The stock market crash of 1987 seemingly taught America how to protect its markets. We have forgotten.
Laws were enacted to protect America from a recurrence of such an event, but the laws that protect us the most have been discarded while those that merely draw out the process live on.
The core of the problem in the stock market today is not the economy. It is not the drop in home prices. It isn’t even the overplayed “mortgage crisis”. It is SHORT SELLERS!
Short sellers can manipulate markets, especially those with large capital bases, using fear as their primary mechanism for fast money. They can cause market sell-offs, pay for false rumors and news articles (propaganda/lies), and drive a stock into sudden collapse. They love to play on fear, because it results in much more dramatic moves in stocks than greed, but in all honesty, it is just greed by the billionaires and hedge funds to play off middle class investment dollars.
In 1987, short sellers were blamed for much of the dramatic fall. They fed on the stocks as they fell to drive them lower paying for rumors and fear to be published in the media to drive people out. There were protections put in place to keep this from happening again, but the rich have managed to get government to get lax once again.
How to fix our problem.
1. Reinstate the uptick rule. It does not allow short sellers to drive a stock down relentlessly, because a stock must rise in price before they can short it.
2. Make naked short selling a federal crime with severe criminal penalties.
3. Ban all short sales during a trading curb.
That is all you have to do. Take away the advantages short sellers have in a market driven by fear. Don’t let them make money in that environment. Even the playing field and save people’s retirement savings.
We are all for short selling, if legal. We are not into stock manipulation by criminals, hedge funds and billionaires. If America were serious about protecting our economy and our markets, rules such as this would be instated, but we believe there are vested interests involved.