More Trading Curbs for NYSE
Wednesday, May 19, 2010 – by Staff Report
Trading Curbs to Be Tested for Six Months ... Exchanges are expected to introduce new trading curbs known as circuit breakers for large U.S. stocks over a six-month pilot program, as regulators move to avoid a repeat of the severe market plunge on May 6, two people familiar with the talks said on Tuesday. The circuit breakers need to be in place and operational by June 14, one of the sources said. Both sources requested anonymity because the talks are private. Multiple sources previously told Reuters the breakers would halt all trading when individual stocks drop or rise by 10 percent in five minutes. ... The restrictions would not go into effect immediately because the rules are in the proposal stage and need to be ironed out. Circuit breakers will act as "speed bumps to help the market adjust quickly to the high levels of volatility," Schapiro said by video link from Washington at a conference in Boston. The SEC and exchanges are considering circuit breakers that would halt trading in a company's stock if the stock fell more than 10 percent in five minutes, multiple sources have said. Regulators are also mulling circuit breakers that would halt trading across all markets, giving investors time to digest any news and adjust trading strategies. – Reuters
Dominant Social Theme: Just helping investors, big and small, to trade responsibly.
Free-Market Analysis: We wonder that anyone can report these issues with a straight face anymore. Well, obviously Reuters can. But at what point do observers finally say "enough" when it comes to regulatory democracy and its ever-evolving attempts to "fix" elements of industry that have been broken by previous regulations. The cognitive dissonance continues to build.
Modern economics (neo-classical and post marginal utility) tells us that every regulation is a price fix inevitably resulting in a queue, a misappropriation of resources, a scarcity, etc. Imagine, now, the amount of regulations that have been passed into law by such entities as the US Congress and the regulatory mavens at the EU. The mainstream press tends to criticize "do nothing" legislatures, but unfortunately anything a legislature does distorts economic freedom and interferes with the marketplace.
READ MORE HERE
Dominant Social Theme: Just helping investors, big and small, to trade responsibly.
Free-Market Analysis: We wonder that anyone can report these issues with a straight face anymore. Well, obviously Reuters can. But at what point do observers finally say "enough" when it comes to regulatory democracy and its ever-evolving attempts to "fix" elements of industry that have been broken by previous regulations. The cognitive dissonance continues to build.
Modern economics (neo-classical and post marginal utility) tells us that every regulation is a price fix inevitably resulting in a queue, a misappropriation of resources, a scarcity, etc. Imagine, now, the amount of regulations that have been passed into law by such entities as the US Congress and the regulatory mavens at the EU. The mainstream press tends to criticize "do nothing" legislatures, but unfortunately anything a legislature does distorts economic freedom and interferes with the marketplace.
READ MORE HERE
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