Did John Mack, HBOS and FSA cry wolf? Sunday, September 21, 2008
Never let facts get in the way of a good story.
Paul Kedrosky highlights the extent of shorting on Morgan Stanley as a percentage of the market value of the company, using data from Data Explorer - I cannot attest to the accuracy of the numbers.
Likewise, the FT also reports Data Explorer's data in relation to HBOS and highlights that bank’s market cap on loan this week was actually less than 3 per cent - nowhere the July high.
July 2008: 7% (peak)
Sept. 1, 2008: 2%
Sept. 16, 2008: 2.8%
source Data Explorer
Finally, UK stockbroking firm, Charles Stanley has provided a table of shorting in UK.
Hmmmm. So where is the huge volume of shorting the drove financial stocks down? Might holders of the shares actually have been dumping the stocks in fear and the glut of sell order depressed prices? Evidently we need a new FSA rule to stop people selling for less than they paid for the stock and a market circuit breaker that precludes prices falling.
Better yet, perhaps the FSA could publish the numbers on which they based their rule change, or is it good enough that the market jumped by its' highest percentage gain ever to justify the change?