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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (10407)	10/23/2008 9:06:07 PM
From: Hawkmoon	1 Recommendation Read Replies (1) \| Respond to of 33421

are you saying that the problem with the market is the people shorting the market? Not at all.. Shorting against margined stock is entirely appropriate and provides equilibrium to the supply/demand curve in a market. If you borrow money to "juice" up your play, then it's fine for a brokerage to loan out those shares to a shorter. But there is a darker side to this in the form of Naked shorting and fails to deliver, which represents nothing more than counterfeiting of electronically held shares. The SEC and other authorities have tried to deny it, but their explanations have consistently fallen short given the perpetual Reg Sho status many companies have perpetually been on. It's a ready source of revenue for brokers to loan out shares, charge margin interest, all in hopes that they can drive a company into dissolution and no one has to clear anything because the company becomes a shell of it's former self. And it's been apparent that the manipulation of put options via the "synthetic short" stratety was the manner in which many hedgies got around those temporary shorting restrictions. Yes.. many of these companies have shaky fundamentals and deserved to be shorted. But then there are companies like RDN, with a $30 book value and some of the lowest exposure to sub-prime mortgages, which have been hammered to near delisting status. Btw.. thanks for bringing up the matter. It would appear that the Reg SHO list is decreasing markedly in length. That's a good sign and I see RDN is no longer listed on it. nyse.com finance.yahoo.com Hawk