o Short Selling and The "Uptick" Rule

Short sellers have been blamed for accelerating the declining equity market. People that short a stock sell a security they do not own. The "uptick rule" regulates short selling of equities. Short sellers can only initiate a short position at a price higher than the price of the previous trade. The SEC abolished the "uptick" rule in July 2007.

• SEC Bans the "Uptick" Rule:
• http://www.sec.gov/rules/final/2007/34-55970.pdf

Some interesting contradictions:
1) The SEC temporarily banned short-selling on 799 financial firms on September 19, 2008. So make short selling easier, and then ban it altogether a year later? That's not a very cohesive strategy.
2) Brokerage firms allow short sellers to borrow shares from an existing client account. That person is long the shares, hoping the share price rises. The short seller then sells the shares, hoping that the price of the stock goes down. What an interesting moral predicament for the stock broker? Or not. Just charge a commission on both side of the transaction and forget about it.

Here is a hypothetical question, would any board of directors of an publicly traded company want short selling to be allowed? Would any long term investor want short selling? The answers are "no" and "no." The only companies that benefit from short selling are broker dealers such as ML, Morgan Stanley, Citi, Goldman, JPM, etc. These financial institutions are being punished by the very system they helped to create. Brilliant!