April 21, 2009
I feel that it is important to reinstate the uptick rule based on last price. The rule worked well as it was initially enacted years ago. Circuit breakers or application only during stressful market conditions would be a joke. You have to have rules to stop the short sellers from sending a company into bankruptcy
The SEC also must enforce the rules against naked short-selling. Hedge funds, mutual funds, insurance companies, brokerage firms should be reporting all short positions above 1% of a companies outstanding stock, on a weekly basis.
Also the collateralized debt obligation market must be regulated so that short sellers are not able to short the CDO's and raise the cost of borrowing for the companies they are targeting. That contributed to the rapid decline and forced selling of bank stocks and should be outlawed. (many institutional investors can not hold stock once a companies debt is downgraded. Rating agencies downgraded based on CDO prices collapsing...that forced the sale of stock and played into the hands of the short sellers)