Short sellers - scapegoats?

[PPPPPP]

It's all the short sellers fault that the world's biggest & greatest Banking organisations got themselves into a economic mess bigger than Mugabe.

The socialist US government will bail out Wall Street, does China do that?

Discuss

Edited by PPPPPP on Friday 19th September 09:15

[off_again]

In the media obsessed world we live in today, the media like to keep things nice and simple for everyone. Why explain the situation with HBOS with 120bn worth of cyclic debt when you can blame it on the big-bad-evil short selling hedge funds?

Scapegoat? Yep. Are they helping the situation? Nope. But if it weren't them then it would be someone else.

I remember when a pension fund decided to go after Sainsburys. Caused massive problems as they wanted to crash the company, or at least oust the board. Failed of course, but ultimately a dangerous move to make since someone had to pay and the sensible minds stopped things before they got out of hand.

[Fittster]

What I don't understand about short selling is why people lend the shares in the first place when there is a high risk that when you get them back they won't be worth what they were originally

[PPPPPP]

Morgan Stanley, Goldman Sachs, Merrill, Lehman etc all complained about short selling.

Did they ever get involved with short selling, from a normal trading perspective or to force a deal through?

Did Hank Paulsen, in his previous role as Chairman & CEO of Goldman Sacks, encourage short seling. Did it help him amass his $700 million+ fortune?

Edited by PPPPPP on Friday 19th September 09:52

[Mr E]

Fittster said:

What I don't understand about short selling is why people lend the shares in the first place when there is a high risk that when you get them back they won't be worth what they were originally

They don't really borrow the shares they short sell either...

[PPPPPP]

anonymous said:

[redacted]

Precisely. And were there any complaints from "investors" when they bought shares on credit in the hey days expecting to make a quick buck in a matter of days in the irrational exuberence phase.

Did Government intervene to prevent the bubble getting ever larger? or did they pimp their way through?

[richyb]

I was reading the London Paper last night on the tube and it has a half page picture of some guy who is suspected of short selling and his name and the company he works for and I did think then this is just going to be some poor bd getting scapegoated. I though this when oil hit $100 a barrel and then some guy got blamed for just wanting to do it for fun. It just sounds daft to me. Pass it off as a stunt/individual screwing up is probably seen to give the public more confidence that to know the truth that the banks are in serious trouble. I could be wrong but I think a lot of them are balancing on a knifes edge and all they need is for that to be publicised and they are goners.