 2 m . How mad is that?

Adrian, London , UK

IMO, main street should also take the blame. Many people take loans which in reality they know they can't pay in the end. The banks and other institutions allow this because of their own greed. So, what happens in the end, it all comes around,and we all have to pay!

Ann, Pasadena, CA , USA

Why am I reminded of that game a baby plays. It
throws its rattle out the pram because it knows
mother will pick it up again........

Dangerous road to go down.

and now HBos has maybe been sold off cheap.

And our public finances are shot.

M walker, Nr Bromsgrove, worcs

The thing that make me angry is that all these financial institutions and politicians are riding on value imparted to a piece of paper (money) by hard working people. They build value and generate wealth. These theves in finacial "industry" play games with that.

sena, boston,

What did Brown proclaim "The economy is safe in my hands" and "There will be no more boom and bust". Any more? And now he is theman to get this country out this mess. Isn't he just!

Romans Seja, Billesdon, UK

Suprising how a story about the FED's move to support the banking structure which could have (and may yet) plunge the worlds Financial system and Economy into a darkness not seen since 1929 reaches comments that assume everyone in Banking earns mega bucks and takes excessive risk.
You know nothing

mark, Thorpe-Bay, Essex UK

This is the most disgraceful white collar crime perpetrated n history, hundreds of billions of dollars stolen from the US tax payer. Because of the temporal disconnection between the actual theft and the perception of the loss, the perpetrators will not have to pay it back or indeed get punished.

Simon, Epsom, UK

it seems to me that bailing out the banks may well just be delaying the inevitable. after all the banks stil have to pay back this new government debt dont they. isnf flooding the market with debt what caused the problem in the first place?

will, grimsby, uk

shorting isnt the cause of the problems, it is just a symptom. after all people are banning people from selling banking stocks are they? after all, all shorting is, is betting that people will sell a particualr share isnt it.

will, grimsby, uk

Untill all taxpayer support to the finacial markets have been repaid with intrest, nobody in the financial sector should be paid over the equivelant of £25000 per year inclusive of bonus and pension. The losses must not be made good by mortage theft by increased margins etc.

tony, yarmouth, britain

Socialism is BAD... except when it helps to bail out your buddies using government i.e. taxpayers money....

A. Khan, London,

Call me simple minded, but who is going to pay for all this bad debt? How many more hugh hits can the government take before it begins to default on its loans? I know now we're just paying on the interest of these huge loans keeping the country running, how much is the interest on a $285bil loan?

vince, Pittsburgh, PA, United States

A short term solution for a long term problem and with the U S Government putting up to one trillion dollars into the markets this has simply sugar coated the problem and not solved anything
What the tax payers have done is hand out a bonus to all wealthy corporations, executives and investors.

william thomson, lincoln, uk

...great, i thought the market was a market? or is this a real admission that no such free market ever existed, just a facade. why should the taxpayer bail out the prats who made these greedy and silly mistakes? talk about a lack of responsibility being rewarded, it's time financiers grew up.

Dr Smith , London, UK

There was an article in the paper yesterday about a loan shark sent to jail for not checking if his customers could afford the loans....some irony here ? No one has been to jail yet over whats happened to the banks ! They have all been paid off !

kamlesh parmar, London, UK

To the people asking why shorting isn't banned altogether, it's quite simple. Banning all shorting would prevent banking/government institutions from keeping oil/gold/silver prices artificially low with massive shorts. They would rocket in price to their true current value if left alone.

steven pill, bedale, uk

All the markets do is measure peoples' perceptions of value. How many people would have bought shares in HBOS a few days ago. I guess very few. You cannot blame the system for doing its job well. Shorting can be used to hedge against risks taken. This is only a good step during the market hysteria.

Stuart Broadfoot, Cambridge, England

Margin trading must also be banned. Unless this happens one way bets will inflate the next economic bubble. The problem's size beggars belief and the funds required will bankrupt the Western World. Banks should be forbidden from carrying liabilities off balance sheet and be properly capitalised.

Alan, Salina, Malta

After all is said and done, one sad truth prevails: banks make risky loans, if they go well they keep the profit, if they go horribly wrong - as they have - the tax payers cover the loses. If only I could get the same deal for my business...

