By Neil Wilson
Was it ever thus? Perhaps it is simply human nature to seek a
scapegoat. Certainly, it seems that whenever the markets are in
freefall and losses are leaving blood on the Street, there is a
scramble to find somebody to blame. And who are the usual
suspects? The hedge funds, of course - those bad guys
mercilessly shorting the hell out of stocks.
Such was the case the last time markets plunged - in the
wake of the tech bust, when equities fell more than 40% from
2000 to early 2003. During that period, many listed companies
and long-only investors complained loudly about hedge fund
behavior, and some institutions even withdrew from the
stock-lending market to try to frustrate the short sellers.
And it is the case again, this time around, in the wake of
the credit crunch. Only this time, the regulators seem to have
gotten caught up in...