May 4, 2009
It is about human emotion. That second of hesitation after a stock trades up, those questions that flash through the mind. Is this the first move up (up tick)of a hundred moves up? That brings the thought of risk back to the forefront of the short sellers mind even in the face of the worse economic times. We got rid of the up tick rule when times were good that was not when we needed it most. Good times where not what caused its creation, it is the bad times. The bad times are when it is needed to prevent the total destruction of wealth when we can least afford it. Capitalism need a mechanism to raise capital in order to function does it really need a hyper efficient mechanism to destroy it?
Bring back the original up tick rule. The people that looked in the face of the great depression had vision.