[quote=NA,reply=3]Some areas of banking are nothing else than legalised robbery. A famous man once said so, cant remember who.[/quote
The Ballad of Pretty Boy Floyd
As through this life you ramble, you'll meet some funny men
Some rob you with a sixgun and some with a fountain pen.
The Boll Weevil Song
Farmer went to the banker, to get himself a note
Said "get out of here, you son of a bitch, there's a boll weevil on your coat"
Gonna take your home.
I can appreciate your empathy for this fellow and perhaps I was a bit rude, but selling short as this fellow did was a classic risky speculative play. He did not need anyone on Wall Street to teach him how it works either, and the bind he caught himself in does not seem to have much to do with the worldwide economic meltdown, regardless of who's ultimately to blame.
Here's what he did. He bet the price of Volkswagen shares was going to decline, so he "borrowed" shares (in other words, sold stock he didn't have) in the belief that the price would decline and he could meet his commitments to deliver for a lot less than he started at. But when Porsche turned out to have more shares than was generally known, the price went up, and he would have to buy shares at the market price to meet his obligations.
Selling short is probably the second oldest profession there is, and it's what clobbered a lot of people in 1929.
[Edited 2009-01-06 15:26:30]