May 5, 2009
Dear SEC Boardmembers
The little people salute you for allowing us an open comment period on the short selling issue. I will be brief.
Short selling is vital to the markets increasing liquidity and dampening exhuberance. In the 70 years of the uptick rule, bears were still able to make money on market downturns and on carelessly run companies. This is as it should be.
The '07 mistake was in fixing something not broken. Bears can show no harm done by the uptick rule up to that time, but the Bulls can show harm since then, and I believe studies will bear this out. Pun intended.
The market was set for a crash without the help of any short sellers. Optimism became over-enthusiasm. It was a bubble, and it burst. However, the shorts were freed of the uptick rule, and more importantly, they were allowed to sell stocks naked. Enforcement of existing regulations was pathetic, and any rule changes the board make are empty promises to the investing public without including and doling out penalties.
We want some Lehman Bros. naked-shorts' heads to roll.
Thanks for the forum. Dan