A Son of the Rock

The practice of short selling, whereby stock market traders effectively bet on a decline in the value of a share (which often they do not actually own!) and thereby make money by buying shares at the newly created lower price in order to give back shares they “borrowed” at a higher price, has now been banned temporarily.

The practice had been partly blamed for the assault on HBOS’s shares which led to its recent takeover by Lloyd’s TSB.

I admit I am not an economist but, however much short selling may be an identifier of a share which is overvalued, its effects can certainly be pernicious – especially when the markets indulge in one of their feeding frenzies. The point is, in these circumstances, it puts pursuit of short term profit for an individual or an organisation above any other consideration – including that of the common good.

This is particularly so in the case of short selling of shares in banks.

Think of it this way: short selling, however legal it was and might again be, actually consists in betting directly on losses in various other people’s jobs, investments, savings and pensions.

And that, I would submit, is immoral.