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...