James48843
TSP Talk Royalty
- Reaction score
- 569
Dear Secretary Paulson:
I know you read TSPTALK to get a sense of what is really happening out in the markets. After all, you are a government employee too, and you have your TSP just like the rest of us.
Now, I know I'm just a lowly TSP shareholder. And I have no special knowledge of the markets. After all, you are the guy who gets paid the big bucks to monitor and regulate the financials of the U.S. - and thereby infuencing the World economy. That's a pretty big job.
But let me give you a little something to think about, ok?
You don't need to go out and save the world, using taxpayer dollars.
You only need to do one thing. And that one thing is a little, minor rule, and that in and of itself is going to save the markets from the meltdown now in process.
Are you listening yet?
Ok- here we go.
It's something that USED to be there in the rulebook, from 1938 until you removed it last year. It's called "the uptick rule".
Secretary Paulson- look at this chart:
I know you read TSPTALK to get a sense of what is really happening out in the markets. After all, you are a government employee too, and you have your TSP just like the rest of us.
Now, I know I'm just a lowly TSP shareholder. And I have no special knowledge of the markets. After all, you are the guy who gets paid the big bucks to monitor and regulate the financials of the U.S. - and thereby infuencing the World economy. That's a pretty big job.
But let me give you a little something to think about, ok?
You don't need to go out and save the world, using taxpayer dollars.
You only need to do one thing. And that one thing is a little, minor rule, and that in and of itself is going to save the markets from the meltdown now in process.
Are you listening yet?
Ok- here we go.
It's something that USED to be there in the rulebook, from 1938 until you removed it last year. It's called "the uptick rule".
Secretary Paulson- look at this chart:
You changed the perfectly good rule, which had been in place since 1938, on July 6th, 2007. When the markets opened the next day, that's when things began to really fall apart.
You see, from 1938 until July 6, 2007, if someone wanted to short a stock, they had to wait until the shares moved up ever so slightly. That prevented a snow-ball downward push on a stock price, when everyone out there saw a company going down, and all jumped on the bandwagon to kill a company through their bearish greed shorting.
When you removed that rule, you let loose some powerful forces. And we now are seeing their instability effect.
Instead of forming these hundred billion dollar bailouts, and suspending some, (but only 799 financial companies) but not all companies "shorting", you need to reimpose the Uptick Rule.
Do that, sir, and the market will stabilize, and you will save your 2 trillion dollars that are in jeoparday from Bear Stearns, Fannie May, Freddie Mac, Lehmen Brothers, AIG, and whoever else is next.
BY the way- by eliminating "shorting" on those 799 companies you imposed last night, you are now adversely affecting all the index funds that invest in those companies, as many investment vehciles have "short" positions as hedges to reduce expenses. For example, Barclays, which manages the TSP, maintains short positions in some stocks in the index, just as a hedge against expenses. By eliminating ALL shorting, not just doing an "uptick rule", you now have potentially further destabilzed things, but that won't become appearent for a couple of days.
It's the uptick rule, sir.
Reimpose it.
Today.
Thank you.
Signed--
A shareholder.
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