<h5><i>Nasssty Short Sellerss...We Hates Them, Preciousss...</i></h5>

Gee whiz, all this time I've been thinking the market's and dollar's troubles happened because of the Bush Republicans' sleazy fiscal buffoonery (with the Democrats promising to do even worse). Fortunately, nefarious short sellers have been unmasked as the real culprits, and all will be well after America's good and wise government gives the globalized financial markets a stern no-nonsense talking-to.

Forbes reports:

Many hedge fund managers deny naked shorting occurs, but a growing number of company executives, from bigger and bigger companies no less, have complained that short-sellers have used manipulation to drive their shares down. Clearly, the SEC was concerned enough about it (and probably got an earful about it from enough constituents) that it decided emergency action was needed.

Plenty are angry about not being included in the emergency club, however. Patrick Byrne, chief executive of Overstock.com (nasdaq: OSTK - news - people ), who has campaigned for three years for the SEC to tighten the locate requirements for short-sellers, says..."It's the theater of the absurd."

Note the non sequitur in the first paragraph. It's not hedge funds that enable naked shorting; it's the big brokerage firms which are major stock repositories (and whose gross irresponsibility was essential to the housing bubble). Perhaps they're campaigning for regulations that will provide a pretext for new fees on their short-selling clients. As for the second paragraph, some time ago I cut my losses in Byrne's stock.

Forbes continues about the SEC:

...the agency recently extended a comment period on rules that would eliminate option market makers' exemption from the locate requirement. Critics say the option market makers' exemption, together with the SEC's elimination of the uptick rule last year, has exacerbated the downward pressure on heavily shorted stocks.

In effect, apparently the SEC is dragging its feet to accommodate the creation of overpriced leverage. Derivatives are not usually created by individual investors or hedge funds, but by the fine people who brought us the housing bubble, the Internet bubble, the emerging-markets bubble,...