Wachovia is a good prime example of a sizable but domestic bank that they didn't protect. The ADR's naturally trade a large volume in the US, but arguably, why NOT protect US companies rather than them. The primary equity isn't even traded here, but on their own domestic exchange.īNP Paribas (French), Barclay (UK), Mizuho (Japan). The thing I find interesting is a significant number of those firms being prevented from blind shorts are international ADR's. Unfortunately, too many people would be affected fiscally with another major broker falling. In a perfect free market, you're right Village. The gov't would be wreckless not to assist with something of that significance, plus the political fallout would be tremendous. They live on the volume, and if the buzzards are circling a company like LEH or another significant institutional broker, when that company falls, literally millions of people will be affected indirectly.
Most hedge funds are long/short strategy in fact, primarily based in US equities with dabbles in fixed income, currency, derivatives, etc. I'd agree in a true free market, let the cards fall where they may, but the waves into the macro US economy would be staggering. They're protecting from another Bear Sterns type of company falling apart. They're just gargantuan conglomerates vs domestic banks like Wachovia.īNP Paribas Securities Corp. Here's a list of the companies that the SEC stopped blind shorts on for the immediate future. Wachovia is attempting to raise tremendous upgrades too. It would just cause immense further panic in the financial industry, plain and simple.
That said, I don't see the gov't letting any other big banks fall like Bear. Village - it's not that you can't short the SEC listed companies, it's that you can't BLIND short them. Wachovia was NOT part of the SEC list, so they are still fair game for blind shorts.
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