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Short Selling: Myths and Facts

Mark

A decent article for starters but you completely left out the other side - what makes a long want to lend their shares? And what does it take a long to keep lending their shares. The perspective from the longs is more fundamentally important as short selling is a derivative - shorts have no rights, their 'rights' are derived and premised on longs' willingness to lend the shares.

It'll be good to understand the dynamics involved in getting scrips to short.

Wall Street, R.I.P. Now What?

Boomerang theory - what goes around, comes around. So much for the smarties on Wall Street. You can never beat Mr Market! Nothing beats honest hard work.

Making Sense of the Brokerage Bust

You forgot something - all this busting will mean that 'trust' is going to be scarce commodity. Technology will taken over what used to be 'trusted' but now cannot be trusted. But there will always be one part of the business that needs the human touch.

Moral Hazard: A Danger to Our Financial System

Tom, this is a very good article. But I'm afraid not many of the generation that has not retired (i.e. those 55 years and younger) actual understand the meaning of 'moral'. Sadly, I think its a lost principal in many business dealings these days. Hence, a blow up almost every few years....

For many, the law of the jungle rules, so caveat emptor....

Buffett Warned Us in 2003

Wall Street is ruled by a group of financial gangsters allowed to run wild in the name of free enterprise.

What do you get?

A big mess!

Debating the Lehman Collapse

The best way to resolve the current 'confidence' crisis and to prevent people from unethical profiting from it is to revert to the old paper scrip system. This will make sure that any short selling is genuine - not sold from 'made up' scrips. As long as we have threshold securities still in existence, its very easy to make a case that a company is going under....that is the power of words in a proclaimation.

Mother of All Short Squeezes?

you know why there is such a big resistance to short selling especially on sites like SA and coming from many fund managers, esp hedge fund managers.... Because if rationality and logic has its way, running a hedge fund is going to less profitable, market makers will no longer be able to make as much markets and brokers cannot earn twice on their margin business (first from lending you money and then lending your shares).

How High Leverage Has Brought Down the Whole Banking Industry

The whole financial sector is going to get another huge leverage boost again if nothing is done to regulate short selling (or ban it). Short selling is another form of leverage - instead of borrowing money, you borrow shares. The difference is that you can probably multiply money easily but you certainly cannot multiply shares.