The Securities and Exchange Comission has announced a temporary rule on short selling of investment bank stocks as well as the stock of Fannie Mae and Freddie Mac.  The rule will require brokers to actually pre-borrow the shares before shorting a stock.  Currently many short sellers could short a single stock based on the same shares; the new rule will require a broker to cover shorts, share for share by removing shares from the market once a stock has been shorted.  The SEC will consider extending this rule to the broader market.  To me this is kind of a “duh,” or, self evident principle that should have led to reform years ago.