I Protest!
Do I Have to Become a Chartist?

Plus ca Change...

  • The Harlem Corner of 1864: Daniel Drew once again struggled with Cornelius Vanderbilt, speculating on the stock of the Harlem Railroad. Drew was selling the stock short, but Vanderbilt and his associates bought every share he sold, ultimately causing the stock price to rise from 90 to 285 in five months. Drew lost $500,000.

  • The Northern Pacific Corner of 1901.

  • The Porsche-VW Corner of 2008: Richard Milne in London: Volkswagen’s shares more than doubled on Monday after Porsche moved to cement its control of Europe’s biggest carmaker and hedge funds, rushing to cover short positions, were forced to buy stock from a shrinking pool of shares in free float. VW shares rose 147 per cent after Porsche unexpectedly disclosed that through the use of derivatives it had increased its stake in VW from 35 to 74.1 per cent, sparking outcry.... [T]he sudden disclosure meant there was a free float of only 5.8 per cent – the state of Lower Saxony owns 20.1 per cent – sparking panic among hedge funds. Many had bet on VW’s share price falling and the rise on Monday led to estimated losses among them of €10bn-€15bn.... “This was supposed to be a very low-risk trade and it’s a nuclear bomb which has gone off in people’s faces,” said one hedge fund manager. As of last Thursday, according to consultancy Data Explorers, 12.9 per cent of VW’s shares were on loan for investors to go short and bet on them falling – the highest percentage of any German company.

Those who do not remember their history...