German tycoon Adolf Merckle commits suicide (lost 400m Euros from VW debacle)

Reuters ^ | 01/06/09

[TigerLikesRooster]

German tycoon Adolf Merckle commits suicide

25 mins ago

FRANKFURT (Reuters) – German billionaire Adolf Merckle, assailed by financial turmoil and struggling to salvage his business empire, has killed himself, his family said on Tuesday.

"The desperate situation of his companies caused by the financial crisis, the uncertainties of the last few weeks and his powerlessness to act, have broken the passionate family entrepreneur and he took his own life," a family statement said.

Prosecutors in the southern German town of Ulm, near Merckle's home, said the 74-year-old died when a train struck him late on Monday. There was no sign anyone else was involved, they said.

/snip

Banking sources had told Reuters the family lost hundreds of millions of euros on investments, with losses of about 400 million euros ($539.4 million) on Volkswagen shares alone.

[monday]

“So true. There’s a famous saying from Ethic of Our Fathers that says “Increase possessions, increase worry”. This is an extreme example of how true that ancient statement is.”

While this may be true for billionaires, to suggest that people who are financially secure have more worries than people who live paycheck to paycheck is absurd.

[monkeyshine]

Full article said he made “wrong way bets on VW” so I presume that means he was short. I can understand shorting but it is so easily susceptible to sudden and immediate loss (not to mention collusion) someone of his stature and sophistication should have had a hedge or exit plan.

In total something like $10 billion was lost by people shorting VW. Porsche put the screws to them big time. In the US the market is so full of naked short shares that an equivalent short squeeze is nearly impossible these days (though was possible in the past, today the market makers are given exemptions and can literally create long shares out of thin air, and while they are supposed to be regulated the SEC has been asleep for at least a decade). The German market is much more controlled and regulated.

[conservatism_IS_compassion]

millions of people live on the equivalent of $1 a day. I

But enough about Obama's half-brother in Kenya . . .

[PAR35]

When I first saw the story, I wondered if he had help.

[hunter75]

Yes, but when he died he was still worth 9.2 BILLION. I have friends (long story) who are only worth 6 billion and somehow they manage to get by on vast estates in Denmark, Ireland, France, England and Australia, and to take 100 friends in a jet for a birthday party in Thailand is like you or me taking the wife to KFC.

The Merckle story makes me feel very grateful that when my wife and I peeked (through our fingers) at our latest 401K statement, my wife just put her arms around me and said “What matters?”

Maybe Merckle didn’t have anybody to put their arms around him.