US proposes rules shakeup after mystery stocks plunge

US proposes rules shakeup after mystery stocks plunge

rawstory.com

US authorities proposed Tuesday a rules revamp to prevent a repeat of a mysterious stock market free-fall experienced on May 6 that saw the key Dow index drop a record 1,000 points.

Under the proposed rules, exchanges would pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period, the US Securities and Exchange Commission said in a stateme

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On this one I would like to ask for some help. I am not an economic genius. I am sure there are some around here though. I do think that these proposed rule changes would not have been made if they would not benefit the rich powers that be. I know the rules will affect everyone that has money in wall street, but they will affect the powers in place best of all because they are the ones who will exploit them the most. So please post any information that you might have.

rawstory.com
(visit the link for the full news article)

What about BANNING THE PPT? And NAKED SHORTING? And MARK TO MARKET? And BIG BANKS FROM TRADING WITH COMPUTER ALGORITHMS?

Do a real reform or SHUT UP.

Could backfire as after the pause everyone will be anxious to get in and unload any potentially bad paper since they know the pause was to prevent a plunge. Plus I would always beware of a rules change and find out who benefits from it. Perhaps the may 6 plunge was purposely done just so they could propose this?

[edit on 18-5-2010 by hawkiye]

Thanks to both for posting.
To me the real driving force behind this is who will benefit. Usually when that question is asked the answer is never the little person.

reply to post by RedGolem


I'm not sure this is going to be able to stop another 1000 point fall, because even if the exchange (like the NYSE) halts trading, traders can always go to OTC markets or use derivatives or some other security which acts as stock but isn't regulated..


So, asking the question "who does this help" is probably the wrong question, because this may not actually do anything at all.

reply to post by Kaytagg


Kaytagg
Another good point of view, thanks.
Also it is just individual stocks that were being proposed to be regulated, the top five hundred if I remember right.

This is so funny, no only they have a damage control team to keep the markets looking good, now they want to make sure markets downfall doesn't show for the prying eyes of the unsuspected main street economic disadvantage Joe.

In other words the government doesn't want regular people to see when the markets are going nose dive.

Manipulations and more manipulations . . .

So... if some entity engages in some financial manipulations that starts a big drop, they manipulate the natural order of things to make it stop.

Either way it's a win for the big boys. When the SHTF, they are safe in the knowledge that trading will be halted to stop them losing out.

This is like us demanding that we pay no tax until financial stability returns to our respective countries and the taxation level drops. Unlike the financial big boys though, we don't have the clout to protect ourselves from financial loss or outright robbery.

haha this is hilarious.
Now they want to put another curtain in front of OZ to make doubly sure no one gets another peek at the real state of the economy.
Move along people, nothing to see here, everything is fine.

There is constant blathering on both in the U.S. and Europe about 'regulating' the market better, and the time a new set of rules to 'stop this ever happening again'.

But NOTHING ever actually happens. Any set of new rules like Chris Dodd's in the U.S. and the attempt in Europe to regulate over Hedge Funds and EU-wide regulatory system for financial services (which will be opposed by the U.K.) will be so watered down that they will mean NOTHING.