Perry Glasser

Dollar$ Wizard Award #2

In Business, Economics, Finance, Politics, Wall Street on September 26, 2008 at 5:13 pm

Buccaneers like to say, “Let the markets work!”
They like to say that a lot. They like to say that until they need their own chestnuts pulled from the fire. Then they become ardent socialists, calling for “subsidies” and “bailouts” — you know, welfare for the rich.
Dollar$ congratulates the Wizards of the Securities and Exchange Commission for its outstanding work in enabling the worst financial crisis in US history!
Hats off!

How They Did It

In July, 2007, the SEC abolished the Uptick Rule on short selling, thus orchestrating a new era of stock market manipulation that will out-do the world-wide catastrophe of the 1930s. With luck, we may avoid the fun of totaliatrian fascism and other political ills precipitated when frightened, desperate people don’t know where to turn or who to blame.
But that calls for luck.
Look: the 70-year-old rule Uptick Rule was in the way of Wall Street Buccaneers. Buccaneers have a right not to be restrained from making ever more cash by exploiting the naive and helpless.

The Uptick Rule

Shortly after the stock market crash of 1929, at a time when regulation of markets seemed like a better idea than allowing lying, thieving, duplicitous Wall Street Buccaneers to rape and pillage entire economies in the name of Holy Open Markets, the Uptick Rule originated.
The Uptick Rule disallows piling-on in a down market. At its extreme, that’s a form of market manipulation called a Bear Raid, a strategy that shorts a stock into bankruptcy.
The Uptick Rule stoppede that. It required a positive trade precede any short sale.
Modern Buccaneers claimed such restrictions were in the way of their right to make coin, and the good SEC heeded their cry. The Buccaneers claim is that shorting is a simple market operation: every short position is an obligation to buy in the future. It all comes out all right in the end.
Right, sure.
In 1850, this was true, but when you’ve got a few Cray computers triggering orders faster than any mere human can think, the idea of allowing unrestrained shorts boggles the mind. Heck, if you ran a hedge fund, if you could carry it, you’d keep your Cray computer right next to your cold heart, snug against your Blackberry. As for naked shorts, those marvelous instruments that are a ledger entry that don’t even require an equity transfer…Katie, bar the door!
If the price at buyback time can be forced so low as to be meaningless, some people may ask how deregulation and open markets had to mean that their retirement plans were snuffed out, and a few others may be wondering about their jobs or their kids’ educations. Ask the folks at Lehman, at Fannie Mae, at WaMu, Freddie Mac if open markets and deregulation are what America needs.
Wizards who aid and abet Buccaneers, STAND and get your due recognition!
This time, I’ll bring the pitchforks and you bring the torches.


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