April 29, 2009
Dear Sir/Madam,
I'll start by freely confessing that I have no expertise in economic theory.
If I understand short selling correctly, it involves selling shares I don't own, betting that I'll be able to 'cover' that sale by buying the shares more cheaply at a later date.
If this is correct then I struggle to understand why the practice is allowed at all. In every other instance that I can think of, if I enter into a contract to sell something I don't own it's called fraud.
If you think a company is going to tank, don't buy the stock, or sell what you have. Simple as that.
I think it would be useful to recall that this is no longer a gentlemen's club with one market shark fleecing another. In an era where investment by Joe Citizen(ie me) is almost mandatory (via 401k's etc) for retirement, then I expect that the SEC would, on my behalf, take steps to ensure that the market regulations are heavily weighted towards promoting longer term investment decisions and market stability.
In short(pun intended) 'Don't sell what you don't own'.
Sincerely,
Gregory Nicholls