http://www.dinocrat.com/archives/2008/09/20/how-one-thing-led-to-another-2/ Sat, 10 Jan 2009 03:34:58 +0000 http://wordpress.org/?v=2.6.3 http://www.dinocrat.com/archives/2008/09/20/how-one-thing-led-to-another-2/#comment-313916 feeblemind Sun, 21 Sep 2008 13:34:57 +0000 http://www.dinocrat.com/?p=6788#comment-313916 It seems to me that the eeeeevil shortseller is getting a bad rap in this Wall Street crisis. If these companies weren't leveraging themselves at 30/40:1, they wouldn't be vulnerable to a sustained short selling attack. My banker starts sweating if I approach 2:1 leverage. So my question is, instead of restricting short selling, why not set limits on how hard a company may leverage itself? This excess leveraging makes me do a slow burn. Execs leverage the you-know-what out of a company, meet earnings targets and collect huges bonuses. Then the company is wrecked when the market realizes they are over extended and the share price collapses. Execs walk scot free with millions in compensation. Shareholders and Uncle Sam left holding the bag. There it is. Ignorance sounding off. It seems to me that the eeeeevil shortseller is getting a bad rap in this Wall Street crisis. If these companies weren’t leveraging themselves at 30/40:1, they wouldn’t be vulnerable to a sustained short selling attack. My banker starts sweating if I approach 2:1 leverage. So my question is, instead of restricting short selling, why not set limits on how hard a company may leverage itself? This excess leveraging makes me do a slow burn. Execs leverage the you-know-what out of a company, meet earnings targets and collect huges bonuses. Then the company is wrecked when the market realizes they are over extended and the share price collapses. Execs walk scot free with millions in compensation. Shareholders and Uncle Sam left holding the bag. There it is. Ignorance sounding off.

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