Private equity vs. the shorts

It's odd that short-selling is so popular all of a sudden. Short interest on the NYSE topped 3 percent of shares in May. That's the highest level since 1931. It's gotten so competitive that just finding the shares to borrow is proving very difficult. Some might read this as a classic bull sign. They might be right. Another way to see this is as a sign of a classic bull-bear battle. In this case, according to Business Week Online, the battle pits the many shorts, including individual traders, against many private equity funds out there. My guess is that shorts will end up covering soon enough. Most pure short-sellers have been driven out already. Private equity may push out the fashionable shorts. There will be a market top at some point, which will make some short sellers look good--the ones that survive to that point anyway.  

For more:
- here's the article from Business Week Online