Short selling by hedge funds is in vogue right now, which has made borrowing stock--already something of a weird area on Wall Street--harder than ever. One consequence, as AllAboutAlpha.com notes, is that borrow fees set by prime brokers have really soared. Lendable small cap stocks have been in short supply for a while, but now even blue chip stocks seem to be more scarce. By one measure, the borrow fee for such stocks has doubled over the last year or so. The big winners are the prime brokers, especially those who have carved out a name in this area, notably Citigroup. You have to wonder if pensions and other institutions with lots of long positions are thinking about how they might capture a slice of this revenue pie.  

For more:
- here's the AllAboutAlpha.com article

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