Reinstate the uptick rule — now!

Fasten your seatbelts, as the next couple of weeks promise to be quite a ride.

If you didn’t heed my advice to tune-in to Warren Buffet on CNBC morning Monday morning — shame on you.

As I’ve preached for quite a while now — the market is not currently moving on fundamentals — it’s moving on emotion — and when Buffet makes very pessimistic statements about the state of the economy, as he did Monday — you knew the street would quickly react.

The market instantly pulled back, then it rallied to the point where the Dow and S&P posted their biggest gains since November yesterday — which I attribute to a push from Citi — and this morning we’re trading below fair value — again.

Add into the mix that our new treasury secretary has announced that real details on how Washington plans to deal with toxic assets will be outlined within the next couple of weeks.

And then further news — that is golden to my ears as I’ve been screaming for this for over a year — that some D.C. politicians, such as Barney Frank, may be giving some consideration to reinstating the uptick rule.

As the sneaker commercial slogan says — just do it!

Yadda-yadda, I know there are some on the street who say it doesn’t matter — but I disagree. While I believe the elimination of this rule played a major role in the crisis from Main St. to Wall St., along with toxic assets and the meltdown in the housing market — they never-never-never-ever should have abolished the uptick rule.

And don’t even get me started talking about mark to market.

Reinstating the uptick rule won’t be a magical cure, and other things need to be done — including letting some institutions fail, recipients of the TARP quickly paying it back in full and shoring up their bottom lines on their own, and forcing other companies to pay a visit to bankruptcy court — but the reinstatement of the uptick rule will be one solid step in the right direction.

Same names as previously mentioned are still on my due diligence list.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here — do your own due diligence — or at least enough research to pick the right professional to do it for you.


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