Should the logic extend to other assets? Should I be able to short sell your house if I think you paid too much or if I think your contractor was a crook or if you failed to fully disclose on your application for a building permit? should I be encouraged to go to the local building inspector and point out deficiencies in your construction and then publish this information on real estate blogs? Should I be encouraged to claim that you are a real estate fraud promoter, someone who has defrauded the community? Should I investigate those to whom you may want to sell your house for "suitability" for the neighborhood? Are you trying to sell your home to those the neighbors may consider of a "type" not encouraged? What if your home design was a bit "different?" What if your yard is not weeded properly or your trash not pulled to the curb? Perhaps repeated generic bash of your home and situation would affect the price of your home to the benefit of the short seller?
There are funds that purport to provide a market for those to participate and benefit from failling real estate prices and there have been indices provided for which there has been trading, placing of bets via futures and options.
Here's another interesting comment from Patch's blog:
Re: In reponse To Anthony Elgindy By Gary on 12/27/2007 1:43 PM
There's a reason this guy's in jail... he has no moral compass what-so-ever!
By his reasoning, a Real Estate investor ought to be able to "short-sell" someone else's house if they think the owners have overvalued it on the market... driving down the prices in whatever housing markets "THEY" believe are overvalued... and if you live in that neighborhood, make money on the devaluation of YOUR property in the process.
Is anyone ready to sign up for that?
Someone needs to send this guy to a basic "101" Economics Class on Supply and Demand. Free Markets regulated by Supply and Demand sets the only fair value for any type of resource.
In basic Economic Theory, anything and everything that someone might want to own is referred to as a Resource. And all resources by definition are "limited" in that there is a finite amount that is available. Even the number of grains of sand in the Oceans have a finite limit... although the volume is admittedly quite sizable. But, that's why sand is relatively cheap compared to Diamonds, Gold or even Oil... which have much more limited supplies. In addition, the price for all these commodities is dictated by how much demand exists at any given point in time compared to the supply that exists from owners who are willing to sell.
No one ever said "Demand" for a particular resource has to be set by rational thought. In fact, what I value something at can be very different than how anyone else values that resource. That's my right as an owner. NSS takes away my right as an investor to value a security as I feel it should be valued. In other words, it should be my right to decide at what Price, if any, I'm willing to sell... and even whether I want to make it available on the "Stock Borrow" Program.
Now there's a real winner of a program! Would any of us be willing to let our Bank or other speculators borrow our personal property without our permission... and then also keep the interest?
More to the point of NSS, would any of us allow real estate speculators to make up false property titles in our neighborhoods, in effect creating titles to property that doesn't exist, just so they can drive the price of our houses down for their own financial benefits??? Of course not... the whole concept is absurd!
Advocates of NSS always talk about "Liquidity in the Markets". THAT'S SUCH A BOGUS ARGUMENT! All they are saying is they want to artificially create Supply when "THEY" believe Demand is too high for a specific security. The truth is, the market as a whole will decide the true value of a security on it's own... as facts become known over time.
The bottom line is... and getting past all the rhetoric... these folks were illegally creating securities that didn't exist for their own financial gain. Let's call a spade a spade... that's called Counterfeiting. Again, there is a reason he is in jail. What a joke!
If the owners of the company can be accused of "Pumping and Dumping", Naked Shorters are equally guilty of the reverse tactic of creating artificial Supply that exceeds Demand and forces the result they want... the plummeting value of the stock. Both tactics are morally wrong... and Illegal!
Naked Shorters set themselves up as Judge and Jury on valuing the companies they targeted, circumventing free market processes. Their only motivation was to achieve wealth from manipulation of the markets. They could care less about the companies they put out of business, the employees who as a result lose their jobs, or the investors who lose their retirement funds... plain and simple!
AIMO,
- Gary |
