all shorts are pond scum
Why? They are a needed check on the boundless enthusiasm of the stock salespeople on Wall Street.
Now, naked short selling is not only wrong, it's a crime with multiple perpetrators. Stock shares are units of participatory ownership, unlike, say, a futures contract which is a binding commitment between two parties.
When a stock transaction occurs, there is always a buyer and always a seller, same as at the grocery store, except that the US allows 3 business days to settle the transaction, i.e. see to it that the seller gets his money and the buyer gets his shares. Naked short sales are never settled, or at least never properly. The seller may or may not receive any funds (he shouldn't, btw), but he does get what he wants, to wit, a position in the mkt. The buyer -- and naked shorts can ONLY ever occur if the buyer isn't paying attention to his account with his broker -- doesn't get squat, and may actually on occasion be paying for something he doesn't ever receive.
This is called fraud, and the perps are, in order, the naked seller, his brokerage, the clearing firm for the exchange on which the transaction was executed, and possibly sometimes also the buyer's brokerage.
Naked short selling and ''ordinary'' short selling are two entirely different animals, and you'd be well-advised to understand the difference between them.
As an aside, you **do** realise, don't you, that the NYSE couldn't even exist if all short-selling were banned?
I'm short 2000 barrels of crude oil. Am I pond scum ?
And all pump and dump longs are angels, right? Get a clue before making idiotic blanket statements like that.
Please explain to me why being short an equity is worse than being long an equity, and not part of an efficient free market? If some investor looked at Enron's sheets and sais that their practices, while not violating GAAP, were troubling, why shouldn't they have been able to short it?