Porsche crashes into controversy in the ultimate 'short squeeze'

[Diver]

He's got you there BP

[BrilloPad]

Yes, and look how many replies you got compared to my thread. The difference is achieved by my witty comments in italics.

The point was that the short sellers will get their revenge - you can't buck the free market.

You certainly get alot of replies to your threads/comments. I dont think it is to do with italics - I think it is the intellectual quality and great economic insight of your posts.

[BrilloPad]

He's got you there BP

Yes - I have been out-witted by atw. Not a suprise as he is such an intellectual with great economic insight.....

[BrilloPad]

http://forums.contractoruk.com/670853-post6.html

[AtW]

The point was that the short sellers will get their revenge - you can't buck the free market.

It's not free market, it's market manipulation - hedge funds gang bang on selected companies to cause serious damage - if share price tanks then loans taken with share price being collaterals can be called in and this can cause at best increase interest rates paid by the company or at worst can collapse it like it happened to some companies who were not necesserily the worst, they just were target for the hedge funds. Their actions in my view are illegal as they are designed to illegally manipulate markets - in any case their actions have no economic sense, they don't help companies develop new products or whatever, they just help a handful of scammers get rich at the expense of long term investors who get raped with completely unexpected margin calls.

In terms of revenge I think you totally misread current situation - hedge funds are going to get it from double barrels, they are likely to be made scapegoats for things that were also done by banks, in this case however hedge funds will deservedly get thrashed and I think their concept will be completely wiped out for a long time. Now that would be good for free market.

[BrilloPad]

It's not free market, it's market manipulation - hedge funds gang bang on selected companies to cause serious damage - if share price tanks then loans taken with share price being collaterals can be called in and this can cause at best increase interest rates paid by the company or at worst can collapse it like it happened to some companies who were not necesserily the worst, they just were target for the hedge funds. Their actions in my view are illegal as they are designed to illegally manipulate markets - in any case their actions have no economic sense, they don't help companies develop new products or whatever, they just help a handful of scammers get rich at the expense of long term investors who get raped with completely unexpected margin calls.

In terms of revenge I think you totally misread current situation - hedge funds are going to get it from double barrels, they are likely to be made scapegoats for things that were also done by banks, in this case however hedge funds will deservedly get thrashed and I think their concept will be completely wiped out for a long time. Now that would be good for free market.

In fact they basically smooth the market out. Recently short selling of banks banned - a quick rise then they drop again. The fundamentals were against them.

Though you cant see it financial markets help to provide finance(doh!) and liquidity. You need both.

In the case of Porsche the issue was LACK of a free market - there was not full disclosure.

I look upon hedge funds as small merchant banks.

Yet I am actually with you in terms that there are too many hedge funds - the market is sorting them out now.

What I dont want to see is your communist state where we would all be poor. I suppose you think we would all be equal so its fine.....

[AtW]

In fact they basically smooth the market out.

What's the economic sense of shares and stock market? It's to allow companies raise money for products and services and people/companies to invest into something that will generate dividends and/or share value increases.

Hedge funds are not investing to get dividends or share value - they fook others over without even having shares in the first place or even money to do it - they got fook all cash, they highly leverage whatever little they have and then look around how to fook people out of their money, that's their business model. I don't see how this model contributes anything whatosever to economic development.

In the case of Porsche the issue was LACK of a free market - there was not full disclosure.

Listen, if hedge funds deem that VW shares are overvalued they should not invest any money in them and go invest somewhere else. Just how hard is it? What they do instead they borrow shares to attack companies perceived by them as weak and somehow strangely enough it so happens that many hedge funds attack at the same time using leverages to multiply their effect and clearly (in my view) using naked shorting by selling shares they don't have! That's just gross - they basically manipulate market hoping that their leveraged punch and gang attack would ensure they walk away with profits from thin air. That's not right - the only profits that people should make from shares are in case of dividends or share value increases, it should not be possible at all to profit from share losses.

You can argue all you want for free market and all that bulltulip, but hedge funds specifically will get what they deserve very soon - I think 2009 is when it happens, if you work for a hedge fund in any capacity I suggest you start looking for a new job because there won't be much work for you soon.

[BrilloPad]

What's the economic sense of shares and stock market? It's to allow companies raise money for products and services and people/companies to invest into something that will generate dividends and/or share value increases.

Hedge funds are not investing to get dividends or share value - they fook others over without even having shares in the first place or even money to do it - they got fook all cash, they highly leverage whatever little they have and then look around how to fook people out of their money, that's their business model. I don't see how this model contributes anything whatosever to economic development.

And believe it or not sometimes people, having provided money, want to sell! The primary market would not exist without the secondary market. Hedge funds provide liquidity.

[AtW]

IWhat I dont want to see is your communist state where we would all be poor. I suppose you think we would all be equal so its fine.....

I am not advocating communist state. I am all for stock market, however the only profits people should make should be there from dividends or long term share value growth. This means anyone who makes money on buy/sell shares in the same day or week should not be able to make much money, such profits should be taxed big time, on the other hand tax should be very low or maybe non-existant for dividends and also for any capital gains if you hold shares for a long term, say over 1 years tax should be low, over 3-5 years it should be zero maybe. Is that communism? Not at all.

It is not communism to ensure that markets are not manipulated by people who don't even have the fooking money - look at those funds, they leverage whatever cash they have to obtain greater influence on the market, that's the key for them - they have to punch really hard to get someone down, their business model fundamentally is based on market manipulation and it should not be allowed - any big share sales or buys that can affect share price significantly should be controlled to avoid market manipulation. In any case large profits made from quick buy/sell of same shares should be taxed at rate that would make such activity unprofitable, maybe that would make those people invest long term in companies that can deliver value rather than fook over companies that got long term investors who were hoping to get dividends/share value.

[AtW]

And believe it or not sometimes people, having provided money, want to sell!

Fine, sell, but if you bought shares last week you should expect to pay 99% capital gains tax. If you had shares for long term then tax should be low.

Hedge funds don't provide liquidity - market makers should be doing that and hedge funds only appeared recently in big numbers, exchanges did pretty well without hedge funds being around thank you very much.

So, in short - hedge funds can take their liquidity and fook off to try this trick in China - once they try it once there maybe they'd be taught a lesson they'd never forget.