The Uptick Rule - Your Thoughts

Discussion in 'Wall St. News' started by tomahawk, Apr 9, 2009.

  1. Patchie,

    Also, the correlation between the removal of the uptick rule and the recent market volatility is completely meaningless. That is the definition of very poor statistical research

    Correlation is not causation. Your statement is as nonsensical as me telling you that the removal of the uptick rule caused the recent stock market rally.
     
    #31     Apr 9, 2009
  2. Neodude

    Neodude

    Unfortunately 99% of people in this world don't understand this, especially politicians. This is the reason we have had human sacrifices, people burned as witches, and other none sense happen in human history. People have a way of giving meaning to the most meaningless things without any research...

    -Neo
     
    #32     Apr 9, 2009
  3. patchie

    patchie

    Angrycat, do you drink during the day because it sounds like you do.

    The uptick rule pre-2007 was marked as under performing. The SEC ran some Pilot program in a bull market and deemed it a useless rule based on the changes in trading environment and the decimalization in trading.

    The SEC removed the rule (despite some concerns raised by economists who evaluated some data with the SEC) and almost instantly problems surfaced. Was this a coincidence, probably. But did the ability for short sellers to raid bids exacerbate the free fall in the financials; probably.

    The fact that you and so many others fear a reinstatement of the rule is impressive because you have to wonder why such an outrage exists. what is it you fear? Was trading in 2006, 2005, 2004 difficult? Or is the fear that profits won't come as easily as they do today where bids can be wiped out and a panic created?

    you have done a great deal of whining and a great deal of reverting back to pre-1934 trading practices but tell us oh angry one, What is it that you fear the most in reinstating a rule that in 2006 was defined as nonfunctional?
     
    #33     Apr 9, 2009
  4. patchie

    patchie

    Angrycat, you have spouted a great deal today about empirical data. Care to provide us some of the research you personally have been using to understand the implications of the uptick rule.

    Please don't cite the recent Pilot program because that was a meaningless program and you have no offerings as to what the data really says or what actual data was used to decipher it.

    Come on Angrycat, I hope that instead of being the blog bully you actually offer something of real substance to support your claims.
     
    #34     Apr 9, 2009
  5. gkishot

    gkishot

    Markets go down not because sellers sell the stocks short but because the earnings of the companies deteriorate and consequently they cut their dividends. It's politically beneficial to make short sellers a scapegoat for the current recession and financial crisis. Politicians who have,by and large,a vague idea of how the markets work should leave short-sellers alone.
     
    #35     Apr 9, 2009
  6. Patchie,

    Not only are you an idiot, but you're also an unbelievably rude idiot.

    Since that's the only thing you understand...listen closely, Moron:

    YOU are the fuckwad who accused the SEC of neglecting to do enough rigorous empirical research to remove the rule. You can't produce a single straight answer to a single question I asked you but you proceed to spout idiocy about bear raids in financials and blaming the lack of price test for the market volatility. Could it be that banks made too many bad loans? NO! It's the lack of uptick! You're just a talentless meathead whose "strategy" consists of only going long.

    Incidentally, I'm not afraid of the return of the uptick rule or some similar garbage. I'm exempt. I'm against it because it creates unfair disadvantages for retail traders and does nothing to promote free and fair markets or keep the U.S. exchanges competitive with other world exchanges.

    But if you insist, I'm sure all the specialists and market makers will dutifully rape your retail order when the new rule is in place. It's really more money in their pockets at your expense.
     
    #36     Apr 9, 2009
  7. patchie

    patchie

    There ya go Angrycat I knew you had it in ya.

    1. The new rule will put in place a provision that is long needed - the removal of the market making exemption. These thieves can no longer blast out bids to cover their positions. That is GOOD for the retail and for the markets.

    2. My comments, had you actually followed them, stated that the SEC staff made comments that there was no empirical data that supported the beliefs that the Uptick rule played any role in the recent market decline. My response to that was a simple one but one you ignored or did not understand, that being that there is no empirical evidence to prove it didn't either. You made this comment into more than it was.

    As to the rest of your spouting bullshit, there was no question asked it was rhetorical. The fact is a thorough study would serve both purposes (pro or con an Uptick rule) which was exactly my point idiot!

    BTW. Liquidity loss, that is the spoutings of a fool. Our markets are trading at record volumes year over year. almost to a point of too much volume because of the volatility being created by investors choosing to simply manipulate markets up and down regardless of fundamental reasoning.

    Now go back and take your med's.
     
