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Could someone plz explain Bill's comments on "price discovery"? Why are shorts important?

Because a healthy system involves allowing investors to profit from their evaluatory edges. You want a situation where people have an incentive to look for problems. It does not solve bubbles, but having short selling be banned eliminates an extremely healthy component of a free and fair market.

"Banning shorting" makes no sense in a healthy market. You're essentially forcing investors and speculators not to be able to hedge. This makes no sense with commodities (farmers use forwards all the time to essentially "short" the stuff they're currently growing, as do drillers). It allows the people who are risk averse to participate in a market that they otherwise might not.

Bill Mann
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