April 20, 2009
Do the uptick rule AND circuit breakers. And prosecute illegal naked short-sellers.
Unlike investors, short-sellers are not the owners of our economy. They're just gamblers. When several hedge funds act in concert and when they are allowed to sell stock not even in their possesion (naked shorting), they can ruin the entire market. That's what has happened over the past 6 months. The price volatility they have been allowed to create is disgusting, especially for the average person who has been encouraged to invest in stocks for his future retirement.
Exchange Traded Funds make shorting the entire market too easy. The SEC should stop allowing ETF's to be short-sold. This will protect investors from excessive volatility.