July 16, 2008
It is becoming intuitively obvious, despite media and Cramer obfuscation to the contrary, that the SEC position is intended to change the process of handling naked short transactions by forcing traders and brokerages who want to short a stock (i.e. naked short) to borrow the stock first at the time of the short transaction and not delay this borrowing until after the transaction has occurred and at worst case until transaction reconciliation (i.e. up to 72 hours later).
This keeps traders honest and eliminates "failure to deliver"! I do not understand what the fuss is all about. Being lenient on this process has obviously led to abuses by greedy traders and brokers.
Hopefully this process change will be enacted across the board.
Steve from Atlanta