Thursday, September 18, 2008

kass: who was shorting who

As to the rumor-mongering, one should not look at the short sellers, we (or more precisely the SEC) should look at the very investment banks that are complaining the most loudly about short sellers. Chinese Walls in brokerages have long fallen, as it is widely recognized that investment firms' proprietary desks are shorting each others' stocks (and pulling capital from each other), likely with information from their own investment banking arms. What if it turns out thatGoldman Sachs (GS Quote - Cramer on GS - Stock Picks) was shorting Morgan Stanley and Morgan Stanley was shorting Goldman Sachs -- and that they both were shorting Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks), Freddie Mac (FRE Quote - Cramer on FRE -Stock Picks) and American International Group (AIG Quote - Cramer on AIG - Stock Picks).

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