Don't blame the shorts : why short sellers are always blamed for market crashes and how history is repeating itself

Why Main Street blames financial speculation for economic crashes Disdain for short selling is as American as apple pie, dating back to our nation's founding. But as Bob Sloan argues in Don't Blame the Shorts , short selling lies at the heart of every Wall Street transaction and fuels the financial system. Sloan explains that without shorting, credit in high-yield, distressed, convertible bonds and equities vanishes, thus choking economic activity. This eye-opening look at short selling in America provides new insight into our hostile relationship with shorting--a relationship that turns out to be unhealthy and counterproductive. "On the eightieth anniversary of the crash of 1929, we find ourselves peering backward through the virtual looking glass to a time when global markets were in free fall and venerable financial institutions were in tatters. Yet, here in the present, these same patterns seem to repeat, causing commentators, congressman, and commoners alike to scream the same refrain, "Blame the short sellers!"" "Certainly, short sellers make convenient villains: for one thing, they win only when others lose. But in Don't Blame the Shorts, Robert Sloan taps into a 200-year-old American debate to argue that short selling is not what ails our equities trading markets but what keeps them honest. To Sloan, short sellers' objectives are simple: find overvalued securities and bet against overconfident investors. It's an approach that uncovered widespread fraud at Enron, WorldCom, HealthSouth, and other failed outfits long before regulators ever set foot in the door." "Taking the long view of history, Sloan unearths the deep roots of the conflict over speculative investing and its role in our economy. Don't Blame the Shorts is an account that overturns conventional wisdom about short selling and the vital systemic (and symbolic) role it plays in making financial markets less opaque, more accountable, and, therefore, stronger."--Jacket Contents Preface Acknowledgments Chapter 1 The Great Debate: 1790–1800 Chapter 2 Wall Street and Main Street: The Populist Argument Is Born: 1830–1907 Chapter 3 Congress Attacks the Money Trusts: 1907–1920 Chapter 4 The Markets Before and After 1929 Chapter 5 A Lurid Tale of Blackmail, Spies, and Lies: 1932 Chapter 6 Mr. Whitney Heads to Washington: 1932 Chapter 7 The First Prime Broker Was Actually the NYSE Chapter 8 The Senate Tries Again with the Pecora Commission: 1932–1941 Chapter 9 United States v. Henry S. Morgan: 1947–1953 Chapter 10 Yesterday as the Day Before: 1987–Present Epilogue Appendix: New York Times Articles "Vote Wide Inquiry on Short Selling” March 4, 1932 "Bears Planned Raid, Senators Were Told” April 9, 1932 “Bear Raid Inquiry Opens” April 11, 1932 “List of Shorts on the Stock Exchange on April 8 as Given Out by the Senate” April 21, 1932 Glossary A B C F G H L M N P R S U W Notes References Index A B C D E F G H I J K L M N O P R S T U V W Y