May 5, 2009
Short selling, naked short selling, and the super-short ETFs are a threat to any ordinary investor who wants to buy and hold stock as part of a retirement portfolio. Recent history has shown the profound economic damage that unrestrained short selling can cause. Continuing with the present rules risks an abandonment of the stock market by long-time investors like me, would allow short sellers to continue to devastate our economy by destroying the stocks of banks and other fiancial institutions, and most likely will curtail the capital-raising ability of our financial system. The current short selling rules have rendered the market unfair to the ordinary investor, unsafe for retirement funds, pensions and 401ks, and far too unstable and unreliable to engender confidence in its viability as a way to invest.
I would like the SEC to ban all short selling. Failing that, I would favor a return to the previous rule, which worked well until the SEC changed it in 2005. I also believe the short selling ETFs should be abolished.