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Wall Street's New Rules Worry Traders

Temporary ban on short-selling causes fundamental shifts

By Nick McMaster, Newser Staff

Posted Sep 20, 2008 11:22 AM CDT

(Newser) – Stocks roared back to life yesterday on the government’s actions to stabilize the markets, but many traders expressed uncertainty about the new rules of the game, the New York Times reports. The temporary ban on short selling and the new requirement to disclose such trades have wreaked havoc with core mechanics of the market, causing computer glitches and erroneous trading prices in some instances.

Investors warn that the government’s actions, while generally accepted as necessary, may have unintended consequences down the line. And many exasperated traders have given up trying to do their jobs until things shake out. “Some of my clients are literally closing their books and going on their vacation,” said one analyst. “You come back when you know what the rules are.”

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President Bush delivers a statement about the economy and government efforts to remedy the crisis, Friday, Sept. 19, 2008. (AP Photo)

President Bush delivers a statement about the economy and government efforts to remedy the crisis, Friday, Sept. 19, 2008. (AP Photo/Susan Walsh)

Trader Vincent Picciotto studies his handheld device as he works on the floor of the New York Stock Exchange, Sept. 17, 2008. (AP Photo)

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Anyone who thinks they have a handle on where things are going is deluding themselves. - anonymous Wall Street broker

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Wall Street's New Rules Worry Traders