Uptick rule update.. This will lead to a double dip recession

C

Chapdog

Abreast of the situations
If you haven't noticed stocks have rebounded well after the announcement that the SEC would be looking at trading rules overhaul specifically targeting naked short selling, and uptick rule re-reinstatement. There was an open period for comments/study and strong indication that up-tick definitely coming back earlier in the year.
That period ended in June and the SEC has done nothing. Obviously the perpetrators who made a killing betting down stocks and overselling the market last year had benched there tactics during the commentary/study period so that they wouldn't be fingered.
Its all going to change soon. As I am typing this big hedge funds and money managers are plotting there next attack on the market. Right under our noses the biggest purp's are lining up with 101 reasons why not to reinstate the uptick.. and im sure they are also lining the pockets of the head decision makers.
If reinstatement doesn't happen we will be in for a double dip recession without a doubt in my mind. Dont let this slide make sure you stay on this with your reps.

http://online.wsj.com/article/SB125417372365647425.html
 
EW YORK (MarketWatch) -- More than a year after short-sellers allegedly sucked the broader market lower by concentrating negative bets in troubled financial firms, the nation's securities regulators appear to be backing off curbing the practice.

Mary Schapiro

The SEC on Wednesday said it is considering curbing so-called naked shorts -- short sellers who don't locate and borrow the stock they base their bearish bets on. Mary Schapiro, SEC chairman, said the commission will hold a regulatory roundtable on the practice. See full story.

The problem is that there is almost universal agreement that Schapiro's target, naked shorts, are problematic. Even its supporters have to be surprised naked shorting hasn't been banned. No one would have thought a year ago, given the deep losses suffered last year, that naked short selling would still be a market practice today.

Meanwhile, another Schapiro priority, the return of the uptick rule, appears to be losing steam. Wall Street firms including the Vanguard Group Inc. and Goldman Sachs Group Inc. are publicly fighting the measure, and prospects for bringing back the rule, which requires a stock to move higher before a short-sale order can be placed, are dimming. See full story.

That's alarming given that many market strategists believe the uptick rule put a brake on short-selling panics. The rule was eliminated in 2007.

Critics argue that a ban on naked shorting, short selling or a new uptick rule would eliminate market liquidity and the changes would limit the ability of traders to make profits and hedge their long bets.

They complained that implementing naked-short-selling bans last fall was an unfair rule change in the middle of the game. The SEC, under Christopher Cox, argued that an emergency ban was necessary because an urgent market situation required it.

More than a year later, the urgency seems to be gone, at least at the SEC.
 
Story is that without reinstatement of uptick rule(or at least the idea its going to happen) markets are going to crash again in Q4. I am not in the trading business anymore but I was and I have friends there. NO SEC reinstatement = more stock market pain to come. Mark my words.
 
They are marked. I've protected the non-profit's money and I've been working on moving the 401K funds around to protect them better.
 
Chapdog said:
Story is that without reinstatement of uptick rule(or at least the idea its going to happen) markets are going to crash again in Q4. I am not in the trading business anymore but I was and I have friends there. NO SEC reinstatement = more stock market pain to come. Mark my words.
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Without question you are correct. The ban on naked short selling and the requirement that all shorts positions must borrow shares PRIOR to shorting needs to be permanent.

As for the uptick, it amazes me every time they try to justify not putting it back in place. Look what occurred when they removed it in June of 2007. Those arguing that it should not be put back come from the standpoint that it 'didn't do anything anyway'.... to which EVERYONE should reply... "then you won't mind putting it back if it doesn't do anything".

This truly pisses me off. Especially when you factor in the apparent collusion of the government (via the FDIC and SEC) with the JP Morgans and Goldmans of the world. Picking and choosing who the government will 'save' and who will 'fail' is bullshit. Especially when those that are allowed to 'fail' are sold at firesale prices to firms that were already considered 'too big to fail'.
 
Sucks, I really thought 2010 was going to be a good stock year but not if this goes down. Obama's a dumb ass for not forcing this (when you consider how many other things he forces far less important).
 
Chapdog said:
Sucks, I really thought 2010 was going to be a good stock year but not if this goes down. Obama's a dumb ass for not forcing this (when you consider how many other things he forces far less important).
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I honestly thought Schapiro would hammer both of those through... the uptick and the short selling rules. Look at what occurred after Cox's temporary ban...

I would be extremely interested to learn what 'changed' Schapiro's mindset on these issues.

This is going to get nasty. The longer they let this go, the deeper the pain will be. The hedge funds (which are still shockingly unregulated) are winding up for the next big push.

For all those who believe in the antiquated 'buy and hold' mentality... you may want to develop your sell discipline NOW...
 
yah iv already emailed some of my reps including barney frank. Your right to question anyone in a position of power on this decision like Mary Schapiro. This seems like such a no brainier... why would she give into the pressure coming from the perps of the market run down?
 
Chapdog said:
yah iv already emailed some of my reps including barney frank. Your right to question anyone in a position of power on this decision like Mary Schapiro. This seems like such a no brainier... why would she give into the pressure coming from the perps of the market run down?
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Because we as a nation allow the perps to bribe our officials (though we let the politicians call it 'lobbying').
 
If nothing changes I may take whats left of my money out of the market and buy puts. Any suggestions SF?
 
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