Many moons ago, when I traded the Italian lira, whenever it devalued, the market always started to speculate which currency would go next. Sometimes it happened, but sometimes it did not. A similar game is being played out now with financial institutions.
I’m baffled about what there is to be gained in the long term by attacking bank after bank. If it is true that the short sellers are aggressive hedge funds, ultimately they will find out that their credit will also dry up. I’ve always felt that the equity markets were rigged to the upside so welcomed the greater ease with which stocks can be shorted. But it looks as if the system is being completely abused to the detriment not just of shareholders but, as the world tips into recession, the wider public.
How can it be that an institution such as Goldman Sachs, lauded for how well it has been run, suddenly come under attack? If it gets taken out, it will come to regret the day it ever went public, and that is a travesty. I want to know if the stock lenders, which no doubt are probably mainly the long-only funds, have any idea about what they are facilitating.