When China\’s growth will decelerate or come to an abrupt stop is probably the most critical question facing the world economy. But predictions of a hard landing on everything from bad loans to investment-led overheating or inflation has yet to derail the country\’s expansion.
This is because the government-controlled economy is insulated from speculators testing the true voracity of the market, claims Mr Zuckerman. \”We need short sellers,\” he said.
\”The problem with the housing bubble was that for a long time people couldn\’t bet against it. Credit default swaps gave hedge funds specific tools to short the entire market. That pricked the housing bubble.
Yup, far from being those evil bastards of the popular imagination, short sellers are exactly and precisely the people who are able to burst bubbles. Far from banning them, we need to develop the tools to allow them, to make it easier for them, to operate.
For an example of someone shorting a Chinese share (no, not the whole economy) how about this? Our Man thought there was something dodgy about the company. He shorted the stock. Then continued to investigate, as he has done with several similar companies, and was able to find out that it really was all a scam.
It was this same short seller who uncovered the fraud at Astarra Strategic.
Good to have people like him in the markets really, isn\’t it?
So could all the idiots who demonise short sellers please shut the fuck up?