Uh-Oh

You know about short selling?

The nickel tour is that it is a way to bet against an asset, and you make money if it falls in value.

Well, short selling has hit a 7 year low. In fact it hit the lowest level since the Lehman Brothers implosion that initiated the financial crisis:

Hedge funds have sharply scaled back their bearish bets that the value of stocks is about to fall, with the proportion of shares earmarked for short selling at its lowest level since before the financial crisis despite warnings of renewed market exuberance.
The percentage of stocks that have been borrowed by short sellers – who try to profit from a company’s share price falling – has dropped to the lowest level in the US, UK and the rest of Europe since the years before the collapse of Lehman Brothers, according to data compiled for the Financial Times by Markit.

The fall in short selling comes as Wall Street and markets in Europe trade at near record and multiyear highs, indicating that while some high profile hedge fund managers have warned of excessive market euphoria the industry is still unwilling to bet against the rally.

Put your cash in something safe and liquid, because we are in for a bumpy ride.