April 17, 2009
There is no need for an uptick rule. During the late 90's there was no downtick rule in order to buy stocks. There is a clear bias being communicated here that we all want are stocks to go up. That bias will cause people to change their behavior and cause the market to be something other than a free flowing market. We all saw what happened when the govt restricted short sales completly in the financial stocks. Many unintended consequences.
There is no uptick rule in place now and the market is stable and actualy going up. The shorts provided a service in helping to uncover this financial crisis. Where would we be and how much bigger would the problem have been had it taken longer to uncover the crisis? Most of these firms acted in a greedy manner and should have gone bankrupt. Again we are blaming the shorts for uncovering the fraud of these firms instead of blaming the firms for causing this crisis. This again is the problem. Blame the messenger and not the creater of the financial crisis.