Stewart, Beijing,

The USA taxpayer is being forced to buy crap for cash.They will pay higher taxes and have less on public spending for years to come......The UK is next.....then the hype for recovery follows and people will probably believe it and rack up more debt in the name of "growth".The mugs cycle restarts.

shaun, Blackpool,

Bad debt purchase? I think Americans can look forwards to a can of baked beans costing between $5 & $25 - gallon of gas maybe $100! Depending on whether other global economies hang the dollar out to dry and nominate a better medium or all join in with similar measures. Good luck to all good people

NDG, Tokyo, Japan

It is obvious that the world would soon realise that the trillions of dollars they hold are backed by toxic debt mortgages and so capital flight from dollars would take place. Asian Central banks would off load US dollars and we would have another crisis which would be much more damaging than now.

JAY THAKRAR, SLOUGH, ENGLAND

Shorting is a part of trading. Without trading there is no investment. Banks need to get their fundamentals right.

David, Bromley,

Normally every article about the USA attracts lots of reactions of Americans being offended by someone or something. Where are they now, being ashamed maybe ?

Joris, Woerden, Holland

Mac in London,

You lend me your car that is worth £30k for 3 months for £1k, we transfer owenrship to me, in 3 mths back to u.

I thn sell the car for £30,000. 3 months later I buy the same car back for £20,000 and give it back to you with owners rights.

U made £1k-3mth depreciation, I £9k

Dan, London,

The dollar will freefall.

Chris, London,

HBOS shares were NOT shorted. 3% of shares were out for shorting at the start of the year. 5% were out for shorting when the shares were tanking. I presume Mr Brown knows several other UK banks are in trouble so thought to stop shorting for these.

Matt Mathers, London,

right at the moment it's exacerbating other problems so curtailing it temporarily is a sensible move on the side of caution.

Richard, London,

To James in Burnham, England and Simon in London, UK; you come across as a pair of greedy capitalists disguised as outraged and opressed '1984' citizens. Maybe the stock exchange actually really is just a clever casino, it's never too late to raise our awareness. Good luck to all good people.

NDG, Tokyo, Japan

A market where assets can be freely bought and sold is the hallmark of the capitalist system. It is what allows good companies access to capital to grow, create jobs and pay people. Good companies with solid fundamentals go up in value and band companies go down in value. HBOS was a bad one.

Mark, New York,

This whole situation has been caused by irresponsible lending and borrowing. The same thing happened in 1929. If all these company's had sound fundamentals then short sellers would not cause any problems.

Mark, Camberley, UK,

Absolutely right, Mr Petts. There are a lot of ignorant crypto - socialists in this forum. Short sellers would lose all their money if the target company was sound in the first place. Just look at HBOS. Why was there no queue of other banks willing to outbid Lloyds? HSBC looked and walked away.

Steve, Sutton,

Those who shorted HBOS early yesterday would need to buy later, in order to balance the book. When the price took off on the merger news, those greedy individuals would be nursing some monumental losses. But hang on a minute, you can bet its our pensions and the like that they are gambling with!

John, Leeds ,

This isn't about the convenient bogey-man short-term 'speculators'. This happened because our Congress for 20 years passed laws forcing mortgage-lenders to make loans to people that would not have otherwise qualified. They tried to do social engineering by interfering in the free financial markets.

Kevin Finnerty, Atlanta, USA

Its illegal to short shares and then start rumours about the company being in a bad state.

But its not illegal for the CEO of a company like Bear Stearns who owns a whole load of shares to stand up and tell the whole world that the company is in rude health a couple of days before it collapses.

Russ, London, UK

The american intervention means the end of the Free Market its a sad day.

Chopper, London, England

I find it interesting that people are shouting about selling something they don't have, but are quite happy to buy something when they don't have the money to pay for it (ie your house).

Two sides of the same coin I feel.

Neil Wilson, Halifax,

1989 Savings and Loan crisis - Resolution Trust Corporation at staggering public cost. 2008 Toxic Loans Crisis - Resolution Trust Corporation at what public cost.
Seems that bankers and governments have a depressingly short memory or perhaps no memory at all

Timothy Porritt, Leeds, England

"Morgan Stanley is believed to be in talks with Wachovia, America's largest bank". Wachovia is nowhere near America's largest bank. Bank of America is. Also, Wachovia's in even bigger trouble than Morgan Stanley. If there are any talks, it would be about MS putting money into W.

