Short selling destabilizes a market when there is leverage, that is easy credit and in our example of the stock market margined accounts, and in that respect, unlike in other commodities or even merchant order and pay on delivery sales transactions, enabled the OVERSOLD downward spiral we have been enduring. In theory you are correct, short selling theoretically is to lend stability, but in practice this has not been true since the 1950s. One just needs to examine the sell offs of the DOW chart since 1929 to see that fact. An overhaul of the Short Selling regulations are needed, and DISCLOSURE TO THE SHAREHOLDERS OF RECORD and FREE CONTRACT NEGOTIATIONS for a cut or slice or fee for the profits expectancy are what ought to be paid to or offered to the shareholder of record, they are the owner, no one would disagree if we were talking about your local garage renting out your automobile without your knowledge, stocks should be given the same ownership rights and disclosure rights as one give to other property owners. When money is put into a Bank, its FIDC insured so any bad loans made by the bank borrowing your money has no effect on you the depositor and owner of the money, a dollar is still a dollar.....this does not happen when your broker borrows your shares to a short seller, who bets against your best interests and uses your shares to drive down the value of your stock, to devalue or depreciate your stock, so that you are left with less than a dollar...there is no FIDC insurance for the effects of short selling, you are just robbed without any compensation, not even a fee or interest, the brokerage house earns and pockets those fees and interest and commissions that the short seller pays to harm you, their loyal customer or client, when these brokerage houses breach their duty of equal loyalty to you. I say a class action or regulation change is in order.
I am,
Truly your$,
-Crystal Ball |
