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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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vg -

I doubt you'll get much response / discussion to your points, because, in the end, I don't really think this is about the mechanics of naked shorting. It is about blaming someone or something for perceived damages.

Someone bought OSTK at $70 and the stock is now at $35 and they just can't face the fact that either they made a bad purchase or that they are being too impatient in expecting their results. Instead, it is far more convenient and "psychologically comfortable" to blame someone else. Even if you can't identify the person or describe exactly how they are to blame, it is far better to blame them than blame yourself.

Ancient cultures would burden a goat with symbols of their travailas and troubles and chase it out of town, as a way of cleansing themselves. The goat 'scaped, but the source of the problems remained in town...

T
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oh... so i have to take this back to the brk board or something, hein?

But while we're at it, maybe you can offer your opinion at least, since your post originally led me to this issue.

What I'm saying is that shorting IS a "bad thing" in the exact same way that naked shorting is, just of a lesser magnitude. I mean, when you buy a share from a short seller, you're not the economic owner. But you still get proxies by mail and all, don't you?

I don't know... I think every investor (and his loved ones) who has a margin account ought to know the exact mechanism and legal framework of shorting and margin. I still can't get my arms around the issues. Can you? Maybe Patrick can tell us how the shares are counted when it's time to send the DEF14a's and annuals ...

P.S. agree with you totally on the whole "embittered people blaming whatever"
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Ancient cultures would burden a goat with symbols of their travailas and troubles and chase it out of town, as a way of cleansing themselves. The goat 'scaped, but the source of the problems remained in town...

The ancient culture you are referring to is the Hebrew culture (Lev. 16). God instructed Moses' brother Aaron to bring two goats to the altar. One goat would be God's and the other the scapegoat. The Lord's goat would bear all the burdens of sin and be sacrificed. This was symbolic of all the peoples' sins being burdened on one who was to be slaughtered in their place while they themselves were set free (escaped).

Of course now we're getting into theology, and a complete discussion of this would be inappropriate for this board.

yc

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