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back to the basics. We often compare regular shorting and naked shorting. I have 2 observations about regular shorting.

1)let's take Tidd's example say you have persons A B C 3 shareholders

A has his shares in certificate, B cash account, C margin account

so C lends his shares to D, who is a short seller, selling it to E.

So now, does E have to have a margin account? if not, look at what's going on here. it seems that E, who was lucky in the first place to get his shares, has a bigger probability of ending up with a stock in his hands cause he doesn't have a margin account like C does.

2) another important question/observation, let's say we have a system with shorting but no naked shorting. Can't you have an FTD problem just the same? Isn't that what took place in 1929?

My understand is that the tolerence for naked shorting simply magnifies the dangers of shorting. I don't see naked and non-naked as opposed to each other... with that in mind I don't see why you guys respect shorting so much.

vg
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