Subject: File No. S7-08-09
From: Anthony F Herbst, Ph.D.
Affiliation: University of Texas, Emeritus Professor of Finance Economics

May 7, 2009

Before the uptick short sale rule was sacked, we were a "buy and hold" investment economy. Now, without the uptick rule on short sales, we are a casino economy with extreme price volatility in stocks that is disconnected from the fundamental prospects of company sales growth, earnings, etc.

It is imperative that a short sale uptick rule be reimplemented and enforced if the stock market is to again reflect economic fundamentals instead of a gambling casino in which short sellers can ambush companies with impunity, driving the shares down simply because they are selling and not for any other cause.