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The Uptick Rule
Whiteboard Uptick rule
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Do any regulations preside over the loan transaction between Jack and Diane? And does this all mean, with prices being lowered, that more people will have incentive to loan to short sellers in the future (given that their initial investment probably much smaller today than it would be in, say, 2015)?
Thank you for your work. I've learned more in about two minutes, from you, than all the speeches, conferences, and reports we've been subjected to.
What I find puzzling is that why didn't the government did not attempt to “bailout†the people holding sub-prime mortgages directly instead of giving money to the holders of the asset backed securities. On paper, the argument seems good. The government pays off these mortgages creating a “trickle-up†effect rendering bad assets that derive their value from these mortgages nontoxic. Sure, there is a moral hazard involved, but so is giving out blank cheques to financial institutions that dabbled in these risky assets in the first place.
Can you explain why it's better for the government to buy bad assets from banks to get them to lend instead of just lending money to people who need loans? It seems all this money we give them just goes to their creditors instead of actually being lent out. Some of those creditors are in other countries and not likely to loan us money right? Or they are worried that the economy will tank and are thus timid.
THis question is partly in response to the article
http://news.bbc.co.uk/2/hi/business/7951493.stm If we want lending to resume, why not have the government loan money to people (or businesses) instead of to banks?
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