Byzantine Ruins

SEC: Don't Mess with Market Mechanics

I think it's shameful that the regulatory agencies are taking such a partisan stance in the market.

Is this obvious short squeeze going to be coupled with a confidential exhortation to market makers not to lend shares in these troubled institutions? Are they going to strongarm market players to buy large blocks of shares in a "show of confidence"? Can there be any clearer sign that the regulators have been co-opted by the money center banks and contaminated by moral hazard relating to the public-private nature of the GSEs than this jawbone intervention?

Why do we even have this market at all if we're only comfortable when it's generating the next asset bubble, not when it's correcting? If our investment decisions are to be based on policy preference and not market forces, why not cut out the charade and just call it "taxation"?