• Volkswagen AG today surpassed Toyota Motor Corp. to become the world's biggest automaker by market value as the shares benefit from hedge-fund trading strategies and the collapse of Lehman Brothers Holdings Inc.
• Volkswagen is up 84 percent in 2008 and surged as much as 55 percent today. Traders who shorted the shares on expectations they would decline on Porsche SE's bid for a majority stake were forced to close their positions, according to three people in the securities-lending business who declined to be identified. The failure of Lehman, which lent Volkswagen shares to short-sellers, probably helped trigger a so-called short-squeeze, they said.
• ``This is a popular, crowded short play that has caused the shares to become disconnected with the company's fundamentals,'' said Renaud Berenguier, who advises hedge funds on equity trading at Aurel BGC in Paris. ``You take one of the biggest prime- brokering lenders, and one of the most shorted stocks in Europe, and this is the result.''

It is dangerous out there right now - when normal mechanics mean nothing. It has been that way for a while now, but it is at extreme levels the past few weeks.

Amazing fact of the day

• The S&P 500 extended its 2008 tumble to 34 percent, while the Dow is down 31 percent. Both are poised for their worst yearly performances since 1937.