Short selling lies

esbo

MarkyMarkD wrote: »

If you own them, but lend them out, you still have the right to get them back and you still have the financial interest in their value. It's irrelevant if they are lent out or not because you will, eventually, get them back.

No it i is not irrelevant at all it makes a huge difference.
I sincerely hope the stock my broker held for me was not lent out, any broker who 'lends out' stock he does not own should be shot, whatever convoluted methed he uses.

esbo

Debt_Free_Chick wrote: »

less than 3% of HBOS stock was on loan in September

And who in their right mind would have lent out their shares in September?
Certaintly nobody who actually owned them.

tradetime

Debt_Free_Chick wrote: »

It's been around for ages - there's nothing "new" in it. Shorting - alone - has not caused the current crisis. I don't doubt it didn't help HBOS, but it was targetted for "good reason", even if that reason was just market jitters about how it would fare in the short/medium term. Apparently, less than 3% of HBOS stock was on loan in September

The whole market is so bizarre at the moment - no decisions are being based on "fundamentals" - it's more a case of "how do we feel about this today?"

Very true, short selling has always had many detractors, some like to blame short sellers for market crashes, but there is very little evidence to support this, derivative and program trading are just as likely culprits.
Against this it cannot be denied that short sellers provide benefits to the markets, they add liquidity, and drive down the prices of over priced stocks. Short sellers are often the first to detect wrong doings in companies, weakness in business plans, bad management or plain out fraud. It is widely accepted that the research of short sell analyst is amongst the most detailed, they have no conflict of interest that exists with other analysts.
Of course as with everything in life, I'm sure there are those that engage in unethical practices.

tradetime

esbo wrote: »

No it i is not irrelevant at all it makes a huge difference.
I sincerely hope the stock my broker held for me was not lent out, any broker who 'lends out' stock he does not own should be shot, whatever convoluted methed he uses.

I suggest you hold your stock in paper certificates then, as most if not all brokerage firms do, it's one of the ways they generate income.

sabretoothtigger

Bank of America (BAC), who are due to buy Merrill, have just 2.58% MCOL, AIG (AIG) have 4.13%, Goldman Sachs (GS) have 2.47%, and Morgan Stanley (MS) have 2.43%. The stock with the highest percentage on loan is Washington Mutual (WM), with 24.68%.

Some usefull info there thanks

http://www.dataexplorers.com/

Ford Motor company has 70% of its stock out on loan !!!!!! :O



Lehmans

esbo

tradetime wrote: »

I suggest you hold your stock in paper certificates then, as most if not all brokerage firms do, it's one of the ways they generate income.

Ha well they will have no income from me in the future then.
As anyone who want to trash my shares can go fook themselves.

Infact if that is the case only an idiot would hold shares.

Stompa

sabretoothtigger wrote: »

Lehmans

There's a very nice symmetry there!

Debt_Free_Chick

esbo wrote: »

And who in their right mind would have lent out their shares in September?
Certaintly nobody who actually owned them.

The institutions who, in this country, own the vast majority of UK shares. Pretty sure they all do it. So if you have units in any fund, don't be surprised to find that the manager undertakes some stock lending.

It's been "normal practice" for so long as I can remember (about 25 years).

Debt_Free_Chick

Anyone else have a slightly uncomfortable feeling about the Government interfering with the markets?

Surely ... the markets determine the value of shares. Now the Government seems to have a say in it.

Doesn't seem right to me ..... any other views?

baby_boomer

You can still sell shares you own. And that could drive down the price.

And if you buy enough shares, that could drive up the price.

Sounds like a market to me!