Cox replaced the Democrat Donaldson in 2005 and the SEC has been controlled by the GOP since that time. The 2004 rule change allowing investment banks to increase their use of leverage by a factor of 3 or more in some cases was done by 3 Democrats and 2 Republicans.
It is possible that this was a climax selling day. Any recovery from this point will be slow under the best of the circumstances. Less than a year ago, the Dow hit 14,280 and from that number this average has now declined 40%. As I mentioned the other day in an email, it would be prudent to cut out all spending that is not absolutely necessary for at least 6 months until we have a better feel of how far this will go into the real economy.
I will continue to nibble but I am going to limit myself now to investment grade bonds in TC form that are now yielding 14 to 20% and just quit trying to catch the falling knife in closed end investments companies for now. It still seems prudent to me to reinvest dividends to buy additional shares of the closed end funds currently owned by me. That is simply a way to force an averaging down process that one day may look favorable sometime in the distant future.
I simply have to take advantage of the prices being offered in investment grade bonds. One closed today at a 70% discount to par value and at a 28% yield. A few other higher rated ones are yielding around 15% now.
I would think this recent action may very well sour millions on the market as an asset class. It will take a very long time for confidence to return.