Also, to think that short sellers can relentlessly sell a stock down lower is absurd. Just in this past week, I tried to sell short several stocks with IB that were not available for short sale. Shares have to be available to be sold short.
it would take a calamity to get a government bureocrat to go back, admit he was wrong and change his decision, cox aint going to do it, government just dont work that way. no uptick is here to stay
I just watched the video and here are my observations: Cramer is constantly rubbing his hands together like some "evil" guy trying to plot some sort of scheme to pull something over on people. Cramer said he would be able to mint money the short side hand this been in effect when he ran a hedge fund, if it is truly that good, why doesn't he go back and do just that? Cramer said it is as easy as selling 500k of shares and you can make a fortune on a bear raid. I am sure those that sold GFIG or LEH or IBKR on Monday and didn't cover their shorts are really hurting today. The fact of that matter is that if a company is being run into the ground by the exec's that stock is going to zero regardless of what rules we have in place. If the company is solid then it doesn't matter how much you short, you are likely to get smoked. He mentioned it was impossible to get short without an uptick prior to July of 07. It is funny, because as you all have stated, if you are a pro trader, the uptick didn't matter. There were so many techniques available to get around this. And yes, hedge funds used them. He is essentially blaming all his inaccurate calls on short sellers. He used several words that bring fear to people when heard, "Great Depression" "Republicans" etc. I remember the Enron trades, anything that was a utility went straight down(Uptick was in effect). I remeber the AIG and MMC spitzer trades, anything that was insurance went straight down(Uptick was in effect). I remeber the tech bubble poping in late 2000. ADI went straight down without an uptick for 10 pts(Uptick was in effect). I remeber 9-11, coming back, the defense stocks gapped higher and went straight down with rarely an uptick for 5-15 pts depending onthe sotcks(Uptick was in effect). Why is it now that it matters? This guy has lost all credibilty.
Cramer points out that the uptick rule elimination especially hurt the investment bankers and brokers. I checked out the 1 minute chart of BSC for 3/14/08 when the stock fell from 54 to 29. If the short sellers were pounding the stock down with huge volume as Cramer insists, I would expect to see one minute bars that have very little overlapping and huge volume on big down bars. Instead, the decline shows bars with consistent volume (no excessively large volume spikes on big down bars) and overlapping of almost all one minute bars showing that there were buyers and sellers and a two way market for BSC. In fact, some of the that buying had to be short covering. What hurt BSC was being leaveraged to the hilt and not having adequate risk management. It was not due to "bear raiders".
This is more of your BS. Do you even trade on the short side? I do, and I am an "individual investor." It is just a tool I use to hedge myself to prevent losses. Elimination of the uptick rule has eased the process of hedging for my portfolio. Instead of complaining about how the repeal of the uptick rule is crushing companies (which is not provable and in my opinion is false), how about you use it as a tool for your own portfolio?
I thought ET was a site for traders. Obviously the non traders, the buy and holders, have seen their positions lose value and do not believe fundamentals caused the market downturn. They see nothing wrong with the mind numbing stupidity of companies like Bear Stearns over leveraged, 30 to 1 on bad debt instruments that wiped out all of their capital. They need to blame something they also don't understand, the uptick rule and shorting. This is the worst financial crisis in decades and the market is only down a paltry 12 - 14%. The uptick rule reinstated will not protect you. For any fool that has lost big on an individual stock like Bear Stearns, the rule of thumb, especially for non traders, and those that cannot tolerate much loss is to not have more than 4% of total assets in any one stock. ( So what do they do? They put it all in one industry or sector!) Stocks will always collapse regardless of uptick rule or not. What is Bear Stearns WORTH, $2 per share? Maybe that is why the price fell! It fell because of short selling!? Well, Cramer said so! Drama Queen Cramer "claims that the repeal of the uptick rule has been a major component in the current market downturn, partially blaming it for taking the Dow from 14,000 to 12,000." He is beyond irresponsible. Deflecting all the blame on his bad calls and not even directing it to the proper cause. Can we get him fired? Imprisoned? His groupies will then write letters to Congress with tears smudging the ink.
Interesting you guys quote the SEC when it suits you. Patrick Byrne said in an interview employees at the SEC had "pre loaded Debit cards". The SEC is corrupt. you can't have an organization that size with just a few guys doing this, and think everything is ok. What in the world would be the reason of repealing it? Only one. It aids the hedge funds. Simple. Before you guys post, read the previous posts. Long term for me is two days. It's not the point. and for those that say Patrick Byrne crazy, try to find "exact pay" or First bank of Curaco on the web You can't. They wer e shut down. We're that close.
Even if Hedge Funds do benefit from it, it still levels the playing field. Either everyone has to obey the uptick rule or no one. Why does it matter if Goldman Sachs and JP Morgan can short without a downtick, and a hedge fund can't? What Goldman doesn't have enough money to bury a stock? Your argument has no merit I'm afraid. Naked shorting is a much more harmful practice. There are only so many shares available to short. You also mentioned earlier about subprime. Subprime was a creation of the banks. The downfall of Bear Sterns and the others is only because of mortgages they had left in inventory. They were peddling these crappy CDO's to pension funds and foreign investors who lost trillions of dollars. Oh poor Bear Sterns, these crooks should be put in jail, even I knew these mortgages were worthless and I'm not an investment banker. That is fraud, and all the banks did it, Goldman even had the balls to sell these crappy loans and go short them at the same time. And this was AAA paper. The public needs to be protected from the banks a hell of a lot more than from hedgefunds.