Don't shoot the messenger; Short-selling.(Why short-selling should be encouraged)

Economist (US), The, March, 2003

Although it is under fire, short-selling should be encouraged

WHEN markets fall, short-sellers--who try to make money by selling shares they do not own, in the hope of buying them back at a lower price--become everybody's favourite whipping-boys. They are accused of aggravating pain by further driving down the market. Before long, people start muttering that something must be done to stop the tawdry practice.

Those who call for restrictions are often trying to run companies in trouble, or entire economies that are on the ropes. David Prosser, chief executive of Legal & General, a British insurer, called last summer for more "grit in the system" to work against short-selling. A little later, L&G tapped shareholders in a rights issue for pound...

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