Exactly. You're beginning to understand my point, which is that the system is ripe (designed?) for abuse.
Even a seemingly simple question such as percentage of total fails long/short can't be answered because, in the words of the prof's, market participants are not required to identify naked short sales, which makes them difficult to study.
So the next best thing is to count the FTD's. Groan, but ok.
Next, and perhaps most difficult, is to try and understand the nooks and crannies of the trading and settlement systems: Broker-level netting, pre-netting, Stock Borrow Program, ex-clearing and off-shore failures. Who knows what else.
If anyone is interested, Patrick Byrne and Floyd Norris continue to have a somewhat civilized email discussion about all this in the NYTimes.
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