What Really Caused the Run on Bank Stocks? (Hint: It Was NOT the Shorts!) And a Short Rant on the Fed

Whenever things in the market start getting hammered, it’s popular to blame the short sellers…

Right now, in fact, there are even calls to ban short selling of banks because they’re an easy target. That’s ludicrous, of course, just as it proved to be after the Great Financial Crisis of 2008. The last thing anybody should want, in a free market, is something that gets in the way of the market dynamics.

Even Chris Cox, the head of the Securities and Exchange Commission who originally approved the short-selling ban, later told Congress that the ban was a mistake.

So, what was really causing bank stocks to get as hammered as they were last week... with the SPDR S&P Regional Banking Fund (KRE) losing roughly half its value since the Silicon Valley Bank failure?

Harold Bradley has a theory, and it’s not something anybody is talking about, even though it is hiding in plain sight.

I first met Harold back in 2010 after the market had been rocked by the so-called “flash crash.” I was working for CNB…