Bob Pisani - Downtick Rule

http://seekingalpha.com/article/135644-why-not-a-downtick-rule

"Bob Pisani was right: if you want an uptick rule for shorting, why not a downtick rule for buying? Or someone would say that all buyers are just plain long term investors and there are no bull speculators? Unlike many, I think that honest speculation is what makes markets work, whether it's done on the long or the short side."

Yes, speculators should exist on both the long and short side!

Forbes support No Uptick Rule!

"A new uptick rule, were it to be implemented, would probably try to get around the decimalization problem by forcing shorts to wait for a full percentage point increase in a stock's price. That would definitely reduce shorting opportunities and restrict many shorts to only the largest, most liquid stocks."

Finally someone understands that the uptick rule will be difficult to enforce, unfair to short sellers, and will reduce liquidity in the markets.

Great discussion between: Adam Bold, founder and chief investment officer of the Mutual Fund Store, Richard Gates, portfolio manager for TFS Capital, Laura Corsell, an attorney with Montgomery, McCracken, Walker and Rhoads, and James Lowell, editor of the Fidelity Investor.http://www.forbes.com/2009/04/16/mutual-funds-uptick-intelligent-investing-uptick-rule.html

"As a practical matter, there may be limited short-term impact in the event the rule is reinstated, however, and it is worth recalling that the rule won't effect derivatives trading." Yes, now we have markets that are not linked. Great idea.

WSJ: Four at Four: Your Choice of Uptick Rules

When it comes to asking for comment on the uptick rule, the Securities and Exchange Commission opted for the “American Idol” approach – throw out any one of five options of varying degree of merit, and see how people feel.

Should we get the 1) original rule 2) modified rule with a national bid 3) circuit breaker and /or 4) specific stocks?

What a mess. "Enforcing such a rule is going to be a difficult task, he notes. “With decimalization and penny trading, the enforcement is more arduous than the fact that we have it,” he says. “With multiple exchanges, do you base it on the NYSE or is a composite uptick, or what?” Either way, he believes the implementation of such a rule will reduce bear-market raids that create self-fulfilling prophecies."

Yay, markets only go up! Buy, buy, buy!!

http://blogs.wsj.com/marketbeat/2009/04/08/four-at-four-your-choice-of-uptick-rules/

Mark to Myth?

"Banks can now use "significant judgment" to value assets. "

Great, banks want to mark to (inflated) market prices but not not mark to market when prices decline. Guess all assets should go up. The financial community should be ashamed of bowing to pressure from banking officials. We should let investors decide what to make of the market prices and adjust for market conditions, not let the banks decide if the market is acting rational or not.

"It'll help big banks like Citi recoup billions in losses. But it does little to solve the underlying problem: piles of troubled assets no one wants."

Even though banks have greater "profits" and higher balance sheets, the market is harmed because investors have less confidence in banks marking their assets to myth. Assets are valued at price of what a buyer should pay, not what banks want the assets to be worth. For example, should an unemployed banker decide he is worth $500K, when he is currently taking in $0 in salary.

http://www.newsweek.com/id/192562

Return of the Uptick Rule Edges Closer

"The SEC has been considering reinstating the uptick rule for some weeks after coming under political pressure to take action against short sellers, whom many hold responsible for driving down stock prices during the past 18 months."

Notice that the SEC is pressured by sentiment to take action against short sellers. Even though we have just had a huge 25% rally in a few weeks.

Financial Times
http://www.ft.com/cms/s/0/89779be2-2242-11de-8380-00144feabdc0.html

AIG Counterparties: Why were they paid in full?

"But in their letter, the representatives said that while they were aware of “systemic risk,” they still wanted to know who had decided that the way to contain such risk would be to completely insulate the banks from losses."

"“Credit-default swap contracts were at the heart of A.I.G.’s meltdown,” Mr. Cuomo said in a statement. “The question is whether the contracts are being wound down properly and efficiently, or whether they have become a vehicle for funneling billions in taxpayers’ dollars to capitalize banks all over the world.”"

The corruption continues.

http://www.nytimes.com/2009/03/27/business/27cuomo.html?em

Massive shift of risk away from Wall Street and onto the back of the American taxpayer

"After putting up a relatively small amount of capital, institutions like Pimco, BlackRock, Legg Mason, Invesco and others of that ilk would have the opportunity to participate in 50% of future upside, should it occur. That, in turn, might entice them to pay above-market rates for the assets, which is very good for the banks. But it's hard to imagine any transaction where "everybody" wins - banks, investors and taxpayers alike. The bottom line is Geithner's plan represents a massive shift of risk away from Wall Street and onto the back of the American taxpayer. "

Wall Streets loves free money.

http://finance.yahoo.com/tech-ticker/article/217878/'Win-Win-Win'-vs.-'Robbery'-Wall-St.-Loves-Geithner's-Bad-Debt-Plan-But-Taxpayers-Should-Hate-It?tickers=WFC,GS,XLF,FAS,JPM,BAC,C?sec=topStories&pos=8&asset=TBD&ccode=TBD