April 22, 2009
Reinstating the uptick rule is a waste of time. How did the uptick rule work during 1987? Or in a more recent example, how did the ban on short selling select financial stocks turn out for the public? Let's see, there was a euphoric rally in all stocks and particularly financials. Anyone who bought that morning got absolutely decimated. As I recall Wachovia traded up to $25, how did everyone do on that buy? Buy and hold anyone? In short, it is not for the government to intervene in the market unless there is clear inefficiency. The inefficiency would seem the constant upward bias An excessively over bought speculative bubble, is not cause for the government to step in, let it burst. It is expected. How about going after CNBC and other "financial advisers" who schill garbage for a living. Jim Cramer has personally cost the american public an absolute fortune, with his constant buy recommendations. He is an entertainer who far too many see as a god. Purchasing stocks, whether through a mutual fund or outright is a gamble - there is no such thing as investing. Not all stocks go up over time. In fact many go nowhere or bust. The current emphatuation with stocks reminds me of the tullip bubble. Many companies (like the US Gov does with treasuries) simply use their common (T-Bills) as an ATM. When they run into trouble they just issue more stock (T-Bills). Sooner or later the jig will be up, uptick rule or not. Stop wasting your time on white wash issues and do your job of catching crooks. Maybe you can actually stop a ponzi scheme (and not just the tiny ones) early for once, instead of decades later.