March 18, 2009
To Whomever Gives a damn about reality and the structure of the free markets,
Regarding the implementation of new rules pertaining to trading-specifically centered around the notion of the "uptick rule" and "short sale price tests":
The SEC should restrain from being a trading rule maker for the "free markets".
Stop trying to create Imbalances by advocating rules that in essence not only create bubbles or the beginning of, but also discriminate against free trading itself.
The SEC is nothing more than an enforcer of laws and a structure of police for the markets, charged with implementing regulation that will keep the trading field even.
Your actions, or rather inactions on insider trading, naked short selling and Fraud are of Epic Proportions. Now you will take the time, out of your restricted schedule, to establish an up-tick rule or ideology that will in fact put in the foundation of a migration of capital from the markets and at the same time for the next big bubble.
Please refer to the action undertaken by the SEC with regard to banning Short Selling on Financials a few months back, and the decline of Historic Proportions that ensued after the initial rally. Did that fundamentally help “uhe markets”!or theeconom ..or did it actually accelerate the decline after creating a false impression on the health or tangible valuation of those particular financials?
How about ENRON..QUALCOMM…uo mention just a few of the Publicly Traded Companies the SEC failed miserably to investigate until Short Sellers started to put pressure on the Stock
I have seen letters posted herebeggin andimplorin certain officials to bring back the uptick rule for various reasons. I have even seen arguments so degenerated in nature that advocated that the “semoval of the uptick rul contributed to the decline of our Economy. My question is: “Thould individuals that make such infantile assertions, without any type of material evidence or empirical data of substantive tenure”- be allowed to invest
I think the SEC should concentrate more on education for investors and traders, with an accent on basic Economics in Free Capitalist Markets and the mechanics of Trading in those markets.
My advice to you is to live the uptick rule to a communist-socialist system where the orientation is of common default…uhings are only supposed to go up, and anything that thinks otherwise should be sent to the gulag.
RE-Implementing this rule will not deter short selling, and will not change the velocity of trading no matter what amount you will attach to it, but rather it will create a fake plateau that will add weight on itself. I think we all know what happens when eight is compressed on top of a house of cards, the reminiscent FLUSH!!!!!! Is starting to ECHO again in he background.
Rather than altering the structure of the free markets, commit to education, implementing the rules surrounding naked short selling-and buying from the options perspective and go after the people that actually commit Fraud in the system.
Yours truly,
Adam Smith.