Anyone who bets on a world depression should live the rest of their days in jail.
There’s a difference between betting on a world depression and taking steps to protect oneself from forces that cannot be reversed.
The problem isn’t the short sellers. The problem is the gov’t that ignored the short sellers who have been screaming from the rooftops for the last two years that the house is on fire. Short sellers shouldn’t be hunted down for being right, should they? After all, if the SEC had simply enforced the law (i.e., done their job), we wouldn’t be in this mess.
Short sellers provide liquidity at the offer and a floor on prices at the bottom. They have to buy back to complete their trade. Take away the short sellers, and the result is the violent swing upward on Friday, which will be followed by a violent swing downward this week. The only difference, people panic OUT of a market in greater droves than they panic in. So once the shorts are done covering and the longs continue their selling in earnest, it will be a race for the exits without any help of the short sellers on the way down, and without their compulsion to buy back in as stocks are falling.
Naked short sellers should be jailed. The SEC (i.e, the cops) have been nowhere to be found. Be outraged at them, not legitimate short sellers. Legitimate short sellers are critical to market stability. I hope and pray things cool down and the market can take stock of what’s happened. I suspect the volatility, however, will be outrageous .
Full disclosure, I am not in any way invested in this market outside of my 401k which contains no short-focused funds. I’m in the same boat with everyone else. Just trying to call it like I see it.