Midnight In The Garden Of Good And Evil Part 2:

City Wolves, short-selling and the Church of England

Some readers may be excited by the fact that Tory donors have sold some equities short during the recent financial crisis. That may seem like a gift to Labour during these perilous times.

But this is a time for cool heads. Bear in mind that the last high-minded group to attack short-sellers - the Church of England - was revealed as hypocritical last week when it emerged that its own investment arm uses similar practices.

Not only does the church lend stocks to short-sellers but…I quote…

“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.”

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Church Of England Admits Profiting From Short Selling

The Church of England has admitted it may have profited from the controversial practice of short selling on the stock market just a day after it was condemned by The Archbishop of York.

By Richard Fletcher and Rowena Mason
Last Updated: 9:06AM BST 26 Sep 2008

Managers of the Church's £5 billion investment portfolio have lent shares for a fee. It is possible they were used by traders to make profits by betting that the value of the stocks will fall.

Such trading in the shares of financial companies has been temporarily banned by the Financial Services Authority after it was blamed for driving down the share price of Halifax Bank of Scotland, which came close to collapse before it was taken over by Lloyds TSB last week.

The Archbishop of York, Dr John Sentamu, described short sellers as "bank robbers and asset strippers" earlier this week, while the Archbishop of Canterbury, Dr Rowan Williams, condemned the "basic unreality" of the global trade in debts.

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