The day when the market really takes el dumpo and the shorts have all been chased away....the longs will all be in fetal positions BEGGING for those shorts to cover. And they won’t be there. Then we’ll see that DJIA -1000 down day.
Yes, we will. Who's gonna be the first to post "I told d'ya so"?
Are you referring to a short squeeze, note, there will still be short selling, the only difference is that the one shorting must have concrete proof of having the access to the number of shares being shorted.
Being merely an agreement to purcase shares {perhaps for more shares than are in existence in the first place}, confidence that hedge fund shorters will provide a floor is somewhat underwhelming.
This is about NAKED shorting. These hedge funds are creating fraud and basically counterfeiting securities when they do not borrw shares they short. It results in excess shares in the market that the company has authorized. THIS FRAUD IS BiGgER THAN THE MORTGAGE MESS!
This action has destroyed thousands of companies. I pray they are serious about this!
For some reason, this subject requires some mental gymnastics I've never quite gotten the hang of. If the shorts have been chased away, how can there be longs in the game? I thought every short required a long to make the transaction complete.
It’s not about stopping short selling, it is about ensuring that short sellers
1) have a bona-fide borrow
2) have a T+3 settlement (preferably, imho, a pre-borrow/pre-settle)
2) are not re-shorting shares already borrowed and shorted
To allow short sellers to sell into a market without a real and unique borrow is tantamount to market fraud because it increases the supply of “shares” (which they are actually not, they are ‘share entitlements’ which are not registered securities according to the letter of the law). Economics 101 teaches that the result of increased supply of a commondity without a commensurate increase in demand usually results in a declining price. So as long as the shorts do not cover, or settle their borrow, or do not secure bona-fide and unique borrows, they succeed in creating inflation for ‘shares’ in the which in almost every case results in devaluation of the stock price.