From the FT: Eat my shorts (subscription required).
A fun bit:
Short-sellers depend on two things: borrowing stock and leverage. Yet with each investment bank collapse, the universe of prime brokers that provides this leverage shrinks.
More important, in a world more concerned about return of capital rather than return on capital, investors may stop lending stock, fearing the prime broker might collapse and be unable to return the shares. Indeed some institutions, wary of counterparty risk, have already stopped stock lending.
Confused? Wikipedia can help. Definitions for short selling and stock lending.
Eat my shorts, indeed

~alex


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