September 19, 2008
Dear SEC Commissioners:
I write to you in urgence for you not to approve the proposal to ban short selling. I am a law-abiding, tax-paying and voting citizen, and I use short positions through my brokerage to hedge my longs.
Normal short-selling is a natural part of the free market system. It creates the mechanism for which a normal price discovery process can be obtained. Short sellers are the counterweight to the normal bullish sentiment of Wall Street and the 'stock pumpers' . Banning short selling only punishes those that seek the truth in the true value of the stock market.
Short-sellers have been blamed for other economic disasters throughout history. Whenever a crisis developed within the economy, and subsequently the markets, it was short-sellers who caught attention, because they made money when others lost theirs. They were blamed for the crash of 1929.
Short-sellers do NOT create the economic conditions, they profit from them. Short-selling does not wipe out companies, the mismanagement of companies and their economic problems wipe them out. I sit here tonight writing about this possible action by the Government in almost disbelief that it could happen. This is supposed to be a free market system in the United States.
While an RTC II is a welcome and obvious solution to many of the current problems, blaming short sellers and engaging in witch hunts are not. That policymakers seem to be opting for both reduces the integrity of the market.
I plead to you to make to right decision for the long-term welfare of this country. Object to this proposal to ban short selling.