In a September 30 post on Time.com's Swampland blog, Washington bureau chief Jay Carney claimed that Sen. John McCain's “campaign has released a 60-second ad that uses [President] Bill Clinton's words to pin the blame for the mortgage crisis on Democrats” without noting that in the interview clipped in the ad, Clinton actually said that “the biggest mistake” was the action taken by the federal Securities and Exchange Commission (SEC) while President Bush was in office to repeal a regulation on certain stock-market trades. Carney also reported: “The link to [Sen. Barack] Obama is tenuous -- and nowhere does the ad acknowledge the fact that Fannie [Mae] and Freddie [Mac] were not the primary causes of the broader crisis -- but it could undercut Democratic arguments that Bush and the Republicans are primarily responsible.”

In the ad, the narrator stated that “Bill Clinton knows who was responsible” for the mortgage crisis. The ad then showed a clip of a September 25 interview on ABC's Good Morning America in which Clinton said, “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” The ad narrator then stated, “You're right, Mr. President. It didn't have to happen.”

However, Carney did not note that in the same interview, Clinton stated: “I think the biggest mistake, by the way, that contributed to the current circumstance that almost nobody talks about, is the repeal after decades of something called the uptick rule, which allowed the hedge funds, heavily leveraged, and others to just drive down the market without any kind of automatic stoppers.” In a separate interview aired that day with Matt Lauer, co-host of NBC's Today, Clinton stated of the financial situation: "[T]his thing really took off when the SEC, under this administration, exercised less oversight and they got rid of something called the uptick rule, which enabled betting down on housing stocks to go crazy."

The uptick rule, which was created in 1938, was a securities trading rule that regulated market short selling, the act of selling a stock that an investor does not own (but borrows from a broker or someone else) in anticipation that the stock's price will decrease.

After a June 13, 2007, decision that became effective July 3, 2007, the SEC issued a final rule that repealed Rule 10a-1, the uptick rule, which the SEC had previously suspended as part of a pilot program. From the SEC release discussing the rule change:

The Commission adopted Rule 10a-1 in 1938 after several years of considering the effects of short selling in a declining market. Rule 10a-1 provides that, subject to certain exceptions, a security may be sold short (A) at a price above the price at which the immediately preceding sale was effected (plus tick), or (B) at the last sale price if it is higher that the last different price (zero-plus tick). Short sales are not permitted on minus ticks or zero-minus ticks, subject to narrow exceptions. The operation of these provisions is commonly described as the “tick test.” The tick test applies only to listed securities, other than Nasdaq-listed securities, traded on an exchange, or otherwise.

In the “Supplementary Information” included with the final rule, the SEC stated:

The core provisions of Rule 10a-1 have remained virtually unchanged since its adoption almost 70 years ago. Over the years, however, in response to changes in the securities markets, including changes in trading strategies and systems used in the marketplace, the Commission has added exceptions to Rule 10a-1 and granted numerous written requests for relief from the rule's restrictions. These requests for exemptive relief have increased dramatically in recent years in response to significant developments in the securities markets, such as the increased use of matching systems that execute trades at independently derived prices during random times within specific time intervals and the spread of fully automated markets. Also, decimal pricing increments have substantially reduced the difficulty of short selling on an uptick. In addition, under current price test regulation, different price tests apply to different securities trading in different markets and apply generally only to large or more actively-traded securities. [footnotes omitted]

The SEC also stated that it had previously suspended the uptick rule for certain stocks as part of a pilot program in an order that took effect in 2005. That pilot program was extended and remained in effect at the time the SEC adopted the final rule.

From Carney's blog post, which included video of McCain's ad:

The McCain campaign has released a 60-second ad that uses Bill Clinton's words to pin the blame for the mortgage crisis on Democrats. The link to Obama is tenuous -- and nowhere does the ad acknowledge the fact that Fannie and Freddie were not the primary causes of the broader crisis -- but it could undercut Democratic arguments that Bush and the Republicans are primarily responsible. One imagines this is not the kind of help the Obama campaign was hoping to get from the former president.

From the September 25 broadcast of ABC's Good Morning America:

CUOMO: A little surprising to you to hear the Democrats saying, “This came out of nowhere. This is all about the Republicans. We had nothing to do with this.” Nancy Pelosi saying it. She signed the '99 Gramm bill. She knew what was going on with the SEC. They're all sophisticated people. Is that playing politics in this situation?

CLINTON: Well, maybe everybody does that a little bit. I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president to put some standards and tighten up a little on Fannie Mae and Freddie Mac. [break] I think the biggest mistake, by the way, that contributed to the current circumstance that almost nobody talks about, is the repeal after decades of something called the uptick rule --

CUOMO: Mm-hmm.

CLINTON: -- which allowed the hedge funds, heavily leveraged, and others to just drive down the market without any kind of automatic stoppers. But we are where we are. I think the most important thing is that you got two candidates for president saying, “Let's try to minimize the partisan differences. We'll have plenty of time later to look at who caused this and what mistakes were made. Let's figure out what to do now and go forward.”

From the September 25 broadcast of NBC's Today:

LAUER: The president said we have time to debate the origins of this crisis, but last night in his speech to the nation, he also said the roots go back more than a decade. You can do the math there, what he was suggesting. He's suggesting the roots that are with your administration. How do you respond to that?

CLINTON: Well, I think he's suggesting that when we -- I signed a bill that the banking industry wanted that let them get into securities issuance. There are some people who believe that that bill enabled them to somehow participate in some of the riskier housing investments. I disagree with that. That bill primarily enabled them to -- like the Bank of America, to buy Merrill Lynch here without a hitch. And I think that helped to stabilize the situation.

I think the main thing that you could blame the Democrats for, maybe, is that we should have made more of the problems of Fannie Mae and Freddie Mac and maybe the -- and tried more aggressively to regulate derivatives. But this thing really took off when the SEC, under this administration, exercised less oversight and they got rid of something called the uptick rule, which enabled betting down --

LAUER: Right.

CLINTON: -- on housing stocks to go crazy.