Short-sellers have the power to utterly crush Lehman Brothers, as they did Bear Stearns, writes James Cramer in New York, but it's largely Lehman's own fault. Lehman shares much of the "mismanagement, arrogance and recklessness" that brought down Bear, Cramer opines in a piece that says excoriating short-selling hedge funds for running down Lehman stock, and accusing them of manipulation, misses the point.
Lehman has no credible defense because it's been "hemorrhaging cash as it financed a horrid portfolio of toxic mortgage paper both from here and in Europe and doesn’t have a cent to retire stock; it’s too busy issuing more of the stuff." You can't stop money from either talking or walking, he writes; the best way to thwart the short-sellers is for firms to ensure they are honest and well-capitalized. Those will be the ones remaining when the market bounces back, and "the returns will come to those who bet with, not against, companies."