Hedge funds that bet on a decline in British mortgage lender HBOS Plc are “bank robbers” and “asset strippers,” according to the Archbishop of York John Sentamu, the Church of England’s second-ranking cleric.
“To a bystander like me, those who made 190 million pounds ($353 million) deliberately underselling the shares of HBOS, in spite of its very strong capital base, and drove it into the bosom of Lloyds TSB Bank, are clearly bank robbers and asset strippers,” Sentamu told an audience of bankers at Drapers’ Hall in the City of London last night, according to his Web site.
Sentamu’s speech came as the Archbishop of Canterbury Rowan Williams, the Anglican church’s highest-ranking cleric, urged the British government to adopt more radical regulations, in addition to the temporary ban on short-sales of financial stocks in an article published yesterday on the Spectator magazine’s Web site.
“The question is not how to choose between total control and total deregulation, but how to identify the points and practices where social risk becomes unacceptably high,” Williams wrote. “The banning of short-selling is an example of just such a judgment. Governments should not lose their nerve as they look to identify a few more targets.”
So now the ABC has time to opine on the legality and effect of something as obscure as short-selling in the securities markets, but he still doesn’t have time to comment on a far more salient matter for him like the “deposition” of +Duncan? This guy is a complete joke.
Short-selling in the securities markets is something that quite possibly has contributed to the largest financial downturn in more than a generation. This affects the ABC’s own flock in England MUCH MORE than anything the American HOB does or does not do.
Short-selling puts honesty in the market…without it, stocks are encouraged to be inflated beyond worth. Maybe the British regs on the matter are poorly written or executed, but prohibitions on short-selling will just inflate the market further.
How refreshing that the ABC can speak so clearly and forthrightly and strongly — even to the point of name calling — about the things which he himself cares about.
I would love to see one of our Anglican leaders from the West, just once…even only once! use their platform to proclaim the excellencies of Jesus Christ rather than inserting themselves as experts over and over again into areas which they have little competency. Or perhaps they have more competency in these matters than they do in the Gospel. In either case it is disheartening, but that’s just me.
If these guys are talking about naked short-selling, they have a point. If they’re talking about a traditional short sell, they’re full of it. Propping up the market by banning traditional short sales is, as one commenter put it, trying to cure your fever by smashing the thermometer against the wall.
Crisis does not create character; it [i]reveals[/i] it — cf ABC [i]et al.[/i]
Short selling does not weaken a company; it reveals pre-existing weakness. Traders learn quickly that shorting sound companies is almost always rather painful.
RobSturdy
AMEN! It seems like the postmodern Anglican leaders can work up passion about anything, except Christ.
“Short selling” in and of itself is no problem. It only becomes problematic when actions are deliberately taken to negatively influence a stock price in order to enhance a “short” position.
the snarksterâ„¢
I am always amazed by the flow of money where profit is made but nothing is produced.
One could easily argue that scripture is far more concerned with property than other objects of attention. They just hadn’t invented derivatives.
Short sellers should pay the consequences when they lose and not expect other people to back them up. In the end, it creates little value.
Good for the Archbishop.
I could agree with Rowan Williams here, John, if he had stopped at insisting that short sellers who predict incorrectly lose their money. Unfortunately, he’s essentially said the aggressive use of force should be used to prevent people from predicting a particular asset is going to lose value. There’s a technical term for that: Stupid.
[blockquote]I am always amazed by the flow of money where profit is made but nothing is produced. [/blockquote]
Are you baffled by your local grocery store? Your bank? Your favorite baseball team?
If there was no value to what these firms do, no one would pay them for it.
Yes, Jeffersonian, the value is the profit made in a legal scheme in which nothing is produced. Kinda like Las Vegas.
[i] Edited by elf. Ad Hominem [/i]
[blockquote]Yes, Jeffersonian, the value is the profit made in a legal scheme in which nothing is produced. Kinda like Las Vegas. [/blockquote]
Or, as I pointed out, your grocery store. Will you now shun this den of iniquity as if it were a casino?
Jeffersonian,
Do you recall the great corporate tax dodge called “lease backs”? It’s much more like that – money is made, nothing new is produced. This is increasingly the world made by those who make the problems.
RE: “Will you now shun this den of iniquity as if it were a casino?”
Apparently not, Jeffersonian — he’d rather just ignore your pointing out how inconsistent his principle is. ; > )
No, Sarah, it is rather you and Jeffersoian who are dodging dealing with this brave new world where money is made and nothing new is produced. The supermarket provides a needed service. Why don’t you two fananical experts explain “lease backs” to the T19 crowd? Then justify them. Explain this sham world to us all and why it is good for us.
RE: “The supermarket provides a needed service.”
And what would that be, Albany? What service does the supermarket provide, that the hapless farmer — who actually produces something, which if you will recall was [i]your[/i] criteria for “value” — does not produce?
RE: “Why don’t you two fananical [sic, I hope] experts . . . ”
This from the man who pronounced that Fannie and Fredddie were “the free market” . . .
The free market will take care of and eliminate any scheme where money is made and nothing new is produced. Unless the government gets involved. Then we will pay farmers not to raise grain, force banks to make insanely risky loans, and pay the executives of quasi governmental entities like Fannie-Mae $50,000,000 (and that is just one executive of many) over a few years time, even when it is known to the government that they are cooking the books. The problem is big government which inevitably leads to big corruption.
20# Nonresponsive, again.
PS I do think you both have financial expertise. How one makes sense of the facts is the issue.