Nigel, Berkeley, CA, USA

i absolutely agree with james.

Simon, London, UK

To me, this demonstrates that the "crisis" was a crisis of confidence because the markets had been ruled by bully-boy short sellers - the lunatics had taken over the asylum - and had been allowed to thrive by government (i.e. tax payers') subsides on both sides of the Atlantic. Tax payers are still.

Bill Peter, Kuala Lumpur, Malaysia

I notice how suddenly short sellers 'borrow' the stock that they sell. Rubbish they sell stock they haven't got and to sell something you haven't got in the real world is called fraud. It is worrying that financial players including the regulator still haven't learnt this basis lesson.

Martyn Pickering, Puivert, France

So now HBOS and Loyds TSB should be kept separate instead of the law being changed, creating a monopoly and super bank that will be bad for the consumer and staff.

andy, winchester,

Why doesn't the FSA just tell us how much bank shares are worth?

Also who in the FSA is getting fired for not pre-empting this state of affairs? After all it's their regulations and controls that have allowed banks to be grossly over valued.

R, London,

Time for a windfall tax on these traders? 110% of the value of their bonuses should do the trick.

Mark, Cambridge, UK

They should ban all short trading for good. This shows how the system needs a total overhaul. Traders should only be allowed to sell if they already own shares. Had this system been in place the panic that caused the demise of a great financial institution (HBOS) would probaly not have arisen.

David Pearl, London,

Why wasn't this done a lot sooner than this? It would have saved misery and stress for countless people if the "experts" had gotten their act together when the BOE was given independence and the FSA was set up. Talk about closing the stable doors after the horses have bolted!

Ian Dickson, Brighton, UK

This ban on speculator's actions shouls also be permanent. If it's only a temporary one (until Jan 16th 2009) what's to stop them doing the same kind of things all over again? It'll be boom and bust all over again!

Ian Dickson, Brighton, UK

Why isn't it possible just to ban 'short selling' full stop? It serves no purpose other than to line the pockets of greedy individuals. Wasn't the general idea of shares a relatively long term investment in a company one believes in, (granted ethical or not), because society needs it or wants it?

m Walker, manchester,

market manipulation in terms of short sellling is immoral and is far worse than the restrictions placed upon it. it is preciciely your sort Mr Petts that has precipitated this crisis by the packaging of bad debt as safe investment...

phil , York, england

Will someone please explain how you sell something that is only on loan to you. Its not yours to sell in the first place, whatever the funky profit arrangements that come later on.

Mac, London,

Lots of traders about to see the harsh ( real ) side of life, best not order the New Aston Martin after all.

peter, Aldershot, UK

So, as banks struggle the USA steps in and offers support. Around the world prices of shares have rallied a little.
How comes the USA can see that government help is needed and as a result the federal reserve is helping, and yet around the world and especially in the UK, the treasuries can't act?

Jamie Brookes, london, UK

Good! If loosing freedom means recovering stability. So let it be. Freedom to steal and take advantage of others´ vulnerabilities ? Are you for that? So, you should also be against traders who are trying to bring down our economies. It´s about time that Governments step in. Regulations!

Maria, London, UK

As a lay punter, I am suspicious that any large group of influential traders who have a vested interest in prices going down, would somehow be able to ensure that it happened. It will be interesting to see how share prices change without that influence.

