re: #306 Bagua

Not exactly but on the right track, it was more the rumours that took Bear Sterns down, the redemption and the Fair Valuations.

Shorts are just losing trades when the underlying goes up or stays level, they can’t actually “force” anything down in a normal, liquid market; the CDO/CDS market on the other hand, became illiquid.

Bear also went down because two of its largest accounts withdrew. Whether that was a rumor started by the shorts or whether those accounts were actually transferred to another institution, I’m not sure. But that started the “run on the bank”. I agree that simply shorting can’t take a strong company down but the combo of the rumors, the trading in the company’s debt, and the {probably} naked shorting did a lot of damage. Plus, what was Bear’s business model anyway? They were getting a majority of their revenues from trading in the mortage backed securities.