No. The problem is the counterfeiting of shares that are perpetually sold to the markets which in turn creates an artificial supply of stock that will NEVER be accounted for unless someone steps forward at the SEC and does their job. I am not fully convinced yet that the SEC will actually follow through with the job they should have finished long ago but this debacle could be the gateway to reform.
The uptick rule was put in place in the first place and stood for a long time because it serves a purpose.
Clrealy, short selling is essential to maintain orderly and sytematic markets. It becomes problematic when going long requires payment for delivery of securities and naked shorting requires little or NO capital expenditure. This puts a knife in 'Demand's' hand and gun in 'Supply's' hand, AIMHO.
Re: is it true? [that shorts are breaking the system]
This obviously has nothing to do with anything other than the Nov elections.
Aha - an area where we partially disagree. Shorts can generally only topple the vulnerable - but vulnerable is all relative. E.g. there is the great story of Soros betting against the Kiwi and then deploying (via leverage) more assets to break the Kiwi than existed in their version of the fed. Yeah, vulnerable. But not really.
Highly recommend the book Liar's Poker - entertaining read and informative about cultural mindset of large hunks of the financial community.
In this case the vulnerability was a combo of things - e.g. the stupid race to the bottom of mortgage loan verification or the change in finance guidelines forcing mark to market making a quick positive feedback loop possible (i.e. much more vulnerable to heavy shorting or a panic).
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