The following is not about short selling, but it is very close. It may be closer to what is going on with IPM, its detractors, short sellers, and the very negative publicity in the media.
This version of the story was scanned from the book, "The Creature From Jekyll Island", by G. Edward Griffen, a history of the formation of central banks and our not so Federal Reserve.
THE BATTLE OF WATERLOO
The final outcome of the battle at Waterloo between Wellington and Napoleon was crucial to Europe both politically and economically. If Napoleon had been victorious, England would have been in even greater economic trouble than before. Not only would she have lost international power and prestige, but even at home, her subjects would have been further disgruntled over such great personal and financial wartime sacrifices. Her defeat almost surely would have resulted in not being able to repay the great amounts she had borrowed to conduct the war. In the London stock exchange, therefore, where British government bonds were traded along with other securities, everyone waited anxiously for news of the outcome.
It was well known that the Rothschilds had developed a private courier service that was used, not only to transport gold and other tangible cargo, but to rapidly move information that could be useful in making investment decisions. It was expected, therefore, that Nathan in London would be the first to know the name of the victor after the cannon smoke had cleared from the battlefield. And they were not to be disappointed. The first news of Wellington's victory arrived in Brussels around midnight on June 18, 1815, where a Rothschild agent named Rothworth was waiting in readiness. He immediately mounted a fresh horse and set off for the port of Ostend where a boat was standing by to speed him across the channel to London. In the early hours of June 20, the exhausted messenger was pounding on Nathan's door, a full twenty-four hours before Wellington's own courier, Major Henry Percy, arrived.
At least one friendly biographer claims that Nathan's first act was to deliver the news to the Prime Minister, but that government officials were hesitant at first to believe it, because it ran contrary to reports they had received previously telling of serious British setbacks. At any rate, there is no doubt that Nathan's second act of the morning was to set off for the stock exchange to take up a position at his usual pillar.
All eyes were upon him as he slumped dejectedly, staring at the floor. Then, he raised his gaze and, with pained expression, began to sell. The whisper went through the crowded room, "Nathan is selling?" "Nathan is selling!" "Wellington must have lost." "Our government bonds will never be repaid." "Sell them now. Sell. Sell!"
Prices tumbled, and Nathan sold again. Prices plummeted, and still Nathan sold. Finally, prices collapsed altogether and, in one quick move, Nathan reversed his call and purchased the entire market in government bonds. In a matter of just a few hours, he had acquired the
dominant holding of England's entire debt at but a tiny fraction of its worth.
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