Short selling,can it be right?

After all we have seen in the media in the last few weeks about the financial world being bought to it's knees by short sellers I decided yesterday to do a little research and see what short selling is all about.

I was amazed by what I read.I started at www.wikipedia.org and then did some archive reading at http://www.ft.com/ and I will try to explain things as I understand them.

Short sellers borrow stocks and shares and sell them in order to force down the price.Later they then buy back the shares at a lower price and return them to the owner,keeping the profit they have made from the deal.

It would seem that the really big money is being made by not what we would think of as share traders but by really clever mathematicians sitting at computer screens.I suppose this is what we call progress but what worries me about the whole thing is that the realism seems to have left the stock markets and nobody sees the bigger picture or what the outcome of their actions might be,all they see is numbers.

A classic case of this is the collapse of the share price of the UK bank HBOS this week and its subsequent purchase by Lloyds TSB,and so my point for today is this.The HBOS collapse has resulted in 1,000s of small investors losing money and the takeover by Lloyds TSB will result in probably 1,000s of job losses,and so did the short sellers see those ordinary people losing money and jobs when they pressed the button and short sold HBOS?I think not.

Have a great weekend,Lou Smorals.