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Bad News for Housing Stocks, Good News for Homeowners?

It seems logical that the covered bonds concept would not work especially when executed by banks which have no or little experience in this area ; ending up in a legal mess seems eminent .

Fannie / Freddie ( GSEs ) have been successful in carrying out their business for many years ; they should be fine in doing what they have been doing .

The US financings are structured using the two GSEs as the nucleus , for many years .

Any change to the established structure when the economy is fragile , would only intensify confusion , loss of public confidence and faltering of the economy .

Changes should be executed when economy is stabilized .

The Facts Behind the Coming Congressional Mortgage Bailout Bill

Foreclosures have been rising at great speed since October , 2007 .

The timing is matching exactly the slumps at financial stock market .

These home owners who lost their homes might be the same victims who have suffered grave loss , over the slumps .

Those who stored their savings in bank stocks which had been stable for about 5 years , would lost most severely .

They are simple , hard working people but victimized by the naked shorters .

The immense power of naked short selling drove the bank stock pricings lower than lowest .

SEC allowed such unlawful manipulation , one article indicated that some published records have shown that some short sold shares were not delivered for over 200 days .

SEC announced emergency measures to police naked shorting on last Wednesday and somehow two days later , nullify the effect of their own measures by exempting the market makers .

The requirement of delivering the shares short sold by the next day seems reasonable under the computerized system .

Naked shortings in the now distressed economy intensify the vicious cycle that spirals towards economic destruction .

The government has a duty to serve the general public .

The bailout or whatever one names it , is a measure to reverse the cycle towards a better economy .

Why not ? I know , you short sellers , don't agree .

Mother of All Short Squeezes?

Yes , why does the unlawful naked short selling being allowed openly by SEC ?

Even at emergency , SEC offers policing to only 19 investment banks for 30 days .

How about the regional banks where they have already been hurt by naked short sellings .

The naked short sellers can short sell unlimited quantity of shares of any bank by not having to borrow the same .

Such short sellers then have the " privilege " to command an unlimited supply of shares .

Such short sellers are naturally invincible since they have been well fed financially in expense of the economy of USA .

Yet , SEC would only police for 19 investment banks .

Why does the lawmakers tolerate such notorious violation of the law ?

Further , banks are often required to shore up their balance sheet forcing them to sell newly issued stocks at depleted pricing .

An article indicated that the same short sellers who depleted the banks' pricing would buy the newly issued stocks for covering their position .

Magic ! short selling " nothing " at a high price and buying back the tremendous quantity of new issues at a dirt cheap price .

A small group of short sellers make huge profit on the misery of a very large number of innocent people .

Is this vicious cycle of selling phantom stocks at high prices while covering the position with cheap new issues , really happening under the eyes of lawmakers ?

Just in case , Banks should have a grace time to shore up their balance sheet until the naked short selling is limited .