Replies to post #444 on NO QUARTER FOR CORRUPTION (Focussing on The Fed./F

[bartermania]

Well, IMO...I'd love to see my my position become real/reality. My worldview hasn't existed for centuries...I say let's it to give it a try. Yes, what I seek would be a revolution of sorts...and it would dramatically alter the current capital system, Wall St. and so on. But, it would also simply put...clear-up a lot of this deep double talk, stock mumbo-jumbo/jargon, systemic scamming, manipulative insider advantages, and destructive intents/interests.

I seek a much more plain, simple, transparent, fair, justice, equitable, non-entropic and growth oriented society. IMO, eliminating shorting would be a very big step in this direction...and IMSO, it's the right/correct direction.

I say: it's about time it's given a try. I say: do it.

[rrufff]

I have to somewhat disagree with you. My position is probably somewhere between both of you.

I am in favor of traditional shorting, as normal trading, subject to very strict limits relative to borrowing shares and settlement of trades.

I am not in favor of allowing shorting in manipulative transactions, perhaps those that you may be describing. Much, if not most, of the problem area has been discount equity and convertible deals, which have an inherent incentive to drive a stock's price down. Usually, we retail shareholders are the last to know.

I do not like "sure thing" deals which basically are the taking of money from retail shareholders and giving it to insiders and vulture funders, with a share to the distribution network of perhaps hedge funds and MM's.

I'd prefer full disclosure and would prevent insider dumping in advance using the same logic, that is, regulators should realize that their first job is to protect and inform retail investors and that this should be the base of fair and equitable markets.

If the net result is that companies have to declare that they are required to borrow at 50%, then fully disclose it, let the share price tank, and then we retail investors can decide if it is a good investment. What happens now is that we are led by pumping PR's to believe that everything is great. Then insiders, vultures, hedgies and others, do a deal, make their "sure thing" profits, pile on with naked or advance shorting, resulting in stocks that go down 50-90% in value after such a deal.

Why should there be a policy to keep this information from retail investors? It just doesn't make sense.

[Telephonics]

The issue is not about stopping all shorting. The issue is to force brokers to deliver the certificates to the buyer as our regulated exchanges require. Do you understand how a naked shorter gets his profits?? In very simple terms. To short a stock the shorter must have a margin account. In that account he must hold asses (stocks,cash bonds etc) with a face Bale of 150% of the value of the short position he wishes to establish. When those shares are not delivered by the broker to the buyer it creates a naked short and synthetically increases the apparent float. With the number of shares now apparently available for trading being increase the share value drops. As the share value drops so does the security requirement in the shorters margin account. He can at that point withdraw cash from his account or use the unused security to back more short sales. No only is this contrary to SECV regulations but is also contrary to our regulated exchange trading regulations. It is interesting to note that today on our regulated exchanges about 25% of all trades are shorts. On our rapidly growing electronic exchanges which provide much better anonymity to traders the similar short trading statistic is now 40% and growing.