We will agree to disagree then. Unless you have actual experience working with clients and regulators in the investment, financial services, and capital markets industry for a number of years, you might be less qualified to speak on this topic than you think.
Short selling does have a purpose, but naked short selling does not - it is essentially counterfeiting shares of publically traded stock. Just as counterfieting money can lead to the destabilization of a country’s currency, counterfeiting shares of stock leads to the destabilization of the financial markets.
Did you check out the 2 year chart on the VIX Index? That volatility spike is directly correlated with the removal of the Uptick Rule by the SEC.
By the way, I hope you’re still not defending the competence of Chris Cox as head of the SEC. Yesterday John McCain publically call for his dismissal and President Bush was forced to make a statement regarding Cox. He’s still standing by him, but Cox will be gone soon.
If Cox does not have the confidence of the investment community, he has performed poorly. The most important part of his job is to have investor confidence. I appreciate your perspective on this matter. I agree that naked short selling is dubious although I thought that some form of naked short selling was legal. On the uptick rule, I am not ready to declare its removal a bad practice. Given the climate now, there is no chance that allowing short sales on down ticks will be allowed so the debate does not matter.