Flogging Fast Money Views on Reinstating Uptick Rule

[Post Summary]

My beloved put his hand
By the latch of the door...
—Song of Solomon

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CNBC's Fast Money traders spoke briefly tonight on the subject of reinstating the uptick rule and I strongly disagree with consensus conclusions. Per issues surrounding decimalization, these existed prior to July 2007 when the NYSE uptick rule was abolished. Per Macke and all his whining about "manipulation" (which existed just as prolifically, pre-government intervention), just two words: more fiber. The guy needs to take a crap already.

Too bad Joe Terranova of Virtus Investment Partners was not on tonight's panel. He probably would have highlighted the fact no uptick rule existed on NASDAQ 2000-2002 and contrasted this with the fact the NYSE was trading at the time with an uptick rule. Some months ago Terranova suggested NASDAQ's far worse performance during that period's bear market might have been due to there being no uptick rule in place on NASDAQ. True or not, it was compelling food for thought.

Personally, I believe the uptick rule's abolition on the NYSE was meant to empower those whose structured finance, easy money machine was seizing like the Tin Man in rain. The need to raise capital surely did not descend upon the financial system from some hidden place buried behind a thick fog. Rather, the need was well-know and understood. That is why regulators accommodated, allowing capital to be more easily raised on the short side of the stock market. Of course, this act came at the expense of millions of unaware investors. And in defense of this swindle, those who benefited reliably fall back on the same, worn argument: that if every means of raising capital were not actuated the entire system would have imploded. Then where would have investors been?

The real issue surrounding the uptick rule involves its rightful place in an environment where stability of the very underpinnings of all things finance is a priority. Removed, and the lesson is painfully obvious. You are inviting volatility and manipulation.

—Tom Chechatka