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]
someone had some friends over at greenlight
If it was easy, Enron would still be in business.
Scheisse!
Fo Shizzle
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
part of the game
Mahnahmahnah!
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.”
@4
I know that I have asked you nicely.
Please, please get back in your cage.
serves them right. bitches.
nicely said Bess bravo!!
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.
Farfegnugan
@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.
@ 7
If their HF managers were driving VW’s then chances are they’re not much smarter than their car manufacturer, just sayin…
Noted that certain quarters said prime objective was to bring down Deutsche bank..
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.
@14
The implication is that they drive Porsches genius.
Does this thing actually post? No wonder there are loads of double comments. You webbies don’t know what you’re doing..
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.
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
Chicks dig the Prius.
Sounds like someone at the WSJ was short.
One. Thousand. Euro. Pay It.
Too Farfigneugen, didn’t read.
Too Farfigneugen, didn’t downshift.
Pull a rabbit out of the hat, guys. (People actually give those guys money.)
@14 Maybe the hedgies had a fleet of those short lived $90,000 VW Phaetons.
oop…did I say “short”?
The Phaeton was a pretty cool car… Too bad it had a VW decal on it.
Fukengroovin!!!
@19
classic their/they’re Freudian slip. Thanks for the cheap laugh.