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It’s the Wrong Time of Year for Shorts

At least in the northern hemisphere.

When I watched the film The Big Short last year, I doubted that it would help people gain real understanding of financial markets and the problems that caused the crash of 2008-9:

You might come out of this film with a better understanding of the events that led to the 2008 financial crisis — or you might not. More likely, I think, you’ll sort-of understand it while you’re watching, but be none the wiser when it’s all over.

I count myself very much in that none-the-wiser position, then and now. In particular, while I knew that the ‘short’ involved somehow betting that the price of a share would go down, it had never clicked with me exactly how the ‘short seller’ could make a profit.

Until today, when I saw this tweet, apropos of the members of a subreddit bringing a hedge fund to bankruptcy, by taking advantage of the fund’s short position. The tweet contains a screen grab of the written explanation, unfortunately, and the tweeter doesn’t know the originator of the text, but here it is:

The key step that I had never understood was the the short seller borrows the shares, and then sells them at the current price. If they drop in price, the seller buys them back and returns them to the original owner. I don’t think I ever realised that you could borrow shares. If you can own something, you can borrow or lend it, I guess, even if it’s imaginary, so it does make sense. If I had ever thought of it, I would have thought, well why would you borrow something that you can’t do anything with?

But you can do something with it: sell it.

Deeply saddened to learn that Mira Furlan, who played Delenn in Babylon 5, has died. Only 65.

Over to JMS:

Four Years Gone

About Brexit and Trump and the legacy of the past four years.

Four years ago, in a piece called ‘Which is Worse?,’ I wrote that:

Brexit is worse than Trump, because Trump is only for four years — less if he gets impeached or twenty-fived, which is almost certain; but Brexit is forever.

Who would have thought, back then, that, while Trump would be gone (having been impeached not once but twice) but Brexit, in its final form, would only be getting started?

I use the word ‘final’ facetiously. David Allen Green has been writing about this too, and he avers:1

In 2016, American voters (via the electoral college) elected Trump for a term of four years, while those in the United Kingdom voted for Brexit with no similar fixed term.

One decision was set to be revisited in four years, the other was not.


There will be no cathartic Biden-like ceremony to bring Brexit to a close.

This is because of the nature of the 2016 referendum (which, unlike the election of Trump, was not a decision for a fixed period); and because of the dynamic structure of the new relationship as set out in the trade and cooperation agreement; and because of the unsettled politics both internally in the United Kingdom and of its relationship with the European Union.

And so, to a significant (though not a total) extent, the United States was able to bring what it decided in 2016 to a formal and substantial end, the United Kingdom cannot similarly do so.

For the United Kingdom, 2016 is here to stay.

His ‘here to stay,’ and my ‘forever’ could be overstating the case. I feel sure that the United Kingdom, in some form, or at least parts of it, will join the European Union again one day. How far away that day is, and what form the accession country or countries of the time will have, we can only learn by living through it. It will be more than another four years, that’s for sure.

  1. As he loves to do. It would be hard to find one of his posts without the word ‘aver’ in it. I think they get inserted by automatic operation of law.

    He also loves a long title: ‘The United States had its cathartic post-2016, post-Trump ceremonial moment – but the United Kingdom cannot have a similar post-2016, post-Brexit moment’. 

Dave Winer asks:

What’s “neo” about neo-Nazis? Why not just call them Nazis? I’ve asked this question a bunch of times, over many years, never heard a satisfactory answer.

I’ve always thought it was just to distinguish from the original Nazis, the ones in Germany in the 30s and 40s.