Now, we have all seen the credit crunch send markets spiralling downwards, driving pension pots down and peoples investments portfolio! Some of the blame can be placed at the door of the hedge funds who just buy and sell shares. OR, more specifically, the short-selling of shares. Short selling is borrowing shares, selling them, and then buying them back when the price falls, giving them back, and pocketing the difference. So it is in their interest for stock markets to plummet.
This was their plan with VW this week. A company who's stocks where expected to sink as the car industry marks a decline. However, as the hedge funds began to borrow and sell shares, there cam a quick realisation. There was not enough shares to go around! Forcing the prices of VW to bounce up! 348%! Briefly making it the largest company in the world!
This massive jump has led to hedge funds totting up losses of £18,000,000,000!
Could not have happened to a nicer bunch of people...
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