Wednesday, May 19, 2010

Germany cracks down on shorting

Germany bans naked shorting. Rather than go after the root cause of the euro problem - they go after the hedge funds.

On a related note, my co-authors and I are just putting the finishing touches to a paper that shows that short sale restrictions in one country lead to more shorting elsewhere, and cause prices to deviate from fundamentals more often. Perhaps I'll send Merkel a copy.

1 comment:

  1. The only time you hear about short sellers is when they are right. They might be more cynical that realists, but in a boom anyone can bet the long, it takes a guy who actually looks at the numbers to dare to bet short side and wait for everyone else to figure it out. Then he gets criticized or in this case, put out of business for being the smarter side...odd.

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