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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (55047)	9/28/2001 2:01:50 PM
From: fishweed	Respond to of 57584

Rande - I believe MM don't even need an up-tick to short. fishweed

To: Rande Is who wrote (55047)	9/28/2001 2:10:45 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 57584

Rande, So, from everything I read it's already illegal everywhere, possibly for very good reasons, but you're saying we should sign a petition asking the President and the SEC and Dick Cheney to outlaw illegal shortselling overseas where it's already illegal. A couple of questions for you and then I'll go quietly: 1) How do you propose to enforce extraterritorially something that is already illegal where it happens and is being enforced already? I think the Green Berets and the Navy Seals are, for some reason, a bit preoccupied at the moment. When the NYSE and the SEC officials go overseas, I'm afraid their status is always limited to "guest." 2) Let's get down to basics. "Naked short selling" is simply short selling without going through the niceties of borrowing shares first. Assuming that the short seller's credit is good, which is generally between the broker and the client, what is it about borrowing the shares first from some musty institution's account which makes the short seller's market view somehow better? We allow people to buy half naked (the margin rules) based on their accounts and credit risk, why shouldn't we allow people to sell at least half naked (via margin rules rather than borrowing requirements)? Short sellers are already restricted via the uptick rule, isn't that enough? Delivery and closing of the transaction are not mutable, as I noted. Let's say you think INTC is a lousy stock and you sell 1000 shares to someone today at $X. But you don't borrow the shares in advance, you just enter into the contract (naked), knowing you will have to deliver the shares in 2 days. Before the end of the day you'll have to either borrow or buy the shares, in order to deliver in time, anyway. Why do you have to have the borrow in place before you make the sale? I'm not proposing a change in the rules (just yet), simply noting the way in which stock loan and shorting transactions are done. Remember, in these times of increased emotions and frenzied searches for something to prop this still overvalued but correcting market up--shorting stock is simply part of the way to make markets and price discovery more, not less, efficient. Increased activity is increased liquidity over the long term. Kb

To: Rande Is who wrote (55047)	9/28/2001 8:44:17 PM
From: Ga Bard	Read Replies (1) \| Respond to of 57584

Why can't the SEC follow suit for us here in America. The Securities and Exchange Commission and the Colombo Stock Exchange took the first positive steps towards introducing short selling to the Colombo market last week. As an initial step, the CSE and the SEC have formed a joint committee to make recommendations for the lending and borrowing of securities to facilitate short selling. Short selling gained its notorious fame after Malaysian President Mahathir Mohamad "naked short selling" a criminal offence punishable by death to save the Malaysian Stock Exchange from an agonising death caused by speculatvie naked trading. Short selling is a speculative practice where market players enter into contracts to buy or sell shares at pre-determined prices, without actually holding the shares. The type of short selling that is likely to be introduced to Colombo is short selling coupled with lending and borrowing. This will enable long term investors to lend the shares to their brokers, who in return will lend the shares to interested parties to short sell. SEC feels that this is a safer method of introducing short selling, rather than permitting naked short selling. Brokers will enter into contracts with both the lender and the borrower, to ensure the terms and conditions of repayment and time period. Both the lender and the broker will earn a fee from the transaction and the borrower will provide collateral against the borrowed stock. The contract can also include dividends and bonuses to be held in favour of the actual owner of shares. Notice this is a 3 way negotiation and not the way our system is set up. Why is it American long term investors are always penalized? "NO OWN - NO SELL" Petition: petitiononline.com Proud To Be An American Against Terrorism & Its Propaganda! :=) Gary Swancey