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Unintended Consequences From Short Selling Ban
Two short quotes on this latest folly by government.SEC are insisting the bans are temporary measures and that they believe short selling is a "legitimate trading investment technique in normal market conditions", the hedge fund sector thinks it is being scapegoated. "The knee-jerk reaction of politicians is just mind-blowingly stupid," said one short trader. "Obvious pressure has been applied on the FSA to be seen to be doing something and they have come up with this little gem the problem in the markets is nothing to do with short selling." and Some analysts warn that the regulators' moves against short selling may actually damage the intended beneficiaries of the crack-down, with the prime brokerage units of banks suffering a sharp fall in revenues. "The ban on short selling will mean some hedge funds will not be able to execute strategies they want to do," Andrew Shrimpton, a partner at the hedge fund consultants Kinetic Partners, said. "It is going to impact the profitability of prime brokers, there is no question of that," he warned. Posted by: badanov 2008-09-20 |
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