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My evil little Machiavellian mind is at work again.

If the Uptick Rule and Naked Shorts are going to be reinstated or be enforced in short order the following is true.

The Fed and Treasury saw that a bubble was being created by speculation in commodities. It was being done by the same people that brought you the sub prime mess. This was not going to be tolerated, so they let the wolves prey upon the wolves. Thus Lehman, Merill and AIG have fallen. Their might be a coupla of others out there but they are chastened and have to look out for their very survival. Namely CITI. I doubt Morgan. With the speculation and speculators out of the market the price of oil should fall to the $70 range.

BTW: The price of oil and commodities was what was proping up Lehman, Merrill and AIG. Once the price started downwards their source of easy money dried up and they were forced to sell off their good assets namely stocks to keep themsleves afloat. Once that was gone well the wolves set in and finished them off.

When Governor Paterson (D) of NY called the FED and pleaded with them to bail out AIG because of the Public Employee Pension Funds that cleared the political way of any Democratic opposition to lending money to AIG. Which was too big to fail and the Fed had to act as lender of last resort.

There is also a feeling here that the Dems gave up something else. Namely who is in charge of the economy...The FED, Treasury and SEC. If the Dems get in they are going to be one whipped puppy, and gone will be their grandiose plans for reform. Because not only is the money gone, but they can see first hand that it hits their prime constituency where it hurts in the wallet eg Pension Fund.

One might say a revolution or coup d'etat has taken place. For the Dems have seen just who wields the power in the USA and world.