Comments on: Get Shorty

By: Jonathan

Jonathan — Sun, 03 Aug 2008 09:08:37 +0000

There seems to some sort of desire to “punish” the evil short sellers that exist in our markets. Speculation and shorting have become a popular excuse for the conditions that exist in these markets. Many wish to blame the traders for being irresponsible, as well as “unethical”, in trading against trending down securities. However, the rules are the rules. Irrespective of the protected financials recently listed, naked shorting is not illegal. Shorting against the uptick is also not currently illegal. Perhaps the recent failures of the equities markets is due more to the failure of the companies themselves than these so-called speculators. By the way, speculation is an expensive business. The trades may be speculative, but the dollars are quite real. Short sellers, naked or otherwise, pump a lot of cash into our markets. As far as the companies that are targeted by short sellers, one look at the current shares sold short list reveals a not to surprising fact. Many of the companies that are being sold short are borderline insolvent. Don’t blame the traders for the mistakes of poor accounting. Blame the companies and their balance sheets. Thanks Liz for a timly and accurate article! Good deal!

By: Chris

Chris — Sun, 03 Aug 2008 05:35:56 +0000

Seems almost everything I keep reading and hearing about, with regards to short selling and naked shorting, is from the perspective of the broker/dealer or other such parties. I’d really like to know what restitution exists for the share holder of a naked short? I.E., What happens to the investor who purchases a stock that turns out to be non-existant when accounting time rolls around? Does he/she get squeezed twice if he’s an American taxpayer – once, when he invests money (see, ‘loses money’) in a share that doesn’t exist; a second time, when the taxpayers are given the bill to bail-out a financial institution that knowingly participated in naked shorting? Just curious. Would love to hear some opinions specific to the consumer’s best interest.

By: Greedom

Greedom — Thu, 31 Jul 2008 13:26:23 +0000

Gee,

If a naked short doesn’t require the actual stock to be borrowed, how is it naked shorting can involve dissolvency in a stock JUST by having more stocks in transactions than exist ?

If there is no regulation on how many magical shares you can never borrowed that never existed for your token shares your borrowing – that again, don’t exist – how can there be ANY integrity in ANY stock price ?

All is well until someone fails using it or abuses it – naked shorting.

And then at the end of the day ? Oh – sorry everybody who reacted as IF there was serious activity on the stock – it was naked shorting that gave the illusion it was diving ? It never really was, but now it’s too late, the company burned.

I think analogies to naked shorting should be entertaining.

By: Dunno

Dunno — Thu, 31 Jul 2008 02:15:02 +0000

This SEC is as corrupt as can be.

Did Joe Public benefit from any of these rule changes? NO
Did the publicly traded companies benefit? NO

Did the HEDGE FUNDS? Of course.

Who is COX helping? the people his suppose to protect or the hedge funds that will short every stock to ZERO given the chance?

Corrupt as they come.

By: mark mchugh

mark mchugh — Wed, 30 Jul 2008 19:14:15 +0000

I was unaware of the rule change in 2005, so thanks. That rule change, like the removal of the uptick rule is one of those “little” changes that doesn’t matter until it matters, which is also the point when it’s too late. The synergy between the two is not unlike that of gasoline and matches.

I always thought of the uptick rule as “folk wisdom”, much like, “don’t give guns to monkeys.” Now that there is an armed militia of primates roaming the exchanges, the investment banks don’t like getting shot at.