Getting naked in short selling

How can Bear Stearns and Lehman Bros. be collapsed by "naked short selling" when 90% of the naked short sales took place after the stock already was collapsed and trading at 3 ?

Sorry but the speaker has a lot to learn as to how short selling and naked short selling works.

Cheers:

I'm new to this, but been studying this about Naked sharing, trying to understand this.

The Seller doesn't borrow but is betting that the price will go down so sells a stock to someone for cash, but isn't able to buy a stock from others because the stock price is higher. The seller bet failed giving back cash to original lender, which creates in they system an imbalance of not enough demand because of the seller taking a risk, which lowers the stock?

I understand short selling. I don't understand naked short selling. What allows people to be able to sell non existing shares of stock. Don't see how that could be allowed, and I know the SEC banned it, but it still happens. Is the girl who never recieved the 100 shares from the guy still able to trade those 100 shares in the market?

At least as far as the video describes it, they're not selling shares directly, they're selling promises to acquire and deliver those shares within a specified amount of time. Caitlin wouldn't be able to sell those 100 shares before she had them, but she could possibly sell the contract with Sam to someone else.

it is quite simple. A legal short sale involves the legal locate, borrow and deliver of an authorized, registered share. The market price of a stock is determined by the supply and demand. As long as supply is legally "created", proper price discovery can be attained.

When shares are illegally sold, supply can overwhelm demand and create artificially low prices. Furthermore, these illegally created shares will trade in the system, diluting the authorized float. Like adding water to wine.

Overdone example: If 100 shares in the market could be traded but 150 shares currently shorted because 50 naked, price is likely to drop much more quickly.

this does not make sence to me at all. if the stock market price is $5. the short seller can simply make a higher bid.how can the price go down ?? if the price goes down doesn't that mean someone is selling? someone must have sold for $5 why you can't buy them at $6.
this short selling excuse of the market collapse is BS. prices are falling because if deleveraging on all the margin leading.
ie just like the 1929 crash.

In fifteenth century england. You could be beheaded in the public square for trying to transmute metal into gold. Why don't they punish those who counterfit shares of stock?

Good explanation

However, it seems like it would behoove Catlin to renegotiate the deal, leaving Sam off the hook and her off the hook in getting stuck with a loss. Do the mechanics of the system not allow the renegotiation?