why companies don't buy back?

The problem is whatever pushed your shares to $1 in the first place. Which probably won't leave you with a few billion dollars lying around to make a going-private bid on your own company.

Even if it did, basically giving that money away to take your company private would exacerbate whatever actual problem you already had.

 

In fact that does sometimes happen. For example when UCBH was under attack by short sellers this past summer the CEO and other company officers started buying like mad, as did their Chinese partner bank. The stock is now up 190% from its late June low. (Was up 230% prior to this months "little" crash).

 

Why? Because theyre worthless. Thats why. Going after the shortsellers is just a witch hunt.

 

So explain why FRE and FNM went from 20 dollars to 20 cents when there was a ban in effect for naked shortselling that covered them?

 

Mcain is clueless as Obama. He was telling everyone how good it was right before the BSC scenario.

This is the future? Obama? Mcain?

We are FUUUCKD!!!

 

Finally, a very good question. A ban on naked short selling is NOT designed to protect BAD companies from going out of business. It is to protect good companies with real assets from going out of business.

Why did FRE and FNM go to 20 cents from $ 20?

It is because as Buffet noted they were making risky loans and being reckless, which is why he said he did not invest in them.

Buffet also stated that the companies had a negative balance sheet in that they had more debt than assets, which means the companies were basically worthless.

Finally, the government took them over and as part of the agreement, they basically caused the companies to go chapter 11 in that the government took all assets and left nothing for the shareholders by force which also caused the preferred shares to be worthless but the bonds look like they are going to be ok.

Let's look instead at OSTK which is naked shorted vs EBAY which is not. OSTK is up over 16% today while Ebay is only up 4%. With the new rules, shorts are starting to cover.

OSTK is owned 31% by insiders and 71% by tutes, so how can there be such a high short % and how come it always stays on the naked short list?