Hedge funds pointed to the willingness of the Church commissioners to lend foreign stock from their £5.5bn ($10.2bn) of investments ”“ an essential support for short selling ”“ and derided the pair for not understanding shorting.
“They are trying to shoot the messenger and … deflecting attention away from the dramatic incompetence of bank executives,” said Hugh Hendry of Eclectica Asset Management, a London hedge fund. “Short selling is the pursuit of truth.”
Andreas Whittam-Smith, who as First Church Estates Commissioner oversees the Church’s assets, said the commisioners yesterday referred the practice of stock lending back to their ethical advisory group, which had previously approved it.
I wish the purported leaders of wimpy, white, western Anglicanism (and other denominations) would simply shut their gobs. Their ignorance of economics, environment, and whatever is even more profound that their ignorance of the plain meaning of scripture.
Traders selling short [b][i]sell at market ![/i][/b] They sell at the same price as anyone who already owns the shares would sell at that moment. This is so simple, it takes a vastly over-educated, bloviating windbag to miss it. Traders sell at the then-current market price, and cannot, consequently, influence that price. Got that?
Everyone selling a stock is betting the price will fall. The buyer on the other side of that trade is betting it will rise. Short traders do not cause weakness, they profit from it. Selling a strong company short is a recipe for loss.
While we’re at it. I find it amusing that short-traders are the [i]bete-noire[/i] of the chattering class. You can accomplish the same thing, or very nearly so, through the use of ‘Put’ options giving you the right — but not the obligation — to sell at a certain strike price at any time before a certain date. In fact, options are much more flexible than shorting as to the time within which the target company’s weakness needs to express itself.
Short sellers didn’t [i]cause[/i] anything, so to blame them for anything is either stupid, or malicious.
Bart,
But by selling they cause the price to drop. You can argue all you like, but to the proverbial man on the street it looks decidedly dodgy. You borrow something and sell it. I apparently still own the shares you have just sold because if the company pays a dividend I still get it. This is not what shares and futures are supposed to be about. The ‘traders’ have corrupted the whole financial system. Originally It was about allowing companies/producers to raise capital to produce something.
Jon R