Subject: File No. S7-08-09
From: Richard Eckhardt
Affiliation: Engineering consultant/Investor

May 5, 2009

The uptick rule must be reinstated for stable markets

The uptick rule was created by wise regulators in the 30s and we have not had a depression in 75 years. It was repealed, and we have a depression almost immediately. The investigation of its usefulness was done at a time of a monster bull market when the uptick rule was irrelevant. The purpose of the rule is to reduce irrational panic when the market goes down.

The uptick rules counteracts the asymetry of human response to fear vs the response to elation. A small amount of fear is self-feeding and can cause a dramatic crash in market prices. A little euphoria will not cause a corresponding explosion of market prices. This human reaction is not symetrical, so the regulations should not be symetrical.