It's mentioned on the second page of this NYT piece: http://www.nytimes.com/2009/02/23/business/23schapiro.html?_r=1&partner=MARKETWATCH -Guru
What's interesting is that a great many of the original SEC mavericks are surfacing again...whether that's a result of the BM scheme is questionable.. Nice find.
"She is exploring whether to impose restrictions on short-selling, a type of trade in which an investor profits on stock declines. One idea she is considering is the revival of the uptick rule, a regulation that prohibited short-selling while a stock is declining." What type of restrictions on short selling? Scary. The banks deserve to be priced where they are, the free market worked flawlessly.
Turn on your brain. This potential policy change is not just about the BANKS being priced appropriately . . . It's about slowing down the VELOCITY of the market. We are talking about publicly traded companies here, with boards of directors, employees, that produce a good or service, etc. - - - Not some sort of a commodity. In my opinion, former SEC Chairman Christopher Cox was simply yet another Bush appointee "flunkie". The guy had no clue. Either the most ignorant person on the face of this planet, or someone that was totally paid-off. One or the other. Take your pick.
So, leaving politics out of this, are you saying the studies done prior to dropping the UpTick rule were wrong? If so, why didn't anybody complain about them back then? If the studies showed abolishing the uptick rule would have no significant impact on the market, why reinstate it? Again, no politics in my argument, just curious as to why you feel the prior studies were incorrect.
I don't believe that these studies ( or at least some of the ones that I took a look at ) covered the effect of ETF's on the market. And from a purely subjective point of you, I think that one could easily argue that the stock market has frequently had days where the market collapses triple digits into the close (ie. the last 7 minutes of trading) . . . which I would argue would not be the case if you were not allowed to simply "machine-gun" down the bids. For me, it's really about slowing down the VELOCITY of the market.
i keep seeing questions like why didn't they complain back then re the uptick rule. not even taking sides for a moment, of course no one complained it was a bull market. no one complains about their adjustible mort until IT ADJUSTS. its a stupid question., stop asking it.,
Not a stupid question, only STUPID people complain about their adjustable mort when it adjusts. Just like only STUPID people expect the govt to bail them out of mortgages they took out with unrealistic property appreciation expectations. If there were issues with the methodologies used to examine the impact of removing the uptick rule, why weren't they voiced then? Just because someone (not saying you) can't make money in this environment, they ASSUME it's because of the uptick rule? Or we can assume it's because of all the black-box trading systems introducing too much volatility? Give me a break, if they want a return to the uptick rule I would like to know what EXACTLY they were wrong about when they decided to remove it. I hardly think that is asking too much OR asking a stupid question.
Gee let's see... Our detailed and thorough research has without a shadow of a doubt demonstrated that the uptick rule removal and simultaneous removal of collar 80A (put in place after 87 debacle) would have absolutely no impact on market volatility. Now go back and look at a 1 yr VIX chart post removal, and try to see how well that validates their detailed study. Coincidence that the same mechanisms used to prevent one in 100 yr fat tails, were removed right before the next one in 100 yr fat tail took place?
It's not a stupid question. You are correct. The rule was stupid because it was an attempt to bias the market to the upside. Biasing a market is what created the housing bubble. Since we still our all-knowing, omniscient government still hasn't learned that creating positive bias predisposes markets to bubbles (and it doesn't care to learn, as long as learning is not politically expedient), it will continue to create distortions. The question is why not a downtick rule for buy orders. Isn't irrational exuberance equally dangerous? The SEC study found that liquid stocks were utterly unaffected by the uptick rule when the market went to decimalization. In illiquid stocks, it caused the bid/ask spread to widen and sucked the liquidity out them. Thus, the uptick rule was detrimental to illiquid stocks (where retail investors are over-represented as a percentage of all traders) while having utterly zero effect on the rest of the market. Specialists and market makers have been gunning for the rule since its repeal because it gives them more control of the orders and increases spreads in less liquid stocks, increasing the profit for them and increasing the price for the customer. Landis thinks that writing VELOCITY in all caps will suddenly make the term meaningful. The speed at which prices move is utterly irrelevant and if the market is too fast for him, he probably should stay out of it. In fact, the faster the market clears, the more efficient it is. The intention of the uptick rule is to prevent markets from clearing efficiently. The effect is retail customers get screwed. Professional traders have never been inconvenienced by this little rule. That's how the SEC "looks out" for the little guy.