September 29, 2009
RESTORE THE UPTICK RULE AS IT WAS ALWAYS INTENDED. THAT IS: SET THE RULE BY PENNEY INCREMENTS.
Goldman Sachs has exploited its privileged position enough.
They don't need another custom-tailored facility.
I am appalled that Vanguard--which is supposed to be investor-friendly-- is against the uptick rule. Their argument is misleading and false.
Restoring the uptick rule is not a ban on shorting.
At this rate, there won't be any independent individual investors left.
The fox is running the hen house
.If the uptick rule adds to net trading costs of short strategies, so be it. That is part and parcel of its effectiveness as a brake.
And it always was.
Decimalization has not rendered the rule moot--not for thousands of instantaneous trades, by penny increments. The effect adds up. And it should.
If it didn't hurt, they wouldn't argue against it. Independent individual investors are not arguing against it.
Decimalization doesn't have to render the rule moot--unless you let it.
In ruling on this, you are ruling on whether you want to have any independent individual investors left.
The only "individual investors" will be those who pay fees to Vanguard and Goldman Sachs to do it all for them.
I saw what happened--as did the old-timers on the floor (first three minutes of this video segment):
http://www.cnbc.com/id/15840232?video=1279710087&play=1
[Here, Mr. Cashin, director of floor operations for UBS, explains that the uptick rule goes hand-in-hand with rules against naked shorting, and says: "There was an audible gasp down here... we thought for 70 years that naked shorting was illegal and you had to borrow."
What came as a shock to independent investors came as a shock to Mr. Cashin, too. The uptick rule and naked shorting are not separate issues. They are related.
Thank you for your efforts on behalf of common sense.
I encourage you to oppose the legal and financial sophistry of those who have been running the system so long, they talk like they own it.
Do they? I hope you will make it clear that they don't.
Patrick McDermott