If you have some time, watch this presentation on naked shorting, "Dark Side of the Looking Glass".
"This presentation, created in 2006, launched the popular market reform movement. Overstock.com CEO Dr. Patrick Byrne explains illegal naked short selling, its roots and risks, in terms anybody can understand."
I believe most of this is not legitimate shorting. These crooks are shorting the same shares over and over again. SEC is refusing to regulate the hedge funds. This is a fraudulent scheme Wall Street designed to short all stocks and skim off the market caps. This way all 401K investments are directly transfered to hedge funds. I don't understand why Chinese investors can not buy the beaten down chinese stocks when they reach ridiciolus levels and sell at higher prices.