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I find it quite refreshing and re-assuring in a cynical,selfish business World (where lets face it!) so many Corporations and Multi-Nationals are purely out for their own personal gain that this marvellous Bank,with barely a thought for their own situation, have altruistically put their metaphorical arm around Halifax and Co, raised the necessary funds and preserved them for the collective benefit of our great Nation and all its people.

BRAVO! I SAY.:)-D

I'm sure the hedge funds bought back at a decent level to cash in on their shorted positions. And then probably went long before making a 45% gain on HBOS!


I strongly believe that shorting rules should have been tightened up by now though - they are used purely as speculative bets. This has nothing to do with hedging positions - that's what put options are for. In the future, regulation around stock lending will be tightened up I'm sure. I'm not saying that short selling has caused all the problems, but it sure hasn't helped matters.


It'll be interesting to see if Goldman bankers try to take the bank back into a partnership. This wouldn't surprise me, since I think a merger is the last thing they'd go for...

Does anyone think that it's rather ironic that Lloyds-TSB were not able to buy Abbey as it would have given them too much of a monopoly and Abbey has been sold to a Spanish Bank. But now they have bought HBOS at a knock down price and ended up with an even larger share of the market than if they had bought Abbey.


They must be laughing all the way to the bank, so to speak.

Regulators just cannot keep up with the bankers. A loophole will be found and exploited and regulation takes years to put in place. As regulation is established, a new more complex product / structure is invented. Regulation and control around banking is extremely complex. The Basel II regulation is only scratching the surface.

AcedOut Wrote:

-------------------------------------------------------

> This has nothing to

> do with hedging positions - that's what put

> options are for. In the future, regulation around

> stock lending will be tightened up I'm sure. I'm

> not saying that short selling has caused all the

> problems, but it sure hasn't helped matters.


Sometimes traders go short for hedging... for instance, to hedge a put option that their bank has issued. Short selling also plays an important role in regulating over-inflated prices. In fact, it's pretty much essential... which is why I think that such a tax would be impossible to implement.

The thing is, sometimes people are long term investors. Sometimes they are day traders following up or down trends. Sometimes they are market makers supporting the trading activity of long term investors. Sometimes they are short sellers with a negative view on a stock. No doubt sometimes they are rumour mongering law breakers that are falsely talking the stocks up or down. This is what makes a market - different drivers and attitudes.

If you actually believe that the short sellers have been the major force in driving down the price of HBOS since its peak in June last year, then you are crediting them with too much power. The facts on the amount of stock on loan for HBOS dont support your argument.

What you should really be doing is asking why HBOS management has been working on a merger for a while without disclosing to anyone publicly that they were in increasing amounts of trouble. The bottom line is that the stock price went down because long term investors gave up and sold and no one else wanted to buy. Stop looking for scapegoats and look at the poor management.

If you write a put option, you're net long the underlying (long delta). Yes, you can sell short to hedge (reduce your delta), but you can also write calls. In understand what you're saying, but the number of short positions must be limited somehow.


Regulation of over-inflated prices? Surely an over-inflated stock would cause an investor to sell hence driving down the price? I'm not sure I follow that reasoning.

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