High noise-to-signal in SEC actions

September 20, 2008 at 1:20 pm | Posted in regulations, Stock market | Leave a comment
Tags: ,

This NYTimes article discusses the market reaction to the SEC rules banning short sales. A number of trades in the market were involuntary, forced on by the new regulations. As such, I doubt the strength in the market is sustainable. Nothing fundamental has changed; just a few rules changed, which made some people make transactions in the market in order to comply with the new rules, and made others make transactions in response to the market response. There is not much other information in the response, other than the fact that one can expect the government to continue to rescue and to regulate and market participants have to figure out where the heavy hand will fall next.

The pendulum swung far away from regulation during the “Bush expansion”, now, it is going to swing even further in the other direction.

We already know this. I think the SEC is saying that things are not as bad as they seem (as I said previously here), but then, is that what the SEC really believes, or is this just empty reassurance?

I guess, looking ahead and trying to decide what to do in the markets, this last week was mostly noise and  little signal.

Advertisements

Leave a Comment »

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.
Entries and comments feeds.

%d bloggers like this: