call on bankers to have a sense of reality

Ok I read all the seven articles in the Fin Rev that mention Allco today. There is also that "Michael West" article that someone posted here today. In short, all doom and gloom. Only six moths ago most of those journalists were falling over themselves telling us how clever and talented David Coe and his team were. So what has changed? Sentiment as a consequence of the global credit crunch? For what its worth this is what I wrote to a friend several weeks ago:

"The hedge funds are real financial sharks. My theory is that they smelled a rat. They must have found out that some of Allco's closed funds had a lot of AFG shares lodged with banks and financiers as security, and they must have known that if they drive AFG's share price down sufficiently then there would be a margin call on those closed funds, which might then result in even more AFG shares being dumped on the market, - if that were to happen then they could just sit back and watch the disaster unfold. Such an action might even destabilise the whole Allco Finance Group, making it very hard for them to operate because they need a good credit rating to source funds on attractive terms. In any case, the hedge funds would think that they could always buy AFG shares back at a cheaper price."

I am sorry to say that my premonition is becoming a nightmare. Yes, like many of you here, I hold AFG shares.
I suppose the lesson we are all learning is that, forget the fundamentals, the share price is the leading indicator.

Indeed I would say that there is nothing wrong with Allco that was not wrong six moths ago. And David Coe and company are smart (perhaps too smart by 1/2) and I believe they would have been able to adjust to the changing world if they could just keep their reputations in tact. Just think, if the hedge funds had not shorted AFG stock the price might still be around $5 or $6 and then the foundation investor of their Global Infrastructure fund would not have been scared off and there would be no need for the banks to send in crisis teams now. Oh what a difference a few weeks makes.

I do not suppose any bankers read this post but if they do I would just appeal to you guys to have a sense of reality. Would you still be concerned if AFG were selling at $6 ? Just call the bluff of those hedge funds and see them clamour to cover their short positions.

Wishful thinking on my part. I know, "morality" is not part of the vocabulary of the financial world.