This shrug, believe it or not, is crochet. It was made with the help of a nifty little gadget called a Crazy-Daisy Winder.
The one in the picture is the genuine article from the 1940s, but Boye sells a modern one called a Bloom Loom. With the looms, you can make little flowers out of yarn, ribbon, or raffia, which can then be crocheted together into a number of projects, such as the Daisy Cover-Up.
UPDATE: See this tutorial on how to make the daisies.
Pattern originally designed by Bernhard Ulmann Co, Inc (now in the public domain).
Size: One size fits most.
525 yd worsted-weight yarn
Size G-6 (4.0mm) crochet hook
Crazy-Daisy Winder or Bloom Loom
Gauge: 1 finished daisy = 2 inches
Use winder or loom instructions to make 104 daisies with 12 double petals and 8 daisies with 12 single petals (to be folded in half and used as half daisies).
Joining the Daisies
Join yarn with sl st under both loops of a petal, inserting hook from right side of daisy, with care not to twist the petals.
Row 1 (Lower Edge). Ch 1; sc in same petal as joining, *ch 3, sc in next petal;* rep from * to * 6 times. **Sc in petal of a new daisy, remove loop from hook, insert hook in sc in 7th petal of first daisy and back in loop that was removed, draw loop through sc; rep from * to