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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (85501)	9/19/2008 3:13:18 PM
From: TimF	Read Replies (1) \| Respond to of 542007

I'm not quite as dogmatic on the issue of short selling as some of the links I post. I do think that short selling is overall positive and useful, and I think even naked short selling, at very worse isn't a major problem. But while short selling generally can't bring down a reasonably healthy company, its possible that in a situation of tight credit (like what we face now) and in when there is low turnover in the specific market* in question, its can be possible to bring the company down with short selling. I can't say that it can't happen, never happens, hasn't happened, won't happen etc. It would be unusual but I don't agree with the economist/blogger that I linked to, when he says its impossible. * (by "market" in this case I mean market for the shares of a company, and/or the market for securities that represent a vital part of its operation, not a wider market like the NYSE) 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. For a company ok? For the whole market? Well if by "overwhelm" you mean push the market down by A LOT than I agree, its something that could happen. But I'm not sure that I would use the term "overwhelm" for such an occurrence, and more importantly I'm not sure what you mean by overwhelm.