September 16, 2008
I must confess the SEC looks like it has been busy text messaging to goodness who knows who, instead of driving the train and protecting the market against abusive naked shorting practices. Another big market train wreck yesterday with the Dow down 500 pts. That was a great emergency order protecting 19 financial institutions for 30 days, issued a couple of months back. It worked. Unfortunately, since the order has been lifted, we now have two financial companies that are wards of the state, one out of business and another bought up at a fire sale price. How convenient for this debacle to occur just before the election, with the taxpayer getting skinned by the two GSE bailouts. In the next emergency order(s) to be issued,please take action to ban all short sales outright for a year since the past record in dealing with "naked shorting" has been abysmal. One year should give the markets time to work thru the credit problems that are out there. Then, when you subsequently do again allow short selling to resume, put teeth into the rules against "naked shorting" and provide jail time for those that are involved in this practice, when there is a failure to deliver shares. Concurrently, the uptick rule should be reinstituted with the uptick amount set at $0.50. In the meantime, I personally have no interest in investing in the stock market until you level the playing field so that the small investor has a chance. The way the market is currently being regulated, I feel I have a better chance in Las Vegas with the casinos than with today's stock market today.