Monday 29 September 2008

Those pesky short sellers...

UK bank share prices today, post the short selling ban:

Barclays off 9%
Lloyds off 13%
RBS off 17%
HBOS off 12%

Must all have been their fault, closing out those short positions....

9 comments:

  1. I don't see why you are defending the practice . Just because people do something in a market does not make it helpful or right.
    I work in a market as do we all in one way or another. Its full of cretins and greedy selfish bastards trying to subvert it in all sorts of ways and has to be regulated .
    This is true of insurance which has very easy entry .How much more true for the rarified atmosphere of City hocus pocus.I know enough of them to know they do not have a clue what they are doing ususally and I think you have to admit there must be changes.

    What have we learnt from this ?

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  2. I think CU's point is that the ban on short selling has made no difference because it wasn't the biggest factor in the demise of HBOS or B&B.

    The other thing of course is that you can't prevent people from making contracts, so you can't stop people from doing short selling but hiding it within a more complicated trade.

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  3. Who'd have thought that the markets would be more volatile without the buying pressure of shorts closing out positions in a falling market?

    Wow, it's lucky we have the AWESOME gordo to chair the economy to commanding heights.

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  4. you can't prevent people from making contracts

    Of course you can

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  5. I don't feel at all comfortable being long the banking sector at the moment. I'm taking a pumelling!

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  6. Banning short selling won't have made the slightest difference.

    The botched nationalisation of B&B made things worse. (All privatisation are botched).

    The House of Rep's coming to their senses will have knocked them even futher back.

    Sometimes I think it'd be better if politicians stopped spouting off about things they don't understand and interfering. Actually I think that most of the time.

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  7. N, no you can't. You will have cash under the table or brown paper bags before you will have trading stopped.

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  8. N - BE is right. There is a witch hunt on the wrong target. the Shanghai exchange, without shortsellers, is down 57% this year.

    There are real guilty people to find in all of this; it is not all the fault of short selling.

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