This paper examines the relationship between short selling in the equity market and corporate bond returns. We show that both shorting activity and size of short trades are inversely correlated with contemporaneous bond returns. In addition, firms with heavily shorted shares or large short trade...

This paper analyzes changes in US equity values around the 2004 presidential election. At 4:00 PM on November 2, trading in George Bush's victory contract on Tradesports.com implied a probable defeat; early November 3, Bush was the winner. Because no other important event occurred in that...