The Uptick Rule: Mr. Cox, Is It Really That Devilish?

by: Bespoke Investment Group November 20, 2008 | about stocks: IVV / SPY    

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Christopher Cox's SEC eliminated the Uptick Rule on July 6th, 2007.  Since the rule was done away with, the S&P 500 is down 51%.  At this point, how much can it hurt to bring the rule back?  The government has already thrown enough you know what at the wall to see if it sticks.  Is the Uptick Rule that devilish that Cox can't even try to bring it back? 

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This article has 12 comments:

  •  
    Nov 20 07:41 PM
    It depends on whether they can actually enforce it. Otherwise, it would be the same as the naked shorting problem. Naked shorting has been banned for years but they didn't care much until recently.

    By the way, non-log graphs are misleading. They over-emphasize any kind of %-based growth.
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  •  
    Nov 20 07:52 PM
    I think that Cox and the SEC are afraid that if they reinstate the Uptick Rule and the Stock Market skyrockets afterward, then it will make them look like idiots and were protecting the Shorts.
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  •  
    Nov 20 10:39 PM
    although i want the uptick rule (and it being enforced), it is a coincidence that it corresponded in any way to the decline. the uptick rule in a properly functioning market should act as a shock absorber to volatility.
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  •  
    Nov 20 11:26 PM
    one only has to look at the VIX since July of 2007 to see how eliminating the uptick immediately added to the stock market volatility.....Chris Cox may not want to hide out in a undisclosure bunker location for the next couple months.....i would not be surprised to see the guy shot or the SEC firebombed after what he has done to this markets and to capitalism.....W needs to fire this guy and now ( I mean tomorrow) before option expiration or else we are all hosed
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  •  
    Nov 21 08:09 AM
    yes restore the uptick rule it should never have been taken away.
    > jack
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  •  
    Nov 21 09:13 AM
    Shouldn't this rule change have REDUCED volatility? Atleast that's why it was removed to make the markets more "free" and hence more true.

    I mean, if its easier for people to either buy or sell freely, the market should settle at the "proper true" value.

    I guess theory and practice differ as we see, but u cant blame the lack of uptick rules for the selloff.

    There were fundamental reasons for this bridge to collapse... huge leverage built on shaky house values. plain and simple.
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  •  
    Nov 21 09:17 AM
    It is obvious our buddy Chris is more worried about his own monetary future than "country first". Great conservative and capitalist job Chris! You, Judas, and your silver coins can RIP salivating over your deal with the devil. Cheers!
    Reply | Link to Comment
  •  
    Nov 21 03:27 PM
    Precisely. How much more could it hurt to bring back the uptick rule? Its not like it was such a hindrance before. It was only around for seventy years or so and the markets seemed to be working just fine. It cannot make things any more worse, as opposed to banning short selling altogether with no real basis.
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  •  
    Nov 25 02:13 PM
    I've asked Ted Kaczynski to send him a Christmas Present!
    Reply | Link to Comment
  •  
    Nov 25 02:14 PM
    Everything points to this guy being on the take! I think Hedge Funds have set up a nice fat bank account for him in the Caymans!
    Reply | Link to Comment
  •  
    Nov 25 02:24 PM
    Chris Cox's wreckless actions in removing the uptick rule have wreaked so much damage and destruction that his actions have cost this country trillions of dollars since Summer 2007.

    The average investor has had his pockets picked by Hedge Funds shorting stocks into oblivion. Now the average investor/tax payer will have to pay into perpetuity to bail out the financial sector, auto sector, etc.

    And our Government continues to do nothing except throw our taxpayer dollars at the problem.
    Reply | Link to Comment
  •  
    Dec 05 10:20 PM
    As much as people think that Iraq will be George W. Bush's negative presidential legacy, I believe actually it will be his SEC and specifically Chris Cox. The history books, I believe, when attribute the accentutation of this financial panic to the actions of Chris Cox and Bush's SEC. The removal of the uptick and implementation of strick mark to market rules have given capitalism and markets and very black eye. Cox has done more to damage the world's faith in Capitalism than has ever been done before, in my opinion. Yes, we may have had a recession as all economies go through ecnomical cycles. However, the removal of the uptick rule has done much to accentuate the impact of this recession on our stock markets. Iraq, in the end, ironically, I believe will be regarded as a positive legacy for George W.
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