Just to clarify, i am talking about naked shorting (common in the US), below from The Big Picture (Barry Ritholtz). You can still take a negative position in most papers using derivatives.The temporary ban
is on short selling to help the markets heal somewhat (damage from aggressive short selling esp. naked short selling financials). Source: http://feedproxy.google.com/~r/TheBigPicture/~3/PS4hr_YMAeA/short-selling-b.html
"Earlier today, we looked at an October 18, 1930, NYT editorial on on Short Selling. As we now see via Google News, bad ideas are con... (read more)
V, good point, of course not but its not the same, you can use leverage to buy stocks and then also sell the same stocks, when you unload your position you create a down pressure on the price.
The problem with short selling is that it adds another dimension to buy and sell, the buy side does not have the same instrument. Not to mention naked shorting which is even worse, that way you don't even have to borrow the shares before you short them. Short selling is a kind of self-fulfilling prophecy.