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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: The Vet who wrote (60424)	7/20/2008 3:14:46 PM
From: LLCF	Read Replies (2) of 78438

<Cox is the head of the SEC and he said it was legal. > NOT! <There is no risk to those naked short sellers.> Dude, that's not true at all.. the rules are there..go try and find a brokerage house that will let you do that. The "naked" stuff that goes on is happening because the "boutique" ( ala Bear Stearns) BROKERS aren't doing their job, or are lazy or greedy. They make good money off stock loan for sure, but they ARENT the ones making a killing on being short... Here's a good summation: <<The biggest potential headache: Existing rules allow brokers to sell stock short as long as they reasonably believe they can locate the shares and deliver them on time. Now, several years ago we here at NotMakingThisUp laid out how every hedge fund we’ve ever known goes about shorting a stock: they ask their broker for a "locate." If the broker says the shares are located, the hedge fund borrows the shares and shorts them. If shares can't be located, the hedge fund doesn't sell them. >> jeffmatthewsisnotmakingthisup.blogspot.com Sure if the SEC were on these guys the rules would get enforced better and shorting would "tighten up" in the sense that there would be less slippage AND LESS OUTRIGHT CHEATING IN THOSE HARD TO BORROW SECURITIES. Don't get me wrong, there is plenty of futzing around with short selling... BUT it's NOT because the rules aren't there, they have beens since the 30's as far as I know AND, AND, AND... NO broker want to lose their licence!! ESPECIALLY WHEN THEY CAN JUST BORROW THE STOCK!! The most important thing to undersand here is that 1.) The short sellers are mostly brokers clients, not the brokers, 2.) the cheating is going on in the fringe "hard to borrow" stuff... I repeat, if you can just borrow the stock then you wouldn't risk getting caught. As for shorting in general... why don't you go back and look at the short interest in issues like Microsoft when it went from .20 to $200 in the 80's... OR ANY STOCK IN THE BULL MARKET... it was rather large... and all professionals! Go figure. DAK

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