The Psychology of Overconfidence
posted by anotherpanacea on Jul 27, 2009 - 82 comments

Rule 10a-1, otherwise known as the uptick rule, provided that, subject to certain exceptions, a listed security could only be sold short at or above the last sale price. The uptick rule was introduced in 1934 when the public blamed bear traders for the 1929 crash, and was eliminated in July of 2007 after a temporary pilot program. The SEC is now considering reinstating the rule, an effort buoyed by rumours that downtick short-selling may have facilitated an alleged 'bear raid' on Bear Stearns.
posted by anotherpanacea on Oct 26, 2008 - 14 comments

What's the link between:
1) the quickly-growing number of American homeowners becoming unable to pay their mortgages after their ARM's reset (a trend nicknamed "ARMageddon" -- applicable in the UK too), which is translating into soaring foreclosure rates, and in turn forcing at least 60 US semi-shady mortgage brokers to go belly-up in the past year (i.e. the "subprime meltdown"), and...
2) the recent implosion and impending financial bailout -- which may become the biggest since the Long Term Capital Management fiasco of 1998 -- of two Bear Stearns hedge funds which dealt in mortgage securities? [more inside]
posted by Asparagirl on Jul 11, 2007 - 123 comments