I've said it before, I do think that "selling short is healthy".
In the 1930's the uptick rule was put in place because the banks during the crash, couldn't recapitalized. The point of the stock market is to allow companies to get money from the capital markets when in need.
But if the short sellers cut off access to those markets, based on the fact that they are highly leveraged institutions. Yes, some are very bad institutions. But it can't be allowed to crush them all.
But... I can't buy more shares of a stock than exist, But with a 3 day delivery date, in a 3 day period more shares can be sold short than exist in the float.... Maybe at one point they have to be purchased. But When the supply demand equation is skewed, since you can sell more stock than exists, but you can't buy more stock than exists.
It's actually a break down in the market forces.
Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.
J. P. Morgan
Thursday, September 18, 2008
I'm a Classic Supply demmand guy
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