Comments on: Citigroup proof that shorting is destructive http://www.crikey.com.au/2008/11/21/citigroup-proof-that-shorting-is-destructive/ now with extra source Sun, 12 Feb 2012 02:48:10 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Ice http://www.crikey.com.au/2008/11/21/citigroup-proof-that-shorting-is-destructive/#comment-6090 Ice Thu, 01 Jan 1970 10:00:00 +0000 #comment-6090 No, "shorting" is not destructive -- "snorting" is destructive! No, “shorting” is not destructive — “snorting” is destructive!

]]> By: Peter http://www.crikey.com.au/2008/11/21/citigroup-proof-that-shorting-is-destructive/#comment-6091 Peter Thu, 01 Jan 1970 10:00:00 +0000 #comment-6091 I can't see how any sort of short selling can be terminal for a strong and viable company. Since the shares have already been issued, how does it affect the company? It's the shareholders that have a short-term problem, but if the company is strong then they can take the opportunity to buy more shares while they're cheap. <br /><br />Sure, if a company needs to raise capital then having a really low share price is a problem. The need to raise capital would imply the company is not in that strong a position which is probably why short sellers would target it.<br /><br />Please let me know if I'm mistaken here.<br /> I can’t see how any sort of short selling can be terminal for a strong and viable company. Since the shares have already been issued, how does it affect the company? It’s the shareholders that have a short-term problem, but if the company is strong then they can take the opportunity to buy more shares while they’re cheap.

Sure, if a company needs to raise capital then having a really low share price is a problem. The need to raise capital would imply the company is not in that strong a position which is probably why short sellers would target it.

Please let me know if I’m mistaken here.

]]> By: Merri http://www.crikey.com.au/2008/11/21/citigroup-proof-that-shorting-is-destructive/#comment-6092 Merri Thu, 01 Jan 1970 10:00:00 +0000 #comment-6092 blaming shorts might be a bit hasty:<br /><br />http://globaleconomicanalysis.blogspot.com/2008/11/citigroup-blames-short-sellers-for.html blaming shorts might be a bit hasty:

http://globaleconomicanalysis.blogspot.com/2008/11/citigroup-blames-short-sellers-for.html

