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POPSHedge Fund's Trade Secrets In Manipulating The Global Stock Markets 
- have been savaged far more than Wall Street's errant financiers even though they have yet to write off a single extra cent in bad debt since the credit crisis hit last year. At the moment, they are simply making prudent and relatively tiny provisions in case anything does go wrong. The ASX financial index has been slashed by 30.3 per cent since November 1. But on Wall Street, the cause of the problems, the Dow Jones banking index has fallen just 21 per cent. How could that possibly be? The answer is that the traders have found a chink in Australia's regulatory armour. The hedge funds have found a way to manipulate the market through a process known as short selling. This is where traders sell stocks if they think the share price will fall in the future. Then they buy them back at a lower price later on. It is perfectly legal and even encouraged as it can add liquidity to markets. In recent years, however, the practice has become more sophisticated and incredibly complex.
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