February 1, 2009
Dear Chairman Mary Schapiro,
One significant error in judgment of the last Administration was its withdrawal of the uptick
rule. It led to unnecessary ravages in the financial markets. Sound stocks have been damaged.
Pension Funds, personal savings and more have been decimated. The question is to whose
gain? It is time to craft rules to protect the average American and their savings.
The singular purpose for having a publicly traded stock market is to facilitate capital formation. The question you have to consider is whether you want to continue to allow the fast track capital formation tactics of short sellers to destroy the incentive of the non-professional investing class to invest or continue to invest in the stock market - people like me and my wife who have forty years of savings produced by our own work invested and at risk in the stock market. Those savings, amassed over decades by living within our means, have been repeatedly ravaged by the abusive insiders who whipsaw the capital formation markets and consequently destroy our capital.
There is no way to anticipate the short sellers' raids to our knowledge. When insider short sellers' capital formation through raids on companies destroys us outsiders' capital, we exit the stock market, concluding that it is a rigged game for insiders - which it certainly is at present - and we may never return. We end up protecting our assets more and more through purchasing bullion or other hard assets.
When we exit, capital formation is reduced and economic growth, industrial growth, tax revenue growth to use to build or renew necessary infrastructure, and national security all suffer as a consequence. Will allowing continued abuse of capital markets by abusive short sellers result in a healthier capital formation market or will ignoring these necessary protections result in further destruction of this country's capital formation markets
I wish I could trust any those of you in the financial sector of government, but my skepticism has grown. Actions speak louder than words. Act. Someone needs to! Please reinstate the