What editors at IBD say re: daytrade regulation
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E D I T O R I A L S
Another Senseless Act Of Regulation . . .
Date: 8/2/99
Details about the brutal killing spree in Atlanta Thursday are still coming in. But one thing is crystal clear. The do-gooders in government are ready to pounce with more regulation that'll have nothing to do with the murders.
Mark Barton's rampage through two stock brokerage offices is sure to intensify calls for more regulation and tough enforcement. Not of the criminal code that takes murderers off the street.
But rather of day trading in the stock market.
Reports indicate that Barton, a chemical salesman turned day trader, had taken a beating in the past week in the market. And Thursday's plunge was especially steep. That may be why he shot up the brokerage offices.
Naturally all the do-gooders will put those two things together and come up with five. The argument goes like this: Day trading is risky, people can lose a lot of money, when some people lose money they shoot up offices, therefore the government has to step in.
But where was the government when Barton's first wife and mother-in-law were killed six years ago in Alabama?
Why did the Alabama police, who considered him a suspect, fail to arrest him? Police in Georgia, where Barton lived, told the Alabama force they had enough evidence to justify an arrest. Why did the Alabama police go so far as to tell Georgia police to back off?
These questions will no doubt surface. But there's also no doubt that those questions - and answers - will drown in the howling for more gun control laws and yes, more regulation of trading in the big, bad stock market.
The position of the gun control crowd is a given. Guns are bad, and killing sprees wouldn't happen if guns were banned.
The data don't support such an argument, but it will still be made - a la Littleton, Colo. - in the wake of Barton's murders. That debate will continue to rage.
But now Barton's spree will be used to justify all sorts of intrusions into the investment arena.
We can see it now. Day traders will have to get a license, maybe pass a psychological evaluation before getting one. Day traders will have to prove to the government they have the financial means to invest daily.
Who knows? Maybe the do-gooders will push for a ''cooling off'' period between trades - rendering moot the notion of day trading. Or even a 30-day waiting period between getting a license and executing the first trade. Maybe day trading should just be banned altogether.
And if these kinds of rules are good for day traders, why not for every investor? After all, there's risk in long- term investments, and you can lose money in those, too.
If that's logical, then why not regulate who can buy a house and when? Housing values have been known to fall, and we wouldn't want a disgruntled homeowner taking it out on his neighbors with a gun.
Go down the list of possible investments and apply the same thinking. Art doesn't always appreciate in value; neither do coins.
And how about gold? It's dropped 75% in value over the last two decades. Can't take the chance that impoverished gold bugs could shoot up a trading pit. Better regulate them to reduce that risk. You get the idea.
The point in the Atlanta shootings is that Barton committed an ugly act of violence. And it doesn't appear that it was the first one.
Better enforcement of the criminal code in Alabama might have prevented his rampage. But there's no question in this case: Barton is responsible, not day trading, not the stock market, not the possibility of risk.
But don't tell that to the do-gooders. Their minds are already made up.
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