Category: Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Are Short Sellers Positive Feedback Traders? Evidence From the Global Financial Crisis”

  1. denim says:

    Back in August I commented that a work around to short selling bans appeared to be known:

    Bear Put Spreads: A Roaring Alternative To Short Selling

    http://www.investopedia.com/articles/optioninvestor/09/bear-vertical-put-spread.asp#ixzz24soQHp6s

    That being a known strategy, who can say there ever was an effective short selling ban that kept a determined investor from shorting?

  2. DeDude says:

    No not a ban. Tax it. Lets say an 80% tax on any profit from shorting in any of its forms. Add a minimum hold of 2 months to all forms of shorting and random delays in unloading them (you may have asked to unload today, but your are the lucky randomly chosen winner of a 1 week delay). Suddenly the risk/benefit analysis will make it stop all by itself.

  3. franky4fingers says:

    DeDude, while we’re at it, let’s perhaps torture shortsellers in stocks (nomen omen) at some focal point of each financial centre, with the public casting tomatoes at them. After all, that is what free markets are all about, aren’t they.

  4. techy says:

    I think short selling in financials should be banned all together. Since they work on trust and if trust is lost they are as good as bankrupt. It is very easy to destroy a bank if it operates on 15 times leverage and deals in illiquid market, it will be bankrupt if it tries to liquidate its asset and loses even 8%.

    • You have it exactly backwards — since they work on Trust, you would think they would be extra cautious about engaging in ANYTHING that put that Triust at risk– but we know banks don’t operate that way.

      This sort of silly ignorant view did lots of damage during the last crisis. Please whatever you do, stay out of policy.

  5. DeDude says:

    @franky4fingers;

    Free markets???? – what planet are you from? All markets here on earth are manipulated. We call it regulation when governments do the manipulation, we don’t talk about it when Wall Steet banksters does it (although some of the big manipulators call it “free market forces” when they do it).

    Personally I have no problem with people playing with fire as long as it is not someone else’s house that get burned to the ground.