Spoken Mises

Short selling is a beneficial process that allows anyone to participate in the market's evaluation of share prices. So long as contracts are enforced, even naked short selling can be a beneficial process that allows the quickest possible adjustment in mispriced stocks. The government's recent efforts to "protect" favored firms from naked shorting will do nothing but raise transaction costs. It also provides a sobering hint of more significant innovations in federal government support for particular financial giants.

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Short-Sale Restrictions Are an Exercise in Naked Power (2.26 MB)