Don't blame hedge funds for HBOS mess

While hedge funds undoubtedly cause issues in the market, the rush to blame shorting for the HBOS si...

While hedge funds undoubtedly cause issues in the market, the rush to blame shorting for the HBOS situation is glossing over much more serious problems. Put simply, several banks are in trouble now because they have run too lax lending and borrowing practices in bull market conditions. The Government has admitted this to some extent, but the fact it happened under the watch of the FSA is yet another headache for Gordon Brown. Looking at the actual impact of hedge fund activity, figures show the amount of HBOS stock lent out for shorting is only around 3.5% of share capital. There is...