Investing With the Enemy?

Is the New York Stock Exchange (NYX - commentary - Cramer's Take)the enemy of your investments? When I read the transcript of an excellent Bloomberg interview with Larry Leibowitz, the head of the U.S. Technology area at the NYSE, about the uptick rule, I can't help but wonder whether the Exchange is going to be your enemy in this fight to re-level the playing field.

First, Leibowitz describes how the exchange must be sure to continue to have shorting to provide liquidity, something the rule if reenacted can hamper. Huh? We had plenty of liquidity with the rule. Total canard, as we know from 70 years of trading with the rule.

Plus, contributor Eric Oberg has shown how fatuous this reasoning can be when the unchecked short-sellers overwhelm the market and therefore provide no liquidity at all. In fact they provide the opposite: a vacuum of liquidity, something Leibowitz has to know.

The SEC has also said that with the uptick rule short-sellers are liquidity providers but without it they can be liquidity takers. The argument fails to hold up under the stress of the market in the almost two years since the SEC suspended the rule.

Second, the Exchange sounds like it wants to drag its feet to implement any change. "It could take anywhere from a couple of months to even longer based on how many changes are made by which parties," Leibowitz says.

Wait a second -- this argument's been percolating for months and you mean to tell me they aren't ready if it happens? Oh please. If the SEC skips the lengthy comment period and reenacts the rule come May, I bet they will be ready.

Then we come to the real reason why the Exchange doesn't want the uptick rule reinstated: profits. Much-needed profits for a company that has one of the worst performing stocks of its own listings.

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Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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