Trouble's my name, and Shorting's my game.

Knowing that something is not working, at least not for the general good, is not the same thing as being able to remove the particular evil in the interest of the general good.

Here is Exhibit A: short-selling around the world by mammoth hedge funds.

In our hearts and in our minds, we Americans have come to realize, all too slowly, that so-called hedge funds are to economic stability what a new computer virus is to the health of your hard-drive, or a hurricane to a poorly-diked city.

To explain: A hedge fund is an investment colossus that can move many millions and sometimes even a billion or two into an economy, or into a financial sector, and make money by betting that things will get worse--that prices will fall, that a currency's value will weaken and that investors will panic.

Its distinctive trading tool is the massive short bet: the wager that a set of stocks or a given currency will lose value over the very short run.

Like a plague of locusts, short-selling hedge funds can even prey on healthy expanses of companies and countries and add to their woes virtually overnight because of their massive evil size, because (thanks to Internet technology) of their ability to strike instantaneously, and of their capacity for parachuting in and out of negative investments with lightening speed.

Informed, savvy (and in some cases scarred) Asians have been onto the vile Western hedge-fund, short-selling game for more than a decade. The smart brains--in Indonesia, Thailand and Hong Kong, especially--even today attribute the near-death experience of the Asian Financial Crisis (1997-99) in some measure to Western hedge funds that made bad economic and financial situations in Asia worse by betting that they would in fact get worse ... which they then did, in part because of all the negative bets by the West.

Pessimistic Prophecy

They think that hedge funds can create a self-fulfilling prophecy by encouraging panic and pessimism, and then rake in the fruits of their misery.

Donald Tsang, now the cerebral leader of Hong Kong, explained the reality to me a decade ago that short-betting hedge funds were not only a danger to a troubled economy but even to those that were otherwise sound and healthy.

Acting mostly alone but also, at times, together, many Asian countries have since have worked to fertilize their economies, develop early-warning signs, and selectively stick poison-pills in their economic soil to make life much riskier for the hedge ("trouble is my game") fund.

Now, increasingly, the biggest and most grandiose economy in the world is starting to look and sound more Asian than American on the hedge-fund, short-selling issue.

For none other than the magisterial U.S. Security and Exchange Commission has put into place, just this week, new rules to make the short-selling of certain bank and financial stocks more difficult.

These moves are to be applauded.

Their central aim is to slow down the fiendish rapidity of rapacious short-selling that puts money into the pockets of amoral speculation while adding to the general economic turmoil of the American economy. But the SEC actions, while historic, are limited to targeting only the illegal side of short-selling.

This dark side of the moon is a bit complicated to simplify, but is perhaps best explained as playing around with shares in stocks that you actually don't possess. The great academic John Coffee, security-laws professor at Columbia Law School, has famously dubbed such shady transactions as "naked" short-selling.

Stock Manipulation

The practice, which is strictly speaking illegal, can amount to stock and currency manipulation on a titanic scale. But until the action of the SEC this past week, "naked shorting" was nothing less than the most ongoing, least-regulated financial orgy taking place in the darkest recesses of the financial world.

The new controversy in America pits the U.S. banking industry--now feeling a bit of what it is like to be an Asian economy about 10 years ago--against serious sluggers in the U.S. investment community. The theoretical economic argument against the new SEC rules amounts to the now-familiar religious reaffirmation of "the magic of the marketplace."

But the marketplace loses a lot of magic when greed operates in the dark for private gain at public expense. Stable economies are a necessary condition towards peace and prosperity.

Hedge-fund short-selling, operating at a level as esoteric to be, at times, undetectable until it is too late, is the great economic Satan of our time.

It may have taken Americans 10 years to figure out what Asians already knew, but the consensus is growing: Hedge-funds can bring misery. They can be big trouble.

Syndicated columnist Tom Plate is a veteran journalist. His admirers credit him for writing the first U S. column on the Asian financial crisis, back in 1997.