And speaking about not understanding what caused the bear market, we have this recent SEC action:
“The Securities and Exchange Commission narrowly approved curbs on short selling, addressing what some consider a cause of the 2008 financial crisis despite criticism that there was no evidence to support the move.
The commission voted 3-2 on party lines to make the curbs final, in another indication Chairman Mary Schapiro is having trouble gaining unanimity for her ambitious agenda to toughen the nation’s securities rules.” (emphasis added)
Once a company’s stock price falls 10% from the prior close, traders could only execute short sales for the stock at a price above the market’s best bid. The curb stays in place through the following day.
At least it was a 3-2 vote . . .
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Sources:
Curbs Short Selling, Disappointing Goldman Sachs
Jesse Westbrook
Bloomberg Feb. 24 2010
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDtSKApox3UM
In 3-2 Vote, SEC Limits Short Sales
FAWN JOHNSON
WSJ, FEBRUARY 25, 2010
http://online.wsj.com/article/SB20001424052748704240004575085344139674042.html
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