@fedya –that’s what’s been troubling me about the mkts near-death episodes several times since late last year –last one in mid July. SEC had a many years-old “uptick rule” –you could only short on an uptic. Then abruptly, in July 2007, SEC dropped the rule (because it was making the new ETF instrument hard to fair-value), and suddenly hedges –including anonymous “dark pools” started just savagely hammering one victim after another, driving stocks and sectors down almost at will, then covering, going long, and driving it back up in the reduced resistance created by driving away the volatility-sensitive trade, then shorting again. A money machine –and then the naked shorting –illegal but no one stopped it –where you didn’t even need to own a claim on what you were trading! The really bad ARMs strted two years before, so that, all at the same time, in late 2007, the US financial system has four distinct new crises hit more or less simultaneously –oil & gold going parabolic (“speculators!”), stocks going haywire from that stupid rule change, the most highly-leveraged ARS (auction rate securities –see andrew cuomo) going bust, and real estate mkts freezing up in the hot spots.

I know, what rotton luck, eh?