Greenspan's worst sin is that he has become the short's best ally--
Beginning with his "irrational exuberance" pronouncement, followed by his admonition that investors should not expect the Feds to bail them out, he flashed the shorts a green, all-clear-ahead signal. Then he put his (our?) money where his mouth was, with the six staggered rate increases, each providing a new reason for the market to tank. Now, we have the same staggering of the rate decreases, each just enough of a disappointment to keep the shorts in business and happy. Have short sellers ever had a more dependable, or better, friend and ally?
This is not to make the point that longs are good and shorts are bad. But, the inescapable reality is that average investors do not engage in short-selling. The great mass of Americans who are in the market are in it with long positions, whether individually or in mutual funds. Short-selling is practiced by professionals or within the comparatively narrow range of the most experienced, probably full-time, individual stock traders.
So who's interests are being protected and fostered by Mr. Greenspan? And who elected him to do his work? |
