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To: Jeffrey S. Mitchell who wrote (9057)	11/8/2005 11:09:35 AM
From: peter michaelson	Read Replies (2) \| Respond to of 12465

I think it's important to distinguish between two kinds of shorting. One type is the shorting by the creditors of toxic convertible/death spiral financing instruments. As retail shorters have known for years, in fact railed against, this financing does often destroy the market price of a stock and, finally, the company. Management is usually fully aware of what they are getting involved with, and there is a powerful conflict of interest for both the creditor and management. This financing is usually done by a desperate company, or a scammy one, that has little if any fundamental value in any case, e.g. Pet Quarters. The other type is shorting done without a conflict of interest. I think this distinction is far more powerfully explanatory than that between naked and 'clothed' shorting. I don't believe that naked shorting by retail investors, or even hedge funds, has a deleterious impact when it is not done in association with toxic convertible financing. In fact, I believe that shorting,whether naked or not, is a very important tool in keeping markets sane. As we know, some nations have no prohibition on naked shorting, and we also know that margin requirements already put a very substantial brake on shorting. The focus on naked shorting by managements of 'targeted' shorting is usually an effort to distract retail investors from the lack of fundamental value underlying their share price - in my opinion. Having summarised my view, I also would actively encourage opening up all the information and statistics to public view. The complicated nature of this beast along with the intentional obfuscation results in rampant misinformation such as the Time article above. Peter