May 8, 2009
Regarding the uptick rule: I retired from the brokerage industry in 2005. As a senior broker with Raymond James Financial and previously with Smith Barney since 1971, I have seen how the uptick rule helped prevent significant disaster in the down markets of 1973-74, 1982, 1987, etc. I will never forget the complaints of fellow brokers (who were shorting the market) regarding having to beware of the uptick rule while they were putting on their shorts. This rule prevented these brokers from literally killing the price of a short using the bear attack techinique.
Some of these same brokers participated in the bear attack on Bear Stearns and Citigroup in 2008. They made a fortune. Since they were on the correct side of the market regarding these positions, they had every right to make that fortune. Upon discussion with them, to a man, they said "thank God the uptick rule wasn't in force."
I truly believe that the lack of the uptick rule was one of the significant drivers of the 2008 market crash. If the rule was in force, we still would have had a down market, but, in my opinion, the downdraft would not have been as severe.
Please reinstate the uptick rule.
Irwin Glazer