Short selling not a factor in banking beatdown

With conspiracy theorists and corporate crybabies up in arms about short sellers and their exhibitionist twins -- naked short sellers -- manipulating markets and causing the collapse of companies like Bear Stearns, the man in charge of regulating the British market, says that's just a bunch of poppycock.

Adair Turner, the chairman of the Financial Services Authority, said that the FSA's lifting of the ban on short-selling last Friday had not played a "significant" part in the meltdown that has occurred in the interim.

"So far, we have not seen stuff (that) suggests that short-selling and in particular abusive short-selling has a significant role in what has occurred, he told the BBC.

Let's recap: Last September short-selling was banned and then the ban was lifted and the market absolutely crumbled within a week. Why? Because people were concerned that the financial stocks had no value because they would require nationalization to avoid outright failure.

Short-sellers are a convenient scapegoat for the current mess but so far there's very little to indicate that it has any relevance at all.