Hi Class,
The purpose of my extra credit page is to identify articles in the Wall Street Journal that support class material and document for your review:
- 1. Taken from Wall Street Journal, Friday, November 23, 2007, page C6 (couldn't find direct link from www.wsj.com so I typed out text)
The Long and Short of It
"Short" shares are borrowed and then sold in the hope that the share price will fall before the borrowed shares have to be purchased and replaced. A high level of short interest could indicate that a share price is ready to fall, but can also be a hedge, or counterbet, for an invester who has gone "long," or bought a lot of shares of a company thinking that the share price will rise.
*See A-to-Z listings of short-interest positions, plus the biggest positions, the biggest short ratios and more. All available free at WSJMarkets.com.
This explanation of long and short sales helped me better understand how a "high level of short interest" is correlated with a share and its potential price drop. -TT
- 2. Taken from Wall Street Journal online - http://online.wsj.com/article/SB119557390558299268.html
Libor Raised in Added Sign of Strain
This article discusses how the banks just recently raised the LIBOR to 5%. Last week, this was 4.87%. Article says that this raise means that banks as a whole are more cautious of borrowing from one another. -TT
- 3. Taken from Wall Street Journal online - http://online.wsj.com/article/SB119585897006002464.html
Hedge Funds: Leveraging the Numbers
Article discusses how hedge fund managers are including money that was borrowed within their reported assets to make them look larger/more attractive. -TT
