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"No Shorting. Well, Except For You. Ok, You Too, I Guess."

Well, we all knew they blew it, the only question was how long it was going to take them to admit it. And given that the rule was only scheduled to last ten days at first, we might have endured the entire thing without so much as a "woops."
Of course, I mean the SEC's reversal on several provisions of their short selling restrictions. The Wall Street Journal reports:

WASHINGTON -- The Securities and Exchange Commission said shortly after midnight Monday that it would revise rules to curb short selling that it had issued just three days before.
The SEC's latest change of direction on short selling caught some market participants off guard and prompted criticism that the agency has miscalculated the impact of its rulemaking.
The SEC, in a release issued at 12:26 a.m. EST Monday, reversed a position it had taken Friday when it said that market makers couldn't short financial stocks after Friday. The new rules as of Monday: Those engaged in bona fide market making and hedging activity, including in derivative contracts, could continue to short.

I'm utterly fascinated to see what "bona fide market making and hedging activity" is.
This, of course, is the problem with hasty rules squeezed off to quiet the rambunctious third graders quickly. You impose restrictions based on no data at all that they might help the market, but that have a psychological "we're in control" feel to them. Action is taken. Confidence is restored. That is, unless the rule is so moronic that it causes more problems than it solves. So then what do you do? Backtrack halfway and open some more loopholes? Now you look like the bumbling idiots we always knew you were. The problem is, now everyone knows, and everyone feels more than a little bit molested.
SEC Quickly Revises Short-Selling Rules [Wall Street Journal]