Short Sellers to blame for this inverse bubble

OK a little background first. I exited the market in February of 2008 seeing the housing bubble starting to burst and I could see the blood bath on the horizon. I had taken it on the chin once with the Internet bubble in the late 90's and I was not going to be taken again. Well as I sit and watch the S&P and the Dow fall each day I would buy in a little at a time. Mind you most of my money is still in cash. Looking for "best of breed" stocks to buy on the dirt cheap since my retirement is at least 30 years away and hold them for the rebound that hopefully will follow.

After reading this article on GE options I had an epiphany! The new bubble is not gold or government bonds the new bubble is happening right now and has been since September of 2008. It's an inverse bubble. One were short sellers (or double or triple shorters for that matter) are making a killing killing companies. They started with banks and the auto industry, granted they had it coming, but now they are setting their sites on good companies. They won't stop the short rampage until the stock has lost every last cent of value. Then these stocks will have to require some serious triage. By then the shorters will have moved on to something else.

Who are these people? I am sure that there are a lot of private investors that are doing this but how about the hedge funds? They were the ones responsible for the commodities bubble that we saw last year. they $145 a barrel oil that killed you at the pump in 2008. As soon at the hedge funds were hit with a mountain of investor redemption's the prices of commodities dropped like well a financial stock! The hedge funds needed cash and they needed it now. They were forced to start selling stock to cover the redemption's, not only that but they asset backed securities and the commodities that they were cornering were worthless. They needed to start making money again. With the negative sentiment and the drops that the stocks were taking because of this wave of redemption's why not make money on your pain? By shorting the stocks that they just sold and forced the price down on in the first place they could make back the money they lost selling the stock lower in the first place.

Now that they fear chum was in the market and everyone is expecting the price of stocks to decline they could run rampant shorting stocks and forcing giants of industry to their financial knees. Names like GE, Alcoa, DOW, DD and the list goes on and on. Sure these companies have debt and GE has negative exposure to capital markets. But I believe, and this is my opinion that has served me well and saved my entire 401K, that most of the losses that other stocks that aren't financials or autos have been targeted by short sellers and are suffering because of them and not because of fair market conditions.

If I am right then the indexes are going lower, much lower. I also get to buy really good companies really cheap. But I am going to have to wait until they are all under $2 a share which it looks like many will hit soon.