Como se combate o populismo? "Com eleições", responde Fukuyama

[heterocedastico]

Porquê esta decisão agora?

[Ulisses Pereira]

Já agora, para os que não lembro, deixo aqui um link para um post do caldeirão que contém a opinião do Cramer sobre esse assunto:

http://www.caldeiraodebolsa.com/forum/v ... ght=cramer

Um abraço,
Ulisses

[JN]

Abolishing the Uptick Rule

Wellington Letter | Bert Dohmen Editor | POB 49-2433, Los Angeles, CA 90049 | www.dohmencapital.com



“As you probably know, after the 1929 market crash, the "uptick rule" was implemented. This allows short-selling of a stock only if the price is a tick higher than the last trade. The reason: it was found that massive short selling was probably partially responsible for the stock market crash of 1929.



The short sellers would just sell short huge quantities of shares of a stock that they did not own, but intended to buy back at lower prices. This technique was called a "bear raid." Old Joe Kennedy made his fortune that way. After the crash, he became the first head of the SEC. He knew first hand that this practice could produce a stock market crash.



Well, the SEC, in its infinite wisdom, is launching a pilot program to do away with the "uptick rule." Starting May 2, the big trading operations can use the Super-DOT computer system to short a multitude of stocks without an uptick. I believe, most of the initial stocks in this program are the Russell 1000 index stocks. With the super computers, a crash can be organized so much faster than in 1929.



I have been trading the markets for well over 30 years. Knowing how these big trading operations currently manipulate market swings, I consider this just another weapon in their arsenal. Get ready for some really wild swings. With this pilot program, using super-fast computers they can sell short 1000 stocks in huge quantities, instantaneously. When there aren't enough buyers on the other side, this causes an immediate sharp drop in the stocks and the index. Having bought put options, and sold call options short before this maneuver, they can quickly pocket big profits, while the average investor is scared to death. Ah, the marvels of technology, and the stupidity of regulators!



I believe that this is just another item that will contribute to the eventual demise of the individual investor. Already 50%-60% of the daily trading volume is from the big trading operations, called "program trading." They don't care about investing or the long term. They just want volatility.



The evolution now includes converting to electronic exchanges. The NYSE (floor) and Archipelago (electronic) are merging. This will eventually put the infamous "specialist" system out of business. It's about time. When large entities in the same industry merge, it's almost always a sign that the business is in decline. It's like two drunks trying to hold each other up. The message is that the investment business is shrinking.



By abandoning the uptick rule, the SEC has now made it possible to have another big market crash. The 1987 crash was caused by a computerized technique called "portfolio insurance." What a misnomer! Without the uptick rule, there will be no stopping the deluge of selling and short selling once a meaningful decline is underway.”