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Week on Wall Street

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Mr. Johnson makes a disingenuous remark when he says that naked shortselling is already illegal so he doesn't really understand the SEC action. Naked shortselling has been a true bane to a fair equities market. If it is illegal and being enforced as such, why is it occurring so broadly? Every financial professional with any real connection to the marketplace should be fully aware of it, and any ethical professional should be voicing opposition to it, rather than pretending they are unaware. There is not a true market if there are unlimited shares that can be sold without any borrow. The SEC has dragged their feet until this problem has started to endanger the financial companies that the market relies upon. As Pitt said today, this has to be fixed for every equity, not just the financials. Naked shortselling restrictions were put in place after 1929, and if the SEC continues to pretend those restrictions don't need to be enforced, it isn't a stretch to say we could have another 1929.

I disagree with Ms Bruno. I think she fundamentaly doesn't understand the reasoning behind the SEC ruling. Mr Johnson never painted that decision as having a huge impact. Rather, he mentioned it simply as a good decision. Mr Johnson has an advisor's veiw of the market. Which is to say, he is looking longterm. Given the history of the market, that is always optimistic. He even referenced longterm when he mentioned looking back on the Fannie/Freddie decision as a possible turning point. I think what we hear is a professional being cautiously optimistic and keeping the focus on the longterm - something the general public fails to do regularly.

Mr. Johnson wanted to punctuate his comments concerning this week's happenings on Wall Street with the "Wells Fargo Wagon" but a better song might be "The Cockeyed Optimist" from South Pacific. Johnson cheered the SEC's emergency order on short selling without mentioning that it only affected a select group of financial stocks. I guess as far as the SEC is concerned, the rest of the market can fall except for a select group of financial companies. Also, he failed to mention that the SEC had just removed the up tick rule last year which might have slowed any panic selling. But his cockeyed optimist award is earned by ignoring the fact that the market's rise was probably due to short covering rather than to any fundamental change in the market's view. Marketplace should sing "I'm Going To Wash That Man Right Out of My Hair"but won't because Mr. Johnson continues to be entertaining, albeit inaccurate.

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