It took Fannie and Freddie for asshole Cox at the SEC to tell everybody that naked short selling is bad.  This has been a problem for many years and the naked short selling rules have crushed one company after another.  Basically, naked shorting allows for the selling of a stock without ever borrowing the underlying securities.  In practice, this allows for any buying in a stock to be offset by a literally unlimited amount of selling.  You can even short a stock to zero and never cover it.  Believe it or not, people engaged in this process do not ever cover their shorts in order to avoid taxes — if you don’t cover then you are still short and if you are still short you don’t have any gains.  Hard to believe?

Well … in fucking greedy America nothing is hard to believe when it comes to money.

But now Freddie and Fannie have to be bailed out but they have to tighten the naked short rules for these stocks or they are going to zero no matter what the government does.

There are other issues with shorting, like the up tick rule, that was eliminated about a year ago.  Now they want to revert back and require a stock to up tick before it can be shorted.   Others are now complaining about the penny ticks and want nickle instead.   Blah, Blah, Blah …

Meanwhile, there are some serious problems at Fannie and Freddie because of the greedy bastards who bought all those subprime mortgages.  People made BILLIONS on those asinine products.  You might be surprised that the CEOs of the fucked up entities made millions in salaries and bonuses and many of those companies are failing.   The last Fannie CEO left with $14m.  Countywide CEO left with $16m after running the company off a clif.  Etc. Etc.

Naked shorting has destroyed companies and I suspect the rules will never get changed for the entire market or if they do there will be some fucking loophole around them.  You always have to get way into the details to actually understand the new rules.  Usually, we don’t understand them until greedy interests collide like now with Freddie and Fannie.

Fuck American capitalism ….