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Another Way To Axe Short Sellers

Instead of banning short-selling outright, why not squeeze settlement times so tightly as to make it de facto impossible? Eddy Wymeersch, chairman of the Committee of European Securities Regulators pointed out that moving settlement from the rough European (and just about everywhere else) standard of T+3 to T+0 "would largely enable us to eliminate short selling."
Of course, Wymeersch probably meant naked short selling, which delivery gaps tend to facilitate (stricter delivery requirements were among the recent efforts to curb the practice, in fact). But we think this a fantastic idea beyond just short selling restrictions. In fact, this approach could be the cure for financial crisis at large. It is true that the technology exists today to move to T+0 settlement. But why stop there? Why not move to T-1 settlement? Or, now that we think of it, T-3 settlement? The system we envision would work like this:
Trade Day Minus 5 (T-5):
After conversion of the Treasury's NYSE Euronext, FINRA and owner/member preferred shares to common, the Treasury has become the DTCC's majority shareholder and simply provides the bid and ask data for the day based on guidance from the Economic Recovery Advisory Board and recordings made during Paul Volcker's late afternoon nap time. Prices are subject to the "uptick only" rule, meaning that no bid made at the same price as the last bid made may be made until there is first a bid uptick. This prevents stagnated pricing and undue "sideways" volatility.
Allotments and purchase assignments for the upcoming trading day are generated by rotation/capital balancing algorithm at DTCC's headquarters. The resulting trade matches are netted and crosses harmonized to reduce the number of environmentally wasteful sheets of paper used in the printout.
The final trade matches and prices are vetted by the Economic Recovery and Political Retribution Advisory Board. This body is currently run by Andrew Mark Cuomo, but he reportedly failed to press the "Door Open" button quickly enough when Rahm Emanuel was running for the elevator last week and Larry Summers apparently overheard Cuomo mutter "run you fucker, run" under his breath so the big AMC might be OUT.
Funds are automatically deducted from checking and savings accounts (or added to the purchaser's debt account at LIBOR + 11 plus "no cash" penalty. Overdrafts and related fees are a prime source of new "DTCC revenue" for those banking institutions currently favored by Tim Geithner). Trade confirmations are sent via USPS and should arrive by T+19.
Shares are delivered to the lucky buyer. (Optional).
It will be seen that this system will pretty much assure the realization of the American Dream of Equity Ownership and prevent any of the pesky crashes or "corrections" we've been forced to live with until now.
Watchdog mulls new curb on short selling [Reuters]