Iron ore price, page-9155

@tbo35 - an excellent and thought provoking post (unlike a lot of other rubbish being posted on this thread at the moment).

I hadn't ever considered this kind of behavior occurring, but now you mention how easy it could be done, it makes complete sense. Of course it would be highly unethical, but when it comes to making money, these large players would have little ethics and regard for other players in the market.

Of course, if shorting was banned (in my opinion it should be), then this kind of practice and market manipulation would be harder to achieve. As you say, if the big players worked in together, they could make money by the share price going up or down, as long as the SP is moving in the direction they anticipate.

But unfortunately, whilst you have market regulators such as ASX, that make there profit primarily due to high trading volume, they will not ban shorting, as it will impact on their bottom line (clearly a conflict of interest, and in my view the market should be regulated by the government).

Some hedge fund managers argue that shorting creates a better share market , as it doesn't allow the markets to become overheated and ensure market is correctly priced. I think their arguments are a load of crap. Shorting is an artificial concept (selling shares you don't even own). In my view, it makes the share market a more dangerous place to invest for small investors such as us (as you pointed out), and only serves a purpose of creating potential wealth for scum bags like hedge funds, fund managers and other short term gamblers. They potentially make money from the "unsophisticated" long term shareholders, and put companies and their employees jobs at risk in the process. Its a grubby practice.