May 26, 2009
I believe the proposed rules should not be put in place. The general propensity of todays market is to rise. Bad companies are eliminated and replaced by other companies. Sell-offs are sparked by fear and although short sellers may magnify a downward move they also magnify the corresponding upward move thereafter. During times of great fear when sellers are the majority, short sellers may make up the majority of buyers following a downward move. If there are abuses to the system, then the abuses should be cleaned up. I cant imagine that the abuses would apply only to downside moves and not upside moves. It would seem logical that investors would have less to say about upside move abuses and would naturally try to restrict the downside only.