Naked greed

Issue section: 

If you thought short selling was crazy enough now check out "naked short selling". (The value of money, Socialist Review, November 2008). Short selling was blamed for the crisis for a while. The practice was to borrow shares, sell them, and then buy them back as they got cheaper.

This business of trading in "fictitious capital" is ridiculous. Moves by the Australian government last month to ban "naked" short selling showed something even more stupid. This is where "funds sell shares they neither own nor have borrowed in the hope of buying them back quickly at a lower price". How can you buy back something you do not own, and have not borrowed?

Simon Guy, Bristol