Tuesday, October 28, 2008

The Volkswagen rally!

Volkswagen has been mowing down hedge fund managers who illegally shorted this number, and also those charlatans who pretended that they actually had a locate. Porsche, which controls 74% of Volkswagen has a market cap under $10 billion, while Volkswagen's market cap exceeded Exxon's today, approaching $350 billion!

The stock doubled yesterday, and almost doubled again today. Morgan Stanley and Goldman Sachs were attacked by the shorts, on the story they were short Volkswagen, and the short crowd attacked them, until the Plunge Protection Team stepped in, and brought these stocks up in the face of those leaning on them. They had help after they both came out saying their exposure to Volkswagen wasn't material.

But when Volkswagen can move such huge moves, it means that some of these so called smart money shorts are now bust. With the government all in, shorting is like fighting baseball and apple pie, even if you have to wait out the rain.

When leverage becomes reduced, and positions turn against you, you get bought in, when the shorting rules are enforced. And it looks like Volkswagen's stock price, may have bought in some shorts who were using the same technique of naked and nefarious shorting to break companies. Now, instead, a stock broke them! And it was a VW bus that mowed them down!

Poetic Wall Street justice!

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