Yup - good article. I saw that when it first came out, but it...

Yup - good article. I saw that when it first came out, but it has been updated a bit, here and there.

One difference from the article and our market (the article is Canadian I seem to recall) is that NAKED shorting IS banned here in Australia. But the big problem WE have is that there are still bastards out there who will lend out OUR shares - mainly if they're on margin.

Wholly-owned and paid-for shares can't/shouldn't be lent out. But the argument is that shares bought on margin are still under the control of the bank or financial institution you bought them from or through. And they lend them out for COVERED shorting.

But the principle is exactly the same.

I have posted many times that I think shorting should be abolished - it is a purely contrived process designed to essentially steal money. My example has always been:

"Oh, I sold your house last week, by the way. But don't worry, I bought it back yesterday, so it's still yours. But I sold it for 500k and bought it back for 300k. So I made a nice 200k profit, and the intrinsic value of the housing market around where you live has just been busted! But don't worry - you still have your house (worth 300k now)".

Shorting contributes NOTHING to the market except bad stuff. All the bleating about "adding liquidity" is pure unadulterated crap. That is a meaningless phrase of weasel words. And all that stuff about their function being to burst bubbles - same deal. They contribute no wealth for shareholders - just their own pockets. And they don't invest in businesses - the prime function of a stock market - they just fiddle the shares to make money at the expense of everyone else.

They are nothing but thieves, shysters, and conmen. And shorting shold be banned - period.

I have no problem with people simply SELLING stock - which can push a price down. That is legitimate trading, and of course is the right of everyone - as long as they OWN the stock having bought it in the first place - NOT just borrowed it.

I have several more articles along the same lines as the one above, but I won't bore you with them here - the sentiment is the same. Ban shorting!