Got the Bug

The way panicked traders have responded to the global financial crisis is partly just human nature, we keep being told. On the evidence of what has happened with Volkswagen over the past few days, human beings must be a bunch of prats.

Hedge fund traders began short-selling VW shares on Monday, having assumed they could make a fast buck but without counting on Porsche's decision on Sunday to hoover up the majority of the shares in the firm, leaving the traders buying from a much smaller pool with no chance of quick gains. That no-one saw this coming is staggering. The frenzy briefly made VW the world's largest company yesterday.

It reminds me of the climactic scene of Trading Places where Dan Ackroyd and Eddie Murphy corner the market in frozen concentrated orange juice.

Reputation management has never really been at the core of traders' activities. Just as well, as putting a positive spin on a £13 billion scholboy error in the midst of crisis is something of a challenge.

Perhaps though there is an opportunity for basement stocks wanting a quick valuation boost to prey on the idiocy of short-sighted short-sellers?