Uptick Rule Brings Upturn

Anyone who owns Citigroup shares - in other words, everyone - felt a bit better today as CEO Vikram Pandit shared good news with his employees and the stock market cheered up.

And the Dow downed even more happy juice when Barney Frank told some CNBC reporters he was "hopeful" the uptick rule would return within a month.

It's not entirely clear to me why Mr. Frank's comment turned into magic dust. After all, Mary Schapiro - the person with the power to revive the uptick rule - said way back during her confirmation hearing in January that she was willing to re-examine it, and she repeated this to the New York Times in late February. And Ben Bernanke said nice things about the rule during a House hearing a couple of weeks ago. So anyone who wants to see the rule come back should have been feeling optimistic anyway, no?

If Ms. Schapiro has dragged her feet on the issue, I can't blame her, because there's something about the topic of short selling that makes people crazy. It's the financial equivalent of a blood feud. Today, for example, the Eighth Circuit dismissed a lawsuit by an Arkansas pet supply company that had accused DTC and NSCC (you know, the guys who clear and settle most securities trades in this country) of aiding a "death spiral" short selling scheme. (Pet Quarters v. DTCC, No. 8-2114)

I'd hate to make anyone angry, so whether you think the uptick rule is good or bad, or whether you hate or love naked short selling, I'm on your side.

Image: crestock.com