"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Saturday, January 23, 2010

SEC could adopt new short sale rule as early as February

Barney Frank couldn’t save the market mid-week, now its Mary Schapiro’s turn.

The SEC regulation would require short sale trades be executed above the best existing bid in the market when shares fall 10% in a day.

The “premise” of the SEC is that forcing short sellers to wait for the stock price to rise may prevent them from inundating the market with sell orders and causing losses in the stock to intensify.

The Dow Jones Industrial Average rockets 59% 3,874 points of light) from the March 9th closing through 12/31/2009. From January 1, 2010 through 1/19/2010, the Dow tacked on an additional 304 points. Where were Mary Schapiro and her SEC court jesters during this meteoric rise?

During the prior 3 trading days, the poor Dow Jones Industrial Average lost 552 points and is now negative YTD by 248 points (2.4%).

What superb timing of the SEC to publicly reinforce their illusion that the equity market drops are the result of short sellers and then implement a new rule on the heels of a few negative days in the market! Dear SEC; have you given any thought to the fact that maybe the equity market drops for simple reasons including “fundamentals do matter”, liquidity afforded by the manipulative HFT traders is a myth and lofty valuations like home prices correct?

Mary, how are you doing on the issues of high frequency trading, front running client orders, dark pools and flash trading?

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