Maybe economists will, too. The SEC is considering reinstating an "uptick" rule to curb short selling.
The uptick rule was initially created following the stock market crash of 1929 to prevent bearish investors from ganging up on shares. After years of economic studies that showed the rule wasn't having an impact on market volatility, the SEC abolished it in 2007, around the time financial turmoil was getting under way.
Many traders and others blame the SEC's decision as a factor behind the precipitous declines of some shares over the past two years. Some say that the rule's absence hurt investor psychology, even if it didn't cause market volatility. Reinstating the uptick rule could give the market "a huge shot of confidence," says Brian Bartsch, a trader with Cohen Capital Group.
