Chris Cox's short-selling offensive

In panic times, you need martial law. Or something like that.

If they think that the financial companies are getting unneccessarily hammered and they think that the companies need breathing room they can simply suspend trading on those stocks for 7 days or 14 days or whatever. (The companies would then need permission to merge, but they need that anyways.) Nobody can buy or sell.

That would solve the problem they are obstensibly targeting.

Then there are questions about symmetry.

Sure; nobody wants to restrain the market when it goes up, but everyone wants to restrain the market when it goes down. Thus, back in 1987, they instituted the circuit-breaker to stop stocks from falling too far due to computer trading (or some such). Fine, but such restrictions need to be symmetrical to prevent biasing prices upwards. The circuit breaker is not symmetrical, so stock prices have been overpriced ever since (see the graph of total market valuation against GDP before and after '87), which is part of how we got into this position.

The rest of the market doesn't need protection, unless, OH, wait! This is an election year, isn't it? I guess they wouldn't want the market to go down too much in an election year, lest something bad happen? Like... what? Gee, I wonder.

max
['Stupid is, as stupid does, of course.']

Justin,

A friend of mine said that did away with some type of uptick rule. Should they institute some type of rule which limits both down/up-side movements. Say no more than 5-6%?? Or maybe something like that already exists and this returning evacuee chemist just doesn't have any clue.

Two more questions and One quick observation:

What is the government going to put into their RTC style of bail-out? Or more exactly what is the government buying on the people's behalf?

There are, generally, three ways that Americans feel wealthy or prosperous.
1) Equity in a home increases
2) Stocks, bonds, 401Ks
3) Advances in wages or compensation or increased opportunities for employment

Because the fundamental problem is that we have a dislocation between 1) the supply and demand of housing and 2) the ability of the buyer to buy houses at current prices, it seems that the fastestway to get the market back on track would be for the government to create jobs for average Americans or somehow engineer a rise in wages or compensation. I don't see how they can affect the market given the Fed's constraints in lowering interest rates versus inflation popping up its ugly head. Am I right? If so, it seems an FDR style infrastructure investment in America would be ideal?!?

Justin, is there really a Code of Financial Writing, or is it more like the Code of the West?

Bryan, good to see Houston is back online. Infrastructure investment is good, but it doesn't help we highly educated professionals very much. However, maybe employed construction workers will go out and buy pickup trucks again, bailing out Detroit without Federal loan guarantees. Detroit could live to mess up another day.

Curmudgeon,

My infrastructure tact was much more comprehensive than roads and bridges. I'm talking going Eisenhower on energy, health care, education, etc. Really developing and fostering some efficiencies to get America competitive again.