February 28, 2009
I know this will do no good and I am not even sure who is receiving this e-mail. I have called he Presidents toll free number and complained twice, but the people did not have any concept of short selling or short funds. I think it is just some kids they hired to listen to people complain and I am sure that is as far as it goes. I e-mailed the SEC chairwoman a month ago and never even received a form letter e-mail response or anything. I e-mailed VP Bidens Middle class America site and never received any response at all. It seems that you would at least send an auto response to the e-mails to make people at least think someone looked at their e-mails. I have called both of my US Senators in NC. Ms Hagan's office I called twice and an intern answered and had no concept of the market or short selling and I never heard anything back. I called Mr. Burr's office and did get a call from someone from his office and she said they agree with me, but it is up to the SEC and the President to take action. They actually called back the same afternoon, about 5 or 6 hours after I called them which I thought was very impressive and at least showed someone was listening.
My complain is about the STUPID short funds that came into being after the Bush Adminstration got rid of the Uptick rule. I am in bad health now, I had Ulcerative Colitis and had an expermential surgery 6 years ago and it went very, very, very bad. I spent over 400 days in the hospital and now have short bowel syndrome, arithritis (never had it until the 7th surgery) am dehydrated every morning and have a collostomy bag that will not work because part of my intestines are open and the flange will not stay on which causes the bag to come loose and I do not need to say what happens then, but you are not able to work at a job when you have stool pour out all over the place once or twice a month.
I did not want to file unemployment and after working 20 years and saving just over 200,000 and inheriting 300000 when both my parents passed away (my Dad in 2006 and my Mom of Cancer in 2007), I figured I would be able to manage my money and at least make enough to get by and hoped I would be able to get some kind of insurance when my Cobra runs out (July 09). I have watched the market everyday since then and no matter how sick I may be in the mornings I can still cut the tv and computer on to keep up with the market. I really did not want to daytrade and do not really have the energy because of the dehydration, but I am not stupid (I have a BA degree in Economics) and I can see what is going on.
The short funds are designed to ride the momentum down with many of them being doulble and even triple leveraged. I have not lost as much this year because of these funds because I finally started jumping in when the momentum started down and have made some of the money back I have lost in my long positions. What these funds are being used for is to scare people out of the market by causing panic. The average Joe or the Middle class American that you and President Obama are claiming to help are getting completley screwed. The market always goes down when we have a down turn in the Economy. People understand this, but they do not know why sometimes on NO NEWS their company stock or sector fund goes down 10 to 15% in one day!!!! This is happens when the big money shorts decided to get out of one sector because they have crashed it to almost nothing and it is time to go to another sector and the momentumn players follow and BAM it just snowballs with stops getting hit and people throowing in the towel and all this does is cause the stocks to lose 30 to 40% in one week. This happen this week when the fininacial stocks which are a favorite to short were so low and news came out that the Govt. may do something to help prop up the price of banks. What happen was the same thing as last Oct-Nov, they got out of the finiancials and started shorting the Basic Material funds.The steel stocks (X, NUE....) were all down 10 to 15 % on Monday alone and ended down over 20% for the week on NO NEWS. Nobody reported earnings or even gave any new guideance, they were just caught up in the short game! All you have to do is look at the volume of the SMN and other short leveraged funds. Just look and anyone can see what happen again.
This is so unfair ro the average American who puts money in a 401K and are not allowed to buy Short funds and are working and can't daytrade and does not understand why their stock or fund just lost 20% for the week! George W. Bush and Chris Coxe caused this and it is now up to you to stop it. If you want things to be somewhat fair for the average investor then STOP THESE FUNDS FOM TRADING ASAP!!!!!!!!!!!!!!! Bring the uptick rule back, you job is to do whatever you can to calm the markets down in tough times, this would slow the disaster down!
I do not think you know how bad you are hurting the average investor that has index funds and some company stock in 401K's. Of course they were going to take a BIG hit, but you do not need to let big short hedge funds and momentun daytraders make it worse than it should be. Everytime people see the market crash and hear news about the record low since whenever you get more and more average Americans to withdraw all their 401K money (which continues the downward selling) and we will NEVER get these people to reenter the market again! All the hope people could save with a 401K and releive some of the pressure of Social Security in the future is going to be all but gone soon. Once these people get out it will be like the 1940s and 50s when most Americans did not trust the market and would never invest at all. You need to stop people from profiting from causing panic, these people have been very succesful and will not stop screwing the average investor until you stop them! George W. Bush and Chris Coxe started this, but they can not do anything about it now, only YOU can!!
I am not saying we should stop shorting. That was a stupid action last fall when the Govt made a list of stocks that could not be shorted anymore. (Check out the stocks in the Basic Materials funds at that time and see what happen to them!!) What we need to do is stop the short funds that people get in at the first sign of the market going down. If you have to bring back the uptick bring it back!! Just because 90% of the average investors do not understand what is going on is no reason for you not to act. This would be the best thing to try to CALM the markets down, and it would more than likley help consumer confidence overall because most people whether they have any stocks, 401Ks or IRA's still think the stock market crash of 1929 is what caused the Great Depression. You also know if you get rid of the short funds that we would have a pop in the market with people covering shorts, but it also would stop put a stop to people manipulating the market to the downside in the future which I think would be enough to at least keep some people from panicing out of the market. Once the people get out they have no chance of ever recouping their money because they will never come back.
Ted Kelly
Charlotte NC