May 14, 2009
Dear SEC Staff:
Some people believe that Short Selling was the primary reason for the stock markets collapse and want the SEC to implement an uptick rule or some other means to manipulate the market and prevent stock prices from falling. These people are fools who do not understand how market economies work or they are corporate insiders who stand to benefit from the propping up of stock prices.
Please consider the following facts regarding Short Sellers (SS):
SS didnt get people to buy homes with no money down, SS didnt convince people to buy homes with teaser rates, SS didnt convince people to lie about their income on their mortgage applications, SS didnt tell banks/brokers to lever up to such huge levels, SS didnt tell Greenspan to cut rates to 1% and leave it there, SS didnt invent FNM and FRE, SS didnt tell the OTS, OCC, FDIC, Fed, SEC, FFIEC, FTC, FHFA and all the state regulators to twiddle their thumbs all day, SS didnt tell the rating agencies to rate AAA on anything that moved, SS didnt tell banks to lend to commercial real estate investors on a property where the rent didnt cover the mortgage payment, SS didnt tell the average consumer to spend more money than they make and borrow difference.
Short selling is a legitimate form of speculation that fully enhances market liquidity and price discovery.
Lastly, if the SEC gives into the demand of corporate executives and implements an uptick rule for shorting stocks then you better institute a downtick rule for buying stocks. Far more money is lost by small investors buying stocks in fraudulent pump and dump schemes than is lost from short selling.