I understand that McCain is running for President and needs to make rash statements that will assign blame for market volatility. These demagogue statements are usually misinformed. Chris Cox does not deserve this bashing. He was a fine legislator and a good head of the SEC. I am sure there was careful study before changing the short selling rule. Perhaps the decision should be revisited after some careful study. The short selling rule is not responsible for the market downturn. Bad economic news is the primary reason.
“Chris Cox does not deserve this bashing. He was a fine legislator and a good head of the SEC. I am sure there was careful study before changing the short selling rule.”
You’re just as wrong as you can possibly be on this issue.
Chris Cox (current SEC Chairman) might have been a decent legislator, but he has been an ABSOLUTE DISASTER as the head of the SEC and needs to be fired immediately.
The SEC (Securities & Exchange Commission) is unquestionably partially responsible for the recent volatility and drop in the stock markets. They have done a terrible job protecting American investors and need to be reprimanded loud and clear by the Senate Banking Committee.
Here are some of the most glaring problems with the SEC that need to be addressed immediately:
1) On, July 6, 2007 the SEC got rid of the Uptick Rule regulating short sellers which had been in place since 1938 because of short selling bear raids during the Great Depression. SINCE THE UPTICK RULE WAS TAKEN OUT, THE VOLATILITY ON THE STOCK MARKET HAS INCREASED BY 70% AS MEASURED BY THE VIX INDEX.
2) On November 2, 2007 the SEC allowed the NYSE to get rid of the Program Trading Curbs that had been in place since the 1987 stock market crash. The NYSE formerly implemented a curb on program trading whenever the NYSE Composite Index moved 190 points or more from its previous close, and permitted program sales to be executed only on upticks and program buys on downticks.
3) The SEC (effective today) has FINALLY passed a ruling to stop the abusive and criminal practice of Naked Short Selling, which is simply counterfeiting the shares of publically traded stock. WHY DID THIS TAKE UNTOLD YEARS AND A FINANCIAL CRISIS TO FINALLY BE DONE?
These are major problems that NEED TO BE FIXED IMMEDIATELY BY THE SEC. These problems have resulted in a massive amount of increased volatility and instability in the equity markets, reducing the net worth of American investors, driving companies out of business, substantially raising the cost of capital, and costing American taxpayers billions in government funded bailouts.
Because the SEC is regulated by the Senate Banking Committee, I urge FReepers to please email and write members of the Senate Banking Committee demanding that the SEC reinstate the Uptick Rule and Program Trading Curbs, and make sure that the criminal practice of Naked Short Selling is truly stopped once and for all.
In addition, a full investigation needs to be made and some heads definitely need to roll at the SEC (including Chris Cox’s) for their gross incompetence.