Victims of the recession point the finger at short-sellers
Should short-sellers have their hearts torn out and eaten before their eyes while they’re still alive?
It sounds gruesome and a bit over the top, even taking their lower-than-the-low status following their attack on banks such as HBOS.
But it’s what Lehman Brothers boss Dick Fuld wanted to do.
According to an insider account of the events leading up to the world’s biggest corporate collapse, Fuld was prone to level blood curdling threats against those who sold Lehman’s stock short.
“When I find a short-seller, I want to tear his heart out and eat it before him while he’s still alive,” he was quoted as saying during an attack on the bank’s shares.
And according to another report, the pound’s slump to record lows against the euro can be laid at the door of the short-selling wolves who feast on fear and who have the power to turn even a hint of weakness into a self-fulfilling prophecy.
After all, if the respectable George Soros could get away with it in 1992 when he drove the pound out of the European exchange rate mechanism, why shouldn’t less illustrious gamblers do it today - even though they are more akin to jackals than the economic saviour that Mr Soros turned out to be, although it was hard to see it that when the financial blood was flowing on “Black Wednesday”.
City watchdog the Financial Services Authority has to decide soon whether or not to extend the temporary ban on the short-selling of bank shares.
It is a tough call. On the one hand, so the argument goes, short-selling is an integral part of a free(ish) financial market and why shouldn’t those with the foresight spot to corporate and economic weaknesses not cash in, assuming they’re brave enough to risk being caught out when shares go the “wrong” way, i.e. up, as were those who speculated on Volkswagen tanking.
On the other hand, at a time when millions of ordinary folk around the world are suffering the consequences of the games played by market traders and financial “engineers”, there’s a strong argument for putting the jackals down.
But of course, nothing in the world of finance and economics is ever that clear cut. The weak pound is currently doing wonders for retailers within easy reach of Christmas bargain hunters from Euroland.
According to one report today, prices in London are now 25 to 30 per cent below those in Paris and Milan.
The adverse sterling/euro exchange rate is at least keeping the wolf from the door for some.
