This Volkswagen thing is getting serious.
The Wall Street Journal is running a piece now challenging the credibility of German regulators in the incident, intimating that the huge spike in Volkswagen shares was the result of some regulatory failure. That's the other shoe dropping right there. Shares drop 50%, it's a regulatory failure. Shares spike 400%, its a regulatory failure. And, of course, the Wall Street Journal drops the nuclear bomb of regulatory justification. The incident might "enfeeble banks." To wit:
The repercussions may be more significant. Any major losses suffered by hedge funds which have scrambled to cover short positions in VW at ever more exorbitant prices could end up enfeebling counterparty banks, already hard hit by the credit crunch.
When are we going to let risk be risk? These are all big boys playing with Volkswagen. Had it gone right, they would have made big profits.
Germany's Crash-Test Dummy [The Wall Street Journal]
Posted by guest , Oct 29, 2008 12:55PM
someone had some friends over at greenlight
Posted by guest , Oct 29, 2008 12:56PM
If it was easy, Enron would still be in business.
Posted by guest , Oct 29, 2008 12:56PM
Scheisse!
Fo Shizzle
Posted by guest , Oct 29, 2008 1:01PM
this is awesome. they didn't judge risk/reward in going short on VW now...they're big boys it's part of the game
Posted by guest , Oct 29, 2008 1:01PM
part of the game
Posted by guest , Oct 29, 2008 1:01PM
Mahnahmahnah!
Posted by guest , Oct 29, 2008 1:03PM
fully agree with this article. if any fund seriously shorted VW based on the belief this was a sure thing, they deserve to lose.
someone said at FT alphaville "i don´t pay my fund 2+20 to have them lose money because they were outwitted by their car manufacturer."
Posted by guest , Oct 29, 2008 1:06PM
@4
I know that I have asked you nicely.
Please, please get back in your cage.
Posted by guest , Oct 29, 2008 1:06PM
serves them right. bitches.
Posted by guest , Oct 29, 2008 1:06PM
nicely said Bess bravo!!
Posted by guest , Oct 29, 2008 1:07PM
They were shorts. There was known to be an extremely small float of the stock. They should have at least considered the risk of a short squeeze. If they did, they knew the risk and got burned. If they didn't, they are stupid and deserve whatever comes to them. No regulatory failing, simple market forces.
Posted by guest , Oct 29, 2008 1:09PM
Farfegnugan
Posted by guest , Oct 29, 2008 1:10PM
@7: I read that. HFs deserve what they get in this case. They are all sooooo smart, the PMs, but the second they lose money they go crying about "bad regulators". You bet. You lost. Rip up your ticket and move on.
Posted by Anal_yst , Oct 29, 2008 1:20PM
@ 7
If their HF managers were driving VW's then chances are they're not much smarter than their car manufacturer, just sayin...
Posted by guest , Oct 29, 2008 1:21PM
Noted that certain quarters said prime objective was to bring down Deutsche bank..
Posted by MarshallStack , Oct 29, 2008 1:22PM
It's intramurals!
It's the fucking Special Olympics!
Everyone gets a medal just for competing.
Who is up for some broom hockey?
Everything is too big to fail - except your 401K, Joe 24 pack.
Posted by guest , Oct 29, 2008 1:25PM
@14
The implication is that they drive Porsches genius.
Posted by guest , Oct 29, 2008 1:28PM
Does this thing actually post? No wonder there are loads of double comments. You webbies don't know what you're doing..
Posted by HighYield , Oct 29, 2008 1:28PM
Pull up a chair you jabronies, I'm about to give you some valuable life lessons.
There's only one thing in this world worse than regulators - and that is German regulators. Have you ever partied with a German regulator? Well, I have... and their NUTS. Give them mad props though for having some bitchin' military helmets; who's with me? Even made Shultz look like a bas-ass, am I right? Back to the issue at hand...
Shorts need to eat it. It's a pretty tough game we're playing and if you show up not wearing a cup, I'LL be the first guy to deliberately kick you square in the marble bag - not because I think little of you, but because I care. Protect yourself before you wreck yourself, son... you need to step up your game.
Look at the bright side Turdly, you just took one for the team; a big, dry one. Now swallow hard and go walk around the block and take up smoking. I'll let you run some pink sheets for me when you get back... it's going to be OK.
Posted by StupidEquityGuy , Oct 29, 2008 1:32PM
As I was driving to work today, I was relaxing to the beautiful sound of German Engineering @ 7,200 RPMs as the triptronic hard slams into the next gear... (a stereo is basically nobs inside of the cockpit) I kept thinking to myself...
Einhorny should have just driven the expensive car and skipped the whole shorting the cheap car thing.
~SEG
Posted by MarshallStack , Oct 29, 2008 1:44PM
Chicks dig the Prius.
Posted by guest , Oct 29, 2008 1:51PM
Sounds like someone at the WSJ was short.
One. Thousand. Euro. Pay It.
Posted by guest , Oct 29, 2008 2:22PM
Too Farfigneugen, didn't read.
Posted by guest , Oct 29, 2008 2:23PM
Too Farfigneugen, didn't downshift.
Posted by guest , Oct 29, 2008 2:28PM
Pull a rabbit out of the hat, guys. (People actually give those guys money.)
Posted by guest , Oct 29, 2008 2:53PM
@14 Maybe the hedgies had a fleet of those short lived $90,000 VW Phaetons.
oop...did I say "short"?
Posted by guest , Oct 29, 2008 3:09PM
The Phaeton was a pretty cool car... Too bad it had a VW decal on it.
Posted by guest , Oct 29, 2008 3:16PM
Fukengroovin!!!
Posted by guest , Oct 30, 2008 1:07AM
@19
classic their/they're Freudian slip. Thanks for the cheap laugh.