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Are short sellers.....

percybpercyb Posts: 3,301 ✭✭✭
in Precious Metals
Are short sellers still being blamed for the collapse of various asset classes? Or has that theory about short sellers being responsible for falling security and commodity prices been debunked okay?
"Poets are the unacknowledged legislators of the world." PBShelley

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    COINB0YCOINB0Y Posts: 4,505
    No, the blame is on Banks lending money to folks who can't pay it back and then lying that nothing is wrong.

    When a Bank only has a reserve of 10% on its Loan Book of 100% (Called Fractional Reserve Lending), and over 10% of the Loans are bad, the Value of its shares are inflated because they don't reveal the troubled loans.

    When you short a Bank or Investment House like LEH that is lying, you are just allowing the Market to vett out the lie.
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