Sunday, September 21, 2008

HBOS admitted the short sellers had it right all along

FSA faces legal action over short-selling ban-papers

*Not directly related to house prices*. The UK Financial Services Authority faces legal action from a group of leading hedge funds over the ban on short-selling financial shares it imposed on Thursday

Posted by paul @ 05:19 PM (969 views)
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4 thoughts on “HBOS admitted the short sellers had it right all along

  • Excellent news!!

    Nobody should be able to wipe out short sellers (particularly small players) who diligently analyse that this is a pile of dog mess.

    Who ever heard of anything so moronic as removing the -1 rating from a +1, 0 -1 advanced information discovery mechanism.

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  • They can be pursued in the full amount plus distress.

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  • japanese uncle says:

    FSA is simply playing with socialist regime approach when its convinient, while playing with laissez-faire again when its convinient.

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  • I think it is related to Housing.
    Shorting i.e. selling shares in view of fall in share prices causes the biggest problem for these banks and house builders.
    The banks need to have a certain proportion of capital vis a vis their loan. Hence a fall in share value means they need to raise money. (That is why most of the banks have raised money recently)

    Most of the house builders Barrat, Taylor Wimpey, Red row etc. have a hugh loans many times their capital. And they have to keep that in proportion. Else face a call from the lenders for loan. So falling shares will get them in deep trouble as they will have to raise money and no one will be willing to.

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