They just made, or are going to make, naked shorting illegal in the stocks of 19 companies, all big-name financials like Fannie Mae, Merrill, Citi.
SEC issues emergency rule to curb short sales: Financial News - Yahoo! Finance
This makes sense for the financials, at least right now, when perception is extremely important. Just look at what that idiot Senator Shumer from NY did in the case of Indy Mac.
The article states that some blame naked shorting for the demise of Bear Stearns. Rubbish. It didn't help Bear's ability to raise capital, but over-leveraging caused the demise of Bear. Actually, it was the combination of over-leveraging AND being wrong.
I don't like the idea of naked shorting and especially failed trades, but I see little or no reason to be concerned. The shorts have been hitting the financials, but last week I doubled my position in USB, bought an entry position in WFC, and traded in and out of BAC. Declining prices in quality companies present opportunities. Avoid companies like Overstock.com and naked shorting is irrelevant.