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Could anyone name a company that was financially sound and stabil and was taken down by naked short selling??? And I don't mean Overstock.com...

My bet is that it is hard/impossible to find such a company. So an argument could be made that naked short selling just fastens the inevitable...I am not for it, but make an argument against this point...

If the company actually has real value, buyers would/should discover sooner or later that they are provided a HUGE buying opportunity by this naked shortselling and the market is going to correct the price UPWARD.... After all, those huge short positions need to be covered at some point...
 
Quote from Pekelo:

Could anyone name a company that was financially sound and stabil and was taken down by naked short selling??? And I don't mean Overstock.com...

My bet is that it is hard/impossible to find such a company. So an argument could be made that naked short selling just fastens the inevitable...I am not for it, but make an argument against this point...
More...

you would need a definition of financially sound and stable. IMO, not a single bank is financially sound and stable due to the necessity of existence of FDIC. Therefore, naked short selling of bank stocks is criminal, unlike normal short selling. I agree that normal short selling could delay the inevitable, but sometimes time is all that is required for people/employees to make preparations for the bad times to come.

No, if the company goes bankrupt you dont have to cover your shorts
 
Quote from college_trad3r:

... not a single bank is financially sound and stable

So naked short selling Overstock.com (or any non-bank stock) is OK?

I agree that normal short selling could delay the inevitable,

You wanted to say couldn't...

but sometimes time is all that is required for people/employees to make preparations for the bad times to come.

You mean dumping their company stocks from their 401K on the unsuspecting public?

No, if the company goes bankrupt you dont have to cover your shorts

The point was, if the pricedrop is temporary, when the market discovers that the stock is unjustly underpriced huge shortsellers can be caught in a rally and will get burnt....
 
Thats funny - the entire financial system brought down by naked shorting.

Only about 1 or 2 people have made more than 1 billion on shorting the Market in the last year for their firms-

John Paulson made a bunch, and thats it. Unless you have evidence contrary to that, you might want to readjust your rear view mirror.

Where did all the other money go?

This Market was like a baseball card... you bought it from a dealer at a flea market for $100, and you sold it for $8 when the Market turned soured. The money simply disappeared because there was NO value.
 
Quote from Pekelo:

If the company actually has real value, buyers would/should discover sooner or later that they are provided a HUGE buying opportunity by this naked shortselling and the market is going to correct the price UPWARD.... After all, those huge short positions need to be covered at some point...
More...

You miss the point. When a company's market is under attack it is hard to distinguish between the attack itself and the potential that maybe it was you who were wrong. This is why such attacks work.

Examples of this happen all the time. Planted negative news, old news, irrelevant news is followed by a major selloff initiated by the short selling community. Investors, wary of how far it will fall will take their losses to protect further losses and work on figuring out what happened after the fact. The net result in the effort is that the market's equilibrium changed without cause but changed anyway with many investors who believed in the company now out of teh market and out for good. Once burned it is difficult to draw those same investors back into the market.
 
Ooohh. Our little liberal wants to "shoot" somebody? What about gun control? Your hero and man-love object Barry O. is all for it?

As usual, you don't understand anything about the topic. This is a bigger issue than anything Oscama is trying to fix (at a huge cost to generations), and he won't touch it with a 10-foot pole

Quote from IShopAtPublix:

I want to shoot the person who made that video. Yeah, it was not billions, hundreds of billions or maybe trillions of dollars in retarded contracts that Lehman&Bear engaged it was the evil shortsellers who brought them down.

Naked short selling allowed people to make a quick buck on companies that were doomed anyway. I wonder why nobody tried to naked short sell wal mart?
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Quote from patchie:

You miss the point. When a company's market is under attack it is hard to distinguish between the attack itself and the potential that maybe it was you who were wrong.
Examples of this happen all the time. Planted negative news, old news, irrelevant news is followed by a major selloff initiated by the short selling community.
More...

But it works the opposite way too! Planted positive news, irrelevant CNBC/Cramer pushing, analysts pumping, etc can push a completely shitty company to new highs and you, who correctly valued the company and shorted it legally gets burnt...

So what is the difference???

Even without naked short selling OR short selling altogether stockprices can fall drasticly no matter what, if the stockbuyers correctly value a shitty company. We got pretty decent drops AFTER shortselling was suspended...
 
Quote from Pekelo:

Quote from college_trad3r:

... not a single bank is financially sound and stable

So naked short selling Overstock.com (or any non-bank stock) is OK?

I agree that normal short selling could delay the inevitable,

You wanted to say couldn't...

but sometimes time is all that is required for people/employees to make preparations for the bad times to come.

You mean dumping their company stocks from their 401K on the unsuspecting public?

No, if the company goes bankrupt you dont have to cover your shorts

The point was, if the pricedrop is temporary, when the market discovers that the stock is unjustly underpriced huge shortsellers can be caught in a rally and will get burnt....
More...

No, that does not make it OK. But financial instutions are much more important then regular companies, because they lend money to regular companies

Could, not couldn't

No, to find external funding. Whether that is beneficial to society in the end (that the company provides a service) doesn't matter. The same reason why short-selling should be legal, is the same reason why naked short-selling should be illegal

Naked short selling leads to exacerbated vicious circles or selling and more selling which feeds on itself.
That is the whole essence, that's why it's worser then regular short-selling.

Also, the ban on short-selling was ban on regular short-selling, not just naked short-selling. Hedgers needed to sell their longs also
 
Quote from flytiger:

You have a couple of loose wires up there, pal.

What happened to the rule of law? Oh, I forgot. Look around. There was no rule of law. And that's how we got here.
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Actually, you are Wrong.

There was a rule of law regarding how we got here. It was called the "Commodity Futures Modernization Act of 2000".

It allowed for the de-regulation of credit default swaps, the Enron "loophole" that gamed the California power grid and threatened the economy of the world's 6th largest economy ( at the time), and the ability for WTI crude oil to trade overseas electronically in London and Dubai without any position limits or CFTC oversight whatsoever.

This legislation was spearheaded by none other than Republican's Phil Gramm, Pete Fitzgerald, and Dick Luger. Not even a committee hearing on the legislation, and not even a recorded vote!

All conveniently put into the "FY2001 Appropriations Bill"

While many of you battle back and forth about "naked short-selling", I believe that you miss the bigger picture of where all of the de-regulated LEVERAGE came into being in the first place.
 
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