-- The three largest U.S. public pension funds decided to stop lending Morgan Stanley and Goldman Sachs Group Inc. stock to short sellers after the shares plunged because of a crisis of confidence in the securities firms.
The California Public Employees' Retirement System, the largest U.S. pension, and the New York State Common Fund decided to stop making the stock available to those seeking to profit when the shares drop. Their decision came after the California State Teachers' Retirement System halted the practice yesterday and called on 60 other investment managers to follow its lead.
``This speculative selling has put downward pressure on the entire stock market and threatens to drive our national economy deeper into decline,'' New York State Comptroller Thomas DiNapoli said in a statement. ``By removing some of the fuel that is feeding this speculative fire, my action is intended to bring stability and rationality back to our equity markets.''