The SEC announced on July 30 that it was extending the ban on naked shorting of the stocks of companies with high exposure to mortgage debt. This included Fannie Mae, Freddie Mac and 17 big investment banks. Shorting is the practice of selling a stock short, i.e. borrowing shares to sell now in the hope that you can buy the stock to pay back later at a lower price. For instance, if I think American Beanbag, which is selling at 10, is going to decline in value, I can borrow 100 shares for a week (for a small fee,...
