Our all knowing regulators are out to save the world from themselves again as the uptick rule gets a second look. It will take months to test them but in the spirit of speed and clarity there will be five, count em’ five, different proposals for consideration.
Here are the proposals:
Jim Chanos who is primarily a short seller, but also has long exposure had this to say today:
“Rebuilding investor confidence should be the primary objective of any new regulatory effort and it is not clear that today’s proposals will meet that simple goal. Skeptics, independent research and critical analysis must continue to play a vibrant role for our markets to grow sustainably and with integrity. Short selling is integral to improving the efficiency of markets and enhancing market quality through narrower spreads, deeper liquidity, less volatility, and greater price discovery. In recent years, short-sellers have publicly warned the marketplace about the dangers at AIG, Lehman Brothers, and Enron, as well as sounding the alarm over the credit ratings agencies, non-bank subprime lenders, and credit insurers. Proposals to inhibit short-selling have the effect of limiting this vital market-based antidote to corporate fraud and speculative bubbles, and must be carefully weighed against the clear harm that comes from ill-conceived government intervention in basic market functions.”
Chanos was one of the first to uncover problems at Enron and AIG. Keep up the good work BIG GOV. My counter is a downtick rule where you can only buy stocks on a downtick.
A pox on all their houses.