Pete, London,

So much for moral hazard. So true the old saying that if you owe the Bank £10 you're at their mercy, but if you owe £100 billion they're at yours. There is no such thing as a 'free lunch'.
We've put meat on the mat to keep the wolf from the door, but what about when he's eaten it.

dudley holley, Thorpe Bay, UK

If and it's a big if that this gets congress backing then the days of the us being the worlds reserve currency are well and truely over.
The plan has not been announced yet IT'S STILL ONLY RUMOUR.

robert, havant, uk

Odd that Govts who never have money for health, education, transport etc, rush to bail our their banking friends. Equally strange how failing banks who call for Govt help as they lay off thousands manage to find millions to pay off CEOs and senior execs. Doesn't seem quite fair does it.

peter fieldman, paris, france

short selling is market disciple to weed out the weak. US have banned it to protect MS and GS from overseas ownership; UK has banned it because our govt is broke. Sure there is collateral damage, but in reality a ban allows UK and US to limp on and avoid changes that are necessary.

manav, London, UK

Yes, it just a hope. What would you do with spare cash (if you had any)? Put it in safe havens and totally risk free places. Trillions of dollars must be heading this way, making bale-outs trivial. This will lead to a boom in basics, which will achieve what aid has not to the poorest..

Chris, London,

Surely... these stock rises are due to only the speculation that the ban on short selling will work and that the US will be able to come up with a workable bail out plan. It's too early to know the real impact.

Michael , Northampton,

Just when the government imposes a ban on short-selling, they should as a balancing act forbid margin trading.

Just when you are laying blame on short-sellers for creating this credit crisis, you should also scold those who helped push the global stock market indexes to unsustainable highs.

Chris, HK,

Surely the US government taking on all of America's toxic debt, on top of all the other bailouts, will make it a financial basket case? So much for moral hazard. The banks make billions for years now the US taxpayer is having to pay back those billions. What a con, it is unbelievable!

Simon, Epsom, UK

Dear Mr. Petts,

Market manipulation? Yes, you're right, when a group, or even an individual - thanks George Soros - can undermine a business by selling shares they do not own to push the price down and perhaps completely destroy that business and the jobs of those who work there it is abominable.

Alan Davidson, Bournemouth, England

Your analysis is badly flawed. Your article correctly states that banking shares bounced worldwide (Australasia, the Americas and Europe) on the back of the USA's decision to absorb toxic debt; yet you claim the reason shares in London surge is because the FSA bans short selling? No it isnt pal.

MartinC, Twickenham, UK

Well then, James E Petts, let's take an enlightened view of these financial muggers, who spread misery and destroy the livelihood of millions, and make the practice illegal. Once it was legal to trade in slaves, but the world has moved on.

Theo Potter, Basingstoke, England

To Mr Petts in Burnham; destroying peoples' life savings held in pension and other funds is not "oppressive and dangerous", then?

Bill Peter, Kuala Lumpur, Malaysia

This will end badly. A market where you can buy but not sell is a one way bet to overvaluation, which is already the problem due to huge leveraging on hidden debts.
What is going up will come down, very hard.

David Martin, Bristol, UK

“People that are short haven’t done anything wrong and now they’re being victimised for it,” ???

Hilarious.

Jon Moxey, London, UK

Of course it is right Mr Petts for the government to intervene. Short selling is not investment just a manipulation of the system and it is right to stop it.

P.R.Brittain, Wolverhampton, West Midlands

well now the short selling has been stoped, (should have been done ages ago), perhaps HBOS should now reflect on its position again ( Its shares haing rebounded ) and pull out of the deal with lloydstsb who lets admit were only jumping in to pick up HBOS on the cheap!!

Gary, Telford, UK

Mr. Petts, the whole SYSTEM isn't "legitimate"! If we as individuals engaged in the fractional reserve lending activities of major financial institutions, we would be rightly prosecuted for fraud!
Government intervention (on our behalf) is not only desirable but also long overdue!!!

lee, Paris, France

I do expect to see lots for comments appearing here and elswhere decrying the curtailment of individuals right to free enterprise, however shorting is a mechanism that is just TOO open to abuse.

Still if I was raking in millions a year from shorting or even dare I say it "bear raids" I'd moan.

Shortie, Edinburgh, Scotland

And bankrupting the financial sector isn't dangerous at all?? Just because a 'technique' has been legal in the past doesn't exempt it from regualtion, when anyone with an ounce of common sense can see how destructive it is. It's just betting to lose - dressed in a nice suit.

Mike, Bath, UK

It is not a legitimate exercise of governmental power forcibly to oppress people's liberty to engage in what the government admits is a legitimate means of investment. Market manipulation of this sort is oppressive and dangerous.

James E. Petts, Burnham, England