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The Uptick Rule

Bankers have been debating bringing back the uptick rule for months, if not years. This week the debate made it to Capitol Hill. Senior Editor Paddy Hirsch gives a quick and dirty explanation of what the uptick rule is, and why it could be reinstated to turn the American taxpayer into one of Citigroup's biggest stockholders. Senior Editor Paddy Hirsch explains.

About the author

Paddy Hirsch is a Senior Editor at Marketplace and the creator and host of the Marketplace Whiteboard. Follow Paddy on Twitter @paddyhirsch and on facebook at www.facebook.com/paddyhirsch101
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Paddy is doing a great service for the masses with these educational videos. Keep up the good work. Paddy's accent also helps.

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.

This is great stuff. I hope all of the whiteboard clips are archived and available as a handy reference on the website. I wouldn't even mind paying for a "Whiteboard" DVD...

PLEASE EXPLAIN NON-RECOURSE LOANS. IF THE HEDGE FUND LOSES THEIR EQUITY, DO THEY HAVE TO PAY BACK THE GOVERNMENT OR NOT?

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.

Hi Lezlee
Sorry, we had a wee glitch with the TCE video and had to take it down. I'm going to shoot another one in the next day or so. please bear with us!
paddy

Paddy, I was referring my bank to your TCE ratio whiteboard discussion (because they have never heard of that term before) and this particular video is the only one that is "Locked". Why?

I think this is a great resource. thanks. I only wish I could get the videos to load on a more consistent basis. Are you having technical issues or am I?

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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