    #37     Apr 9, 2009
  8. bevo96

    bevo96

    I love the "we had it for 70 years" justification these morons give. Lots of things worked for 70 years...horse buggies, slavery, milkmen, the abacus.


    Most of these guys still think the floor of the NYSE is a relevant place, instead of a solitaire parlor, and that guys place orders by handing paper to another guy.
     
    #38     Apr 9, 2009
  9. patchie

    patchie

    I love the fact that a couple of anonymous bloggers on ET consider themselves such experts and yet they are at best mere day traders hacking their way through.

    Lets see what some of the experts have to say. The important take on this would be....the experts can't even agree. And for the record, this was not just a banking issue and about banks fucking up.



    James McGlynn, portfolio manager, Calvert Group, Southlake, Texas:

    "I can't believe they ever got rid of it, and I want to know why they got rid of it. It shows something seriously wrong with the regulation. Stocks won't go straight down, it will reduce some volatility on the downside and take away a tool of the short-sellers.

    Regulators should next target credit default swaps "to make people have some basis in ownership of the debt before they can trade them," to curb speculation, he said.

    Elliot Spar, market strategist, Stifel Nicolaus & Co.:

    "I don't like that thing about the 10% collar. It's like changing the rules all the time….

    "People did not want to be in a position where they can't get out. That's going to be the same thing, once a stock goes down 5 to 7% it's going to bring on the sellers again.

    "I don't like to be a cynic, but this falls under the category of the government closing the door after the horse left the barn. Every financial has been accelerated and crushed on the downside. It certainly got there a lot faster without an uptick rule. Most of the damage there has been done. So if they can come back with a rule that people can live with, the next time that we go down, it will slow things down.

    "I wish them luck. The bottom line is whatever they do, it will be better than what we have now."

    Jack Ablin, chief investment officer, Harris Private Bank, Chicago:

    "This is probably good for the overall market. It's great for retail investors, bad for institutional investors.

    "My worry is in effort to help stimulate stock prices we could actually lose some liquidity as market makers don't have the flexibility to hedge their positions readily.

    "Overall it's a net positive for the short-term, longer-term we will need to reexamine because of the liquidity.

    "The stock market can respond very quickly to changes in information and sometimes that's to the down side. Reinstating the uptick rule may impair our ability to respond."

    Bradley Golding, managing director at Christofferson, Robb & Co. in New York:

    "I think there's a big difference between people who have abused the system by selling shares with no intent of delivering, and people who have done their best to live within the rules and were trying to conduct the system and make money for their investors.

    "In the end, I think the uptick rule is a placebo for politicians who don't understand the deeper issues and want to say they've done something without sorting out the underlying problems of corporate malfeasance and poor management."

    Hedge fund manager Doug Kass, who heads Seabreeze Partners Management:

    "My general view is that short selling is a legitimate technique for price discovery, provides liquidity and is used for hedging. The SEC must be aware of unintended consequences and vilification of short sellers—especially by financial company managements is stupid.

    "The problem is that the managements of the banks and brokers screwed themselves up, short sellers did not. Short sellers just made people notice how many bank managements lied like ministers of finance on the eve of devaluation."

    Eric Kuby, chief investment officer at North Star Investment Management Corp., Chicago:

    "I think there's two issues. One is they [the proposals] have been pretty widely discussed ahead of time.

    "Second is there does seem to be in the market conflicting opinions as to whether it's a good thing or a bad thing for the market to restore some semblance of the uptick rule.

    "I don't think it's likely going to be a market mover in the short run.

    "I actually believe that it is a positive because I think the absence of some semblance of the uptick rule does provide the ability for speculators to step on the neck of stocks and it creates an element of risk that, if taken out of the market, would be a positive."

    Reporting by Joseph A. Giannone, Jonathan Spicer, Ryan Vlastelica, Ed Krudy, Leah Schnurr, Herb Lash, Phil Wahba, Al Yoon and Jen Ablan; compiled by Edward Tobin and Joe Giannone
     
    #39     Apr 9, 2009
  10. patchie

    patchie

    bevo, I am more amused by the morons who somehow think bringing it back will kill liquidity and move money out of the US capital system. I think I have heard that with every short sale reform that has come through since 2005. Never once happened but it was an amusing threat.

    Since angrycat can't answer the question, why don't you. what is all the fear circulating in bringing back the rule. What got your panties in a wad over the SEC opening up for public comment? Didn't see you whining like this in 2006/2007 when they removed it.
     
    #40     Apr 9, 2009