LONDON (HedgeWorld.com)–Short-selling by hedge funds is the last place long-only managers should be placing blame for the downturn in the equity markets.
In a July research report titled, “Peaches, lemons and sour grapes,” UBS Warburg’s global equity research group asserts that the bigger players in the market are to blame for the significant equity market fall of recent months.
“We believe that attempts to pin the blame on hedge funds is less a case of intelligent comment and more a case of sour grapes,” the report reads.
With a used-car sales analogy, the research report’s authors described how a market might contain more ‘lemons’ rather than the more desirable ‘peaches’ and with that market comes a lower level of prices. The first market in which lemons were detectable was the burst of dot.com bubble, which was followed by a series of accounting frauds and untrustworthy company information scandals.