Subject: File No. S7-08-09
From: Jim Miller
Affiliation: Series 24

May 15, 2009

I am totally confused as to the need for additional short-selling rules without corresponding changes to buying rules. The proponents for additional rules claim that such would prevent unfair manipulation on the down side. But currently, there are several "short squeezes" going on that are manipulating stock prices to the upside. See NILE, for example, and all the talking heads that are calling on buyers to "squeeze the snot out of the shorts." Say that these short-squeezers are successful in driving the stock price of NILE upwards, with no fundamental rationale for such. Now that have created "air capital" or another bubble that will have to burst. When it bursts, given the low volume on that stock, the retail investor will be the last to know and is the least nimble to move. Aren't these artificial bubbles what got us into this this trouble in the first place? Were the shorts "wrong" in shorting the bubble-inflated stocks?
I'm not smart enough to know the answers, I don't envy your job, and NILE is but one of dozens of examples where this type of manipulation is currently happening, but I at least wanted to go on record in asking the questions. Good luck