The Boston Herald: Demonizing short sales bad idea amid economic uncertainty

Short selling is an essential tool hedge funds utilize to deliver returns for the critical institutions that depend on them. In an op-ed in the Boston Herald, Timothy Lee of the Center for Individual Freedom argues that restricting short selling will only have a detrimental effect on the economy. Key excerpts can be found below.

“Moreover, short sales serve a critical signaling role in markets and our economy, which is why efforts to restrict or even prohibit them are so dangerous. Contrarian short-sellers challenge conventional market wisdom, and thereby help identify potential bubbles, overpriced stocks and wise investment opportunities.”

“The effort to restrict or even prohibit short sales would inhibit American markets and investments at the worst possible time. What the American economy needs at this moment of sudden peril is more certainty and flexibility, not less.”