]]> By: Big Bear http://www.crikey.com.au/2008/11/21/citigroup-proof-that-shorting-is-destructive/#comment-6093 Big Bear Thu, 01 Jan 1970 10:00:00 +0000 #comment-6093 For those who don't know what shorts are. Here is how it works. There's Bermuda shorts, summer shorts, walk shorts, day shorts, golf shorts and most importantly - NAKED shorts. It's this last category (which has nothing to do with apparel) you should know about. Legal shorting involves borrowing stock (renting it from its owner for a fee) to sell at today's higher price, in the hope it can be bought back tomorrow at lower price. It's then returned to the original owner and the difference is pocketed as profit. Sweet. You make money from a falling market. The cover for this practice is; it liquifies and disciplines the market. NAKED shorting involves selling stock you don't own. By doing so the stock must be counterfeited. Yes folks. Dirty secret. It's Fraud. Theoretically, you could sell more shares than are on issue. That's why it’s illegal. Does anyone care it's illegal? No. Does anyone look? No. Has anyone been prosecuted? No. And you thought derivatives were the only Bankster game in town. The Federal Reserves got its hands on billions by threatening the Congress with Martial Law. it's stealing trillions whilst refusing to say where it's going. This is despite US Senate hearings this week demanding answers for the bait and switch. Did you hear about this in the corporate media? Nope. You had to come to Crikey. The Plunge Protection team is gyrating markets from the US Treasury's dark dank Dr Evil basement with its global wall screen aglow following the sun. The Bullion Banks are using naked gold and silver to short the Comex. Suppressing Gold which otherwise would be the only safe harbour investment to which punters could escape from this mayhem. Australian Superannuants and US 401K sheeple are being shorn whilst dutifully lining up to have their tickets clipped for the privilege. Bigger bucks have never been made by the elites. Who says things are crook? They've never been better! From Chaos comes Order. In the meantime, for the rest of us it's burn baby burn. For those who don’t know what shorts are. Here is how it works. There’s Bermuda shorts, summer shorts, walk shorts, day shorts, golf shorts and most importantly - NAKED shorts. It’s this last category (which has nothing to do with apparel) you should know about. Legal shorting involves borrowing stock (renting it from its owner for a fee) to sell at today’s higher price, in the hope it can be bought back tomorrow at lower price. It’s then returned to the original owner and the difference is pocketed as profit. Sweet. You make money from a falling market. The cover for this practice is; it liquifies and disciplines the market. NAKED shorting involves selling stock you don’t own. By doing so the stock must be counterfeited. Yes folks. Dirty secret. It’s Fraud. Theoretically, you could sell more shares than are on issue. That’s why it’s illegal. Does anyone care it’s illegal? No. Does anyone look? No. Has anyone been prosecuted? No. And you thought derivatives were the only Bankster game in town. The Federal Reserves got its hands on billions by threatening the Congress with Martial Law. it’s stealing trillions whilst refusing to say where it’s going. This is despite US Senate hearings this week demanding answers for the bait and switch. Did you hear about this in the corporate media? Nope. You had to come to Crikey. The Plunge Protection team is gyrating markets from the US Treasury’s dark dank Dr Evil basement with its global wall screen aglow following the sun. The Bullion Banks are using naked gold and silver to short the Comex. Suppressing Gold which otherwise would be the only safe harbour investment to which punters could escape from this mayhem. Australian Superannuants and US 401K sheeple are being shorn whilst dutifully lining up to have their tickets clipped for the privilege. Bigger bucks have never been made by the elites. Who says things are crook? They’ve never been better! From Chaos comes Order. In the meantime, for the rest of us it’s burn baby burn.

]]> By: Irritated http://www.crikey.com.au/2008/11/21/citigroup-proof-that-shorting-is-destructive/#comment-6094 Irritated Thu, 01 Jan 1970 10:00:00 +0000 #comment-6094 So its the hedge funds again? So 'short sighted', pun intended.<br /><br />Shorting is not the problem, people perpetuating stupid notions that it is are the problem. Give the market a chance to correct, if the value of Citigroup is unrealistic, then being long is the right trade, anyone driving the price below that is merely increasing your potential profit... in that manner it ADDS liquidity to a market that desperately needs it to be efficient. Taking away the markets tools to correct itself, precisely when it needs all its tools to do that, is foolish; profiting from prices that are illogical is what investing is all about... but you need to invest to profit.<br /><br />If you keep making excuses - its the evil hedge funds shorting my stock, not my ignorant management or the media focusing on short term indicators - you don't admit your mistakes and/or continue to ignore reality - hello market bubbles! Hello opportunity! <br /><br />Despite the current pain, the world needed this correction... it is people staying out of the market that is perpetuating these problems, not the people choosing a direction... short or long. So its the hedge funds again? So ‘short sighted’, pun intended.

Shorting is not the problem, people perpetuating stupid notions that it is are the problem. Give the market a chance to correct, if the value of Citigroup is unrealistic, then being long is the right trade, anyone driving the price below that is merely increasing your potential profit… in that manner it ADDS liquidity to a market that desperately needs it to be efficient. Taking away the markets tools to correct itself, precisely when it needs all its tools to do that, is foolish; profiting from prices that are illogical is what investing is all about… but you need to invest to profit.

If you keep making excuses - its the evil hedge funds shorting my stock, not my ignorant management or the media focusing on short term indicators - you don’t admit your mistakes and/or continue to ignore reality - hello market bubbles! Hello opportunity!

Despite the current pain, the world needed this correction… it is people staying out of the market that is perpetuating these problems, not the people choosing a direction… short or long.

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