shorts are good or bad, page-17

It's really unfortunate that so many are misinformed or engage in flawed thinking on this issue.

Look at it this way, markets are where people get to express their opinion on the worth of a stock. Without short sales, only holders of a stock can express their opinion that the market price is too high (by selling) while anyone can express their opinion that the market price is too low (by buying). Lack of shorting clearly interferes with true price discovery.

Bring back the uptick rule and make the penalty for failure to deliver punitive, but banning short selling altogether is insanity. There is now a pocket of air below prices and no one will have any reason to buy if confidence takes a big hit. This is very bad.