Re: [Marxism] What about "naked shorts"?

[Aaron Aarons <aaron@xxxxxxxxxxxxxxxxxxx>]

>From: Shane Mage <shmage@xxxxxxxxxxxx>
>Date: Tue, 7 Oct 2008 00:54:59 -0400
>
>On Oct 6, 2008, at 11:24 PM, Aaron Aarons wrote:
>
>> I came across this web site:
>>
>> <http://www.deepcapture.com/>
>>
>> that argues that massive fraudulent short-selling of their stocks -- 
>> "naked shorts" -- is what brought down American International Group, 
>> Goldman Sachs, Lehman Brothers, Morgan Stanley, Washington Mutual, 
>> and Merrill Lynch.
>>
>> Do any of the economists on this list have any ideas about this?
>
>Why "fraudulent?" An uncovered short-seller has to put up just as much 
>margin as a fully leveraged buyer. The only fraud would be if seller--
>or buyer--were permitted to evade margin regulations.

>From reading the description at the web site referenced, it seems like a scam, 
>which is not to say it's illegal!

Anyway, regardless of whether it's fraudulent and/or illegal, does the 
description of the manipulation and its consequences seem accurate?

 - Aaron

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