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On McCain’s Call For The Firing Of SEC Chairman Chris Cox
There’s much to criticize — but are people criticizing the wrong things? Today’s MUST READ by Professor Stephen Bainbridge.
5 Responses to “On McCain’s Call For The Firing Of SEC Chairman Chris Cox”
Professor Stephen Bainbridge, who's basic point if I'm not mistaken (and written on that paragon of unbiased info, Pajamas Media) is that he loves John McCain, even though McCain's an idiot with no understanding of what he is talking about.
I'd point to the SEC Commissioner's own statement as a “must read” for a bit of antidote: http://www.huffingtonpost.com/2008/09/18/sec-ch…
I'm still not sure Bainbridge is right about ability to fire the SEC chairman. Harvey Pitt was told he no longer had the confidence of Bush and so he resigned. That's different than being “fired.”
Either way, Bainbridge is right that Cox is not the problem here per se. The problem goes far deeper to the culture of deregulation that Bainbridge presumably supports.
The Author is way off on Naked Shorting. It does need to be stopped, though it is true that it's not the primary reason for the collapsing markets. The cause of that is in the Derivatives trade, and in the underlying fundamentals that are more and more obviously bad.
Market aside, if you've ever been in a manipulated “Threshold” stock, you might very well understand reason to not allow nameless brokers to silently sell an unlimited number of shares that they don't own, and haven't borrowed.
The President can remove the Chairman from the post of Chairman, but not from the FTC itself:
http://volokh.com/archives/archive_2008_09_14-2…
hat tip: Instapundit
Isn't the point, here, that short-selling, Naked or otherwise, isn't helping, right now? It's making people (like me) who have dealings with (hopefully) sound firms like Morgan Stanley very nervous? And, since there doesn't seem to be any relish for the idea of temporarily banning them, outright, for financial firms (like in the UK), at least banning the Naked variety might settle some nerves and not cause too many problems.
In fact, Prof. Bainbridge, if I understand him, maintains that there's really no difference between the Naked and the “permitted”, so why do we need them both?