what happens when the shorts really getting going ...

For once I'm going to agree with The Cramer on this one. What exactly is going to happen when more and more of middle class America all start piling into short funds ? (oh right, by then we will have sold off enough for a good rally) Its creating a nasty environment, although the current market does need to be sold down (still). There's a lot of fictitious wealth in there. I'm just trading, making money up and down during the day, so no, "I don't care" or to be more accurate I'm disconnected from the underlying businesses that I'm several layers of abstraction away from.

I think the shorts are now heavily favored because they can instill fear and panic that the longs don't have the ability to do. They can destroy businesses -- the ultimate goal -- and the longs can't. I don't like that, I don't like it because the great history of the stock market shows that it works better if we regulate the shorts, to make it so they can't overwhelm the longs. The creation of wealth, not the destruction of wealth, is what the market is supposed to be about, it is why it is worth participating in at all, otherwise the mattress or bonds -- only good for the most solvent of operations -- make more sense.

http://www.thestreet.com/s/cramer-shorts-are-not-and-should-not-be-equal

But the Uptick rule is irrelevant in this day and age. A short ETF, in its internal implementation, can simply be programmed to sell harder on the first uptick. (I really wish I knew exactly how these things execute their buys/sells of the underlying)

And how exactly is the entire or frightened America going to sell dollars for GLD ? Many of these new fangled ETFs are constructed with derivatives and futures strategies. What happens if the derivatives market undergoes a major collapse due to parties not being able to pay ? With this many robot driven planes in the sky, eventually something is going to collide, no ?