Say I was to borrow the title of your $500K house from your bank (without your knowledge) along with the titles of another 100 properties in your immediate neighbourhood. I then start selling these properties on the open market and the additional supply caused the market value of your home to fall to $450k. I then buy back your home and pass the title back to your bank (without your knowledge of course). I then pocket the $50k from your house and whatever else I've earnt from the other properties and leave you with a property that's worth $450k.
Sounds fair doensn't it? Would there be an uproar if this was to occur? Why then is shorting allowed on the share market?
