Sunday, March 14, 2010

No Evidence SEC

"What was new about Wednesday's vote to approve new limits on short-selling was that not even Ms. Schapiro claimed there was any evidence that short-selling is harming investors--or that her new rule will help investors. ... In fact, short-sellers make for a more efficient market by allowing all points of view to be expressed in a company's stock price. The SEC came to this conclusion several years ago when it abandoned the so-called uptick rule that had prevented a short-sale unless the last movement in the stock price had been up. ... Ms. Scahpiro's argument is essentially that, even though the SEC staff has studied the issue exhaustively and found bupkus, some investors think it's a problem and therefore they will feel good when they see the SEC regulating it. ... But what if other investors realize that limits on short-selling impede price discovery and reduce liquidity", my emphasis, WSJ Editorial, 26 February 2010, link:

The SEC never asked me about this. It may be time to send the SEC and the Fed "to sleep with the fish".

1 comment:

Anonymous said...


Evidence of what?

“Because there were fears that short-sellers were causing problems, the SEC responded,” said Lawrence Harris, a former chief economist for the agency who’s now a finance professor at the University of Southern California in Los Angeles. “We don’t want to do things in the heat of the moment that we later regret. Analysis helps ensure that the government doesn’t make capricious decisions.”

Didn't the chief economist leave over this nonsense?

White, of USC, doesn't have it quite right... the SEC is a minion of Geithner's Treasury... Geithner needed to show Congress that the Administration was "regulating"... haha!

Ban short selling? Why don't they look at the "fails to deliver"?