On Sun, Sep 27, 2009 at 2:19 PM, Michael Perelman <[email protected]> wrote: > Short sellers are speculators, but Dean Baker's idea is that short sellers > help to work against the froth of other speculators.
Hi Michael, I guess what I am trying to say is that THEY DON'T! The reason they dobn't is that the majority of money invested on the short-side only comes in at the end of the bubble phase when it merely helps to amplify and deepen the coming bust-phase. I am sure we can come up with very good statistical tests of this, but I offer the following simple data point: short interest in Morgan Stanley quadrupled between Sept 15, 2008 and Sept 30, 2008 even though its stock price had *already* dropped by some 80% from its peak. In other words most short-sellers only piled on to MS well *after* its troubles became known. -raghu. -- "As a matter of fact, no, I don't have a life." _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
