The Wall Street Journal wrote that “Wall Street's best-known bear is going into hibernation” after short seller Jim Chanos announced he would close his main hedge funds late last year, in part due to diminishing interest in stock picking. Short selling, which bets on drops in asset prices, wins when companies and governments fail and has gained a predatory reputation over the years. Just last week, the China Securities Regulatory Commission announced new measures to limit short selling.

On this episode of the Capitalisn’t podcast, hosts Luigi Zingales and Bethany McLean sit down with Chanos to discuss the relationship between short sellers and our information environment, the fallout from the “meme stock” craze, the effects of the Federal Reserve’s interest rate policies, and how short selling can contribute to market efficiency and resilience. Do short sellers play a positive role by uncovering corporate fraud, mismanagement, and systemic risks? What safeguards are necessary to prevent short-selling abuse and ensure fair and transparent markets?

More from Chicago Booth Review

More from Chicago Booth

Your Privacy
We want to demonstrate our commitment to your privacy. Please review Chicago Booth's privacy notice, which provides information explaining how and why we collect particular information when you visit our website.