Alby_da_Wolf said:
I totally agree that irresponsible states must put again their balance under control. I'd like, though, that this were made without playing into speculators' hands. As, at least in the Italian case, the state spends a huge part of its revenue to support itself, its huge costs, including public administration workers' wages, and those of ministers and members of parliament too, couldn't it be a good idea to partially pay their wages beyond the lowest income classes with bonds emitted at lower interest than what investors now pretend, at the same time reducing the number of bonds emitted at higher interest rate? It would at the same time contribute to defuse the vicious upward spiral, and it would put a larger part of the debt in the citizens' hands. About shortselling bans: I know there are studies that conclude that way, but in a global market, how could a local ban on shortselling work? Bonds could be shortselled anyway in countries where it's permitted, so that studies are flawed, or maybe not, they are just read in a different way from what they actually mean: they just prove bans don't work, but they DON'T prove shortselling doesn't add further damage. |
A defualt never plays in "Speculators" hands.
Outside which, you can't shortsell anything outside of it's financial market.
That's why whenever you buy stock in a foreign company you have to buy it on that countries Stock Exchange.
The closest thing companies could do is shortsell related companies... which already happens.
For example, with Italy, what would be shortsold would be investment banks. Doesn't even matter if they have ties to Italy or not since ALL banks more or less go down whenever there is bad news making shortselling financials in a time of crisis an easy call.
Which is why it'd be insance for said investment banks to shortsell governments bonds if they thought shortselling hurt a company. They'd be inviting shortselling on themselves.