Thursday, September 18, 2008
Cox [Andrew Stuttaford]
Kathryn, John McCain has a point. The SEC's 2007 decision to get rid of the rule that obliged short sales only to be made on an uptick was a clear mistake, the sort of mistake that gets made in complacent times. That original rule was brought in for a good reason after the 1929 crash, some of the lessons of which appear to have been forgotten. Adjusted, perhaps, to reflect the impact of decimalization, the rule should now be restored. Putting all the blame for the current market turmoil on short-selling is, of course, ludicrous (the short-sellers have, after all, been given their opportunity by an underlying credit crisis that was none of their doing), but there's no doubt that bear raids of a type that the uptick rule was designed to thwart have made a bad situation worse. Incidentally, putting all the blame for the SEC rule change on Chris Cox is also ludicrous, but sometimes the guy in charge has to step up — and step down.
09/18 04:57 PM
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