From an article in today's FT headed "Church accused of hypocrisy after archbishops' attack on short selling"...
Hedge funds pointed to the willingness of the church commissioners to lend foreign stock from their £5.5bn ($10.2bn) of investments - an essential support for short selling - and derided the [two archbishops] for not understanding shorting. "They are trying to shoot the messenger and . . . deflecting attention away from the dramatic incompetence of bank executives," said Hugh Hendry, of hedge fund Eclectica Asset Management. "Short selling is the pursuit of truth." ...
As well as aiding shorting by lending stock, the church commissioners had £13m invested in Man Group, the biggest listed hedge fund manager, at the end of last year. The commissioners also sold a £135m mortgage portfolio last year, says their annual report, despite Dr Williams' criticism of trading debts for profit. Through the Church of England pensions board, which manages another £847m, the church invested this year in a fund from Auriel Capital, a London hedge fund, which aims to make money from currency trading - including short selling currencies.
And their excuses are the best bit ...
Andrew Brown, secretary to the commissioners, said they did not invest in Man's products, only its shares, and none of their managers used shorting. "We can assure you that the commissioners' stocks have not been used to facilitate the shorting of financially vulnerable institutions in the US and UK, including HBOS," he said. "Nor will this happen."
Ahem. That's like saying "Although we invest in arms manufacturers we do not buy weapons. We used to be involved in shorting financial stocks, but we stopped doing it recently once public opinion turned against, although we still short other non-financial stocks. And we're not going to short sell financial institutions any more because it's illegal now."
Are you all set?
4 hours ago
4 comments:
I always thought the definition of hypocrisy was 'to have and follow a religion'
Religious leaders hypocrites after being exposed for being on the make? You don't say!
Compared to their bread-and-butter Afterlife Insurance scam, it's hardly a big deal.
Nick
"We can assure you that the commissioners' stocks have not been used to facilitate the shorting of financially vulnerable institutions in the US and UK, including HBOS,"
This is true because according to stats only between 3% and 8% of HBOS shares were out on loan. Therefore almost nobody shorted HBOS shares.
When gordon brown grabbed the credit for banning short selling he was relying on the fact that very few people are at all familiar with market processes and so the chance of his bluff being called was low.
For it to by hypocrisy, both Williams and Sentamu would have had to have had the foggiest notion of what they were talking about, and to have known they were doing those trades while castigating everyone else.
What this episode shows is that neither of them, despite being the CEO and 2ic, had bothered to read their own 2007 report and accounts (which are clear and written for a general audience) or asked a grown-up to explain the big words before flapping their gums.
Hypocrisy would be a promotion; what we've got here is negligence and incompetence.
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