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Politics : View from the Center and Left

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To: TimF who wrote (85496)	9/19/2008 2:52:06 PM
From: Katelew	Read Replies (1) of 542009

My guess, no evidence, just a guess is that we'll learn that short selling in the past 6 months is similar to the run-ups of commodity prices in this way....the sheer enormous size of investment money looking for ways to profit right now. Not only hedge funds but again, back to ETFs. I think the long-only commodity ETFs distorted things and possibly the short and ultra-short ETFs were putting undue pressure on the stock market. Add leverage to the mix and the fact that hedge funds, being opaque, can collude and target a specific company to short if they want to, and it's not hard to see a situation where money committed to short-selling could overwhelm the stock market just by its sheer size. Just my guess and, if true, not sure what should be done about it going forward....if anything.

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