John Bogle: Bringing back the uptick rule won't solve anything

I agree. Short selling is actually a healthy part of the market.

www.eeinvesting.com

"Is the glass half full or half empty?" It really depends on one's perspective, doesn't it?

Personally, as a somewhat novice "retail investor", I do not see where "short selling" has any advantages or benefits to it except as a tool and incentive for the insiders to "work the market" to strip investment monies from the "average investors".

The markets have been EXORBITANTLY OVERPRICED for many years prior to now . . . what good did any short selling have on the helping to regulate the market back then? NONE!

The damage that is being done on the bottom end of the market is that unprincipled parties are using the fact that the Funds have a fiduciary responsiblity to sell stocks when they reach a "certain level". The short sellers are "working this fact" to artificially (and criminally) drive the prices down to a point where they can almost be guaranteed to reap profits . . . At this point these insiders are desperate for ANY profits that they can make.

Short selliing is mostly a gimmick tool for the insider "sharpies"; it definitely is NOT in the best interest of the American people, the average investors.

Anothe problem with short selling is their BLATANTLY DIRE IMPACT on the Funds at this low point in the market.

This impact of short selling on Funds becomes a negative factor in investing in Funds where the average investor (retirees, etc.) have no way of knowing or controlling what is going on with the Funds that they have invested in . . . . and especially not in a timely manner to do anything to protect their investments.

The short sellers taking advantage of the "fiduciary responsiblilty" of the FUNDS having to sell at certain predetermined stock prices, BECOMES A MOTIVATING FACTOR THAT PRESSURES AN INVESTOR LIKE MYSELF TO "CASH OUT" BEFORE THOSE LEVELS ARE REACHED. The situation runs counter to inducing people to invest in any type of Funds that may be impacted negatively by these factors . . . and it is an inducement to "cash out" of these Funds. How can that possibly help the recovery of the market . . . it doesn't; it is a negative factor to recovery.

Like "life", the "markets" are somewhat of a "game" . . . the "sharpies" taking advantages of the systems and the more naive players.

One reason that it is going to take so long for economic recovery is that the naive people are not going to be quite so naive or trusting for a long time . . . they've been burned sufficiently to have learned to be exceeedingly cautious for quite some time.

Another factor for the prolonged economic recovery is that these rather naive investors have been stripped of their investment assets . . . they don't have money to invest in the market. And those who do have money are extremely wary of any invetments in such volitile markets. These are unprecedented times . . . and we still have a couple of million people who will wind up unemployed this next year, and a lot more businesses that will go bankrupt . . . . and a lot more "dominoes that will fall BEFORE this situation bottoms out.

The short sellers are currently the "bottom feeders" in the market, sucking up the "nickels and dimes" that they can find or generate . . . and they are dealing the final economic death blows to some of the corporations hat might have survived otherwise . . . and this generates more unemployed people.

Their "defense / justifications" will surely be that if they don't do it, someone else will . . . isn't that always what the con artists say?

Zac, you and I have communicated off line about this already and within your responses you admit that you have done very little independent research into this issue. Because you have done little independent research I must ask you why you only post blogs about short selling when the opinions you present are against any improvements and restriction in the short sale process.

Clearly there have been opinions cited from reputable people on both sides of this argument and yet you, with little independent work to your name, only present one side. Why is that? How do you come across only the singular arguments? Do you understand that while some within the industry defend the actions of ABUSIVE short sellers there is a global regulatory consensus that the abusers are damaging global capital markets? I highlight abusive in this text because like many of the others who defend short selling activities they do so by confusing the reader into thinking there is only one type of short sale activity.

In a previous article by the WSJ a very detailed analysis of the attack on Morgan Stanley was presented. Where was your blog on that?

You want to be respected for your work and yet I find your reports irresponsible and your coverage lazy. I fail to understand how somebody can formulate such an opinion and print that same opinion o frequently without ever doing any independent analysis.

john bogle is a cynical old man and has no credibility regarding the short selling issues.
Those of you that drink the kool-aid of the hedge funds and professional short sellers simple have not looked at the facts. Manipulative short selling IS the reason the market is down 40% this year and the only reason Bear, Lehman, Wamu, FNM, FRE, WB, MER and nearly C were destroyed. Carefully orchestrated Bear Raids. The uptick rule is a must. Chris Cox and the SEC board should be held accountable for their blatent negligence.

Short sellers do not hurt the market. In a matter of fact they help the market to control the manipulation of bringing up a stock.

And is not short sellers who start a bear market, is insiders! get it, is insiders! And do you know what an insider is?
People who know information about a corporation.
These insiders might have so much money, but they can't fight conditions! When they see that the economy is shrinking, they start selling.

And those so called bear rally's is the public who had stock and sold. They realize that they should have gotten out 10 points higher ago, so when the rally comes, they sell fast so they can cut their loses fast!

I suggest you read Reminiscences Of A Stock Operator. You will read how one of the best trader ever lived recount how people blamed him for shorting so much the market, when it fact it was insiders that where selling their own shares! He just read conditions and follow the trend! It happened back then and its the same dilemma that is happening right now. Like Jesse Livermore said, there is nothing new in the market!