Blame the Short-Sellers
Given today's news, expect a major round of the good old "Blame the short-sellers" game to commence. Louise Story's one-sided piece in today's NY Times is a good example of something we are likely to see more of as financial firms hunt for fall-out shelters during the current atomic blasts in equity markets.
What's my beef about Story's piece? It's that she only tells one part of the story, and when she pretends to tell the other side -- why short-sellers aren't necessarily, always, maybe so bad -- she hedges, ahems and clears her throat so much that you forget what it is she's trying to say.
Check the mischief and speciousness in the following quotes:
- "Short sellers and their free market supporters say they have done nothing wrong."
- "While Lehman’s shares have declined as investors lost confidence in its ability to repair its balance sheet, in the four months after Mr. Einhorn’s remarks, short-selling played a role in the [Lehman] erosion."
- "Short-selling against financial institutions has proved particularly lucrative for hedge funds. "
- "[Stock shorting] has become particularly controversial in the last year, when Wall Street firms started to be singled out as the credit crisis turned the financial sector upside down."
To summarize, short-selling is fine as long as you lose money doing it, never bet against sectors that are doing poorly, never bet against companies with weak balance sheets, and generally keep those damn "free market" supporters from returning press calls.
Thanks for the advice, Louise. Yeesh.
[via NYT]
