The most criminally ingenious short squeeze in history, engineered by those cunning Germans at Porsche.
Fortunate for them that they’re a “car company.” If a hedge fund had tried to pull that in Germany, the managers, the PMs, the traders, the analysts, the back office IT, and everybody else in the same building would have already been packed off to the gas chambers by now.
Since hedge funds are “bad,” and Hank Paulson is “out to kill the bad HFs and regulate the rest,” David Einhorn can be allowed to squirm in his final moments, instead, as he chokes on a large short position.
All the prime broker intermediaries (GS, MS, Soc Gen, etc) will be repaid the difference in money printed at Treasury, so at the end of the day, what do they care, whether they were caught on the wrong side or not?
GS told us to post 500 percent margin today to keep our VW short position.
(We posted it.)
It was a small position, luckily.