Shorting ban sends bank shares soaring

[AtW]

Are you sure? in order to short sell you have to borrow shares to cover the exposure or running the risk over night or you have to buy back during the same day, either way this has a full audit trail...

What if you operate in offshore via proxies? Those guys are pretty clever. Personally I think they use naked short selling - not allowed in the USA, but can be done here I think.

[sasguru]

Like the avatar BTW.

atW

[Peoplesoft bloke]

Has anyone actually proven the the Short selling was to blame for the HBOS fall?

The BBC news last night reported that when the (market) investigated the trades over the last few days they found very little evidence of short selling and concluded that this was not to blame....

I saw this too, but if short selling wasn't causing falls in the prices, how come they are all soaring now it's banned? (NB I am not claiming to know - genuine question)

[ookook]

Who cares about shorting? I've been longing the FTSE since the news broke last night

[AtW]

how come they are all soaring now it's banned?

Those scumbags who were shorting like hell now switched to the opposite of shorting - "going long".

[HairyArsedBloke]

I saw this too, but if short selling wasn't causing falls in the prices, how come they are all soaring now it's banned? (NB I am not claiming to know - genuine question)

It's got nothing to do with banning shorting - it's because the US tax payer is going to take over all that dodgy debt.

[AtW]

it's because the US tax payer is going to take over all that dodgy debt.

This won't include UK dodgy house sales...

[aceboy]

The markets are very fickle, there are some fundamentals that drive things, but a lot of it is to do with sentiment, and opinion.

My personal view is: HBOS are the UK largest mortgage provider, while they may not have a lot of toxic (read credit default) exposure on their balance sheet they do hold a lot of UK mortgages. Now while the UK mortgage market has not been caught up in the US sub-prime problems, the potential for people to default on mortgage payment is increasing by the week as the economy slows down & people loose jobs.

I was out which a chap last night who's wife used to work at Nat west in their mortgage recovery department, when she was first started she could not believe the type & numbers of people who would default on their payment, just because they could! Yes there was a lot of genuine ones but a lot were not.

I think all of this fuelled the mass sett off / panic!

[Peoplesoft bloke]

T.......when she was first started she could not believe the type & numbers of people who would default on their payment, just because they could! Yes there was a lot of genuine ones but a lot were not.

This doesn't make sense to me - what advantage would there be to anyone in defaulting on their mortgage?

[stackpole]

Do any of you lot know what you are talking about?