There are lots of people who will argue that regulators made short sellers a convenient scapegoat in the recent financial gyrations. They are not without evidence. As Business Week notes, the Standard & Poor's 500-stock index fell 22 percent from Sept. 19, before the temporary short selling ban took effect, through its last day, Oct. 8. The KBW Bank Index fell 33 percent. You could point to individual issues to argue the other way. As soon as the ban was lifted, the likes of Morgan Stanley took a big tumble. But given the rumors, that wasn't necessarily the result of extreme shorting. All in all, it remains unclear exactly how responsible short selling was. This will not be the last word on this.

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