Quote Originally Posted by bourbon View Post
But yet you offer no valid arguments against the points the author of the Irregular Warfare Support Group report has made. Rather, you have chosen to selectively engage singular points while at the expense of others.

Surely, if it is so unconvincing as you say, you then could easily refute the arguments the author puts forward.
The obstacle is not the difficulty of refutation - it is very easy - but the volume of refutable material. It would just take too much time, and since nobody's takimng it seriously anyway, why bother? If someone would pay me as much to refute it as the poor oblivious American taxpayer paid to have it written, I'll gladly take the job.

Quote Originally Posted by motorfirebox View Post
I've been thinking about the "it's just stock price" argument, and I'm not sure it holds water for several reasons. The simplest consideration is that falling stock prices make it harder to raise capital by selling stock. More broadly, a drop in stock prices can mean a drop in debt to equity ratio for companies--like investment banks--whose debts are publicly traded. This can, again, make it more difficult to raise capital, since the debt/equity ratio is often used to assess investment risk. A specific issue with the debt/equity ratio is that a high ratio can violate one or more debt covenants, forcing a company into unprofitable actions in order to get out of default.

Another facet is the effect falling share price can have on the board of directors. The directors' positions rely on shareholder confidence, which drops when share prices fall. So for that and other reasons, a company might very well choose to reduce their profit margin in order to maintain a higher share price (for instance, buying back shares if the price drops too low).
That would be a valid point if stock manipulation had the ability to significantly depress the stock price of an otherwise healthy company for an extended period of time. I see no reason to believe that they can, or that it's been tried. A brief dip in the stock price will not significantly impair fundraising or disrupt management.

Short selling doesn't drive healthy companies out of business... the art of short selling is to identify and target the walking dead. Of course if there's a lot of walking dead out there that can cause problems, but the source of the problems isn't the short selling, it's the prevalence of walking deadness. If short selling seems to be causing major disruption the chances are the short selling itself is just a symptom of a much deeper systemic problem. The answer isn't t try and ban short selling, it's to try and prevent companies from getting into the kind of condition that will allow them to be damaged by short selling.