Cramer's Stop Trading! They Know Nothing! (12/9/08)

Stocks discussed in Jim Cramer’s Stop Trading! TV program, Tuesday, December 9.

UBS (UBS), Deutsche Bank (DB) and Knight Capital (NITE)

Cramer thinks those who say the uptick rule doesn’t matter, including executives at UBS, Deutsche Bank and Knight Capital, are being disingenuous; “Christopher Cox (the SEC Chairman who repealed the rule) has singlehandedly undone everything has protected us after the Great Depression.” Cramer called the executives who said the rule didn’t matter
“morons.”

The rule required traders to wait for the stock to “tick up” before selling it short. Cramer blames the speedy collapse of financial institutions such as Bear Stearns on the repeal of the law which was passed during the Roosevelt Administration to prevent another Stock Market crash. Cramer said the uptick rule allowed investors to catch a much-needed breath and added “We’re in a bear market. Let’s just try to figure out what worked for the last 70 years and reinstate it.”

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Comments

[bowater:]

FULL DISCLOSURE FOR SHORT SALE PRICE AND VOLUME

At the present time, the exchanges report the long trades (buy, sell)on the tape and "time and sales" transaction for reporting services. (reuters,etc)

What they don't report is the short sale or buy to cover, when it occurs.

The shorts have a great advantage in that the short position on a stock is reported only twice a month. Why should an investor wait 2 weeks to find out the short position, knowing that it may not be accurate.
There is no reason that the short sale or the buy to cover cannot be reported in real time, just like the long trades. (buy,sell)
Our technology will allow it, why doesn't it happen?
The ticker on the tape would look like this:

s3000T (short 3000 ATT)

bc3000T (buy to cover 3000 ATT)

At the end of the day, all the trades should be reported, including short sales and short covering.

T vol 3,699,700 s197,200 bc34,000

It would also be easy to keep a running total of the shares short.

tss678,534 (total shares short
This is one way to level the playing field with the shorts.
This is full disclosure

2008 Dec 10 08:56 AM

[User 281485:]

It is unfortunate that the financial system was allowed to run wild. The suspension of the uptick rule which worked for decades was a mistake. Those who wanted it repealed had ulterior motives that eventually have helped sink the system. The main systemic risk which exists is stupidity and lack of foresight. The only way to control that is to treat these people like the irresponsible babies that they are...lots of rules, regulations and massive oversight.

2008 Dec 10 09:17 AM

[PNG:]

I am going to make it my goal to write every member of Congress to introduce a bill and put a stop to trading "short".

It serves no purpose except to disrupt the markets. The middle class people try to build their portfolios, 401K, IRA's just to be knocked back down by these big funds and high rollers.

Some countries have outlawed the practice and I believe it is a trend to discontinue "short" selling.

2008 Dec 10 03:00 PM

[happysoul77777:]

I totally agreed with Cramer.

The repeal of the uptick rule was a disgrace. Cox has abetted the market makers to rip off other investors.

2008 Dec 10 11:09 PM

[HDawg:]

PNG - I disagree with you on the selling short issue. Trading is not investing. Shorting for a trader is like selling your weekly groceries hoping the price goes down so you can buy some back and eat. Otherwise we don't eat. I do agree that all trades should be reported.

2008 Dec 11 08:00 AM