Oct. 08, 2022
October 8, 2022
Securities lending is a core component of any kind of short selling, naked or covered.
Short selling provides opportunities for profit in bearish circumstances - whether these circumstances are local, managerial, directorial, or geopolitical.
The opportunity for profit is a core component of any market action. It provides the telos (greek: \"purpose\") for market actors to behave in rationalistic ways.
When the opportunity for profit is tied to poor performance, poor management, etc, the encouragement of such bearish circumstances are rationally justified.
A rationally justified market is not a just market. Ethical and moral imperatives are secondary in a rationally justified, profit-seeking market.
Thus, systems are created to provide transparency, checks and balances, and fairness to such markets. Such systems allow for human judgment - ethical and moral judgment - to be maintained in the realm of disembodied and securitized asset transactions.
Our financial system, which in the 20th and 21st centuries has transformed rapidly to accommodate digital abundance, speed, and computational rigor, has grown more complex. Complex systems create opportunities for exploitation. Such opportunities can be exploited for profit at the expense of others, not by the creation of value through productive labor.
A system of value that is divorced from the creative and productive labor of those who create value allows for the accumulation of capital amongst those parties least involved in productive labor. In other words, such systems empower those who are divorced from humanity.
Short sellers, who engage in destructive profiteering... who, at best their best, sell what is not theirs with the intent to speculate... and who, at their worst, do so with the intent to sabotage or manipulate, thrive in the opacity of complex systems in which their actions, motives, and methods may all be conducted away from prying eyes.
Any rule to introduce transparency into such a system should be supported.