Pump and dump, distort and short

I like Chris Cox (try saying it like Sir Mix-A-lot). I liked him as a congressman, and I like him (mostly) as SEC chairman. Even so, I came down pretty hard on his naked short selling announcement last week (let me re-phrase: his announcement on naked short selling). I'm certainly not for naked short selling (it's illegal anyway), but I envisioned a repeat of the commodities "speculators" scapegoating we witnessed recently being applied to all short sellers. Apparently I wasn't the only one, and Cox set to reassure skeptics in an op-ed piece in Thursday's Wall Street Journal. A sample:

"Abusive naked short selling is far different from ordinary short selling, which is a healthy and necessary part of a free market. Manipulative naked short selling is one worry investors shouldn't have."

I don't think any of us can necessarily be blamed for our response to Cox's grand pronouncement last week on short selling. It's an election year, and easy answers to complex problems are the norm. I absolutely should have specified that Cox was referring to naked short selling, and he hit the right notes in the Wall Street Journal piece. Read the whole thing at www.wsj.com.