I have no more faith in the current clowns being able to do anything more sane, such as to regulate various trades, in order to prevent downturns as well as to moderate trading when things got too heated. An example of this would be to adjust margin requirements on the upside and covering short sales on the downside of stocks (equity securities) when their price-earnings ratios diverged from traditional (still the valid benchmark!) historical average values. The standard has been 15, and 10+ years ago I had thought that perhaps there should be a sliding scale of margin or coverage percentages in the range from P/E 5 to P/E 25 that would function as a damper on divergences both upward and downward. (There is no excuse for the appeals-to-losers asymmetry that we can predictably expect, based on resentment, that would in practice mainly tighten restrictions against making money in a falling market.) Trading restrictions would either be “pegged” at their max interference levels at levels of 5 and 25, or trading itself could be suspended if prices and P/E ratios went outside these maxima.

That's just an example — of not only a reasoned approach to interventionism, but what I wouldn't entrust our current clowns running things (either on Wall Street or in Washington) ever to do well or right.

(Besides, it is the kind of thing some proponents in the USA want for other, more specific reasons, not only new taxes for new taxes' sake, or to bash the banks, but to raise revenue to pay for new federal health care entitlements, for example.)

http://www.bloomberg.com/apps/news?pid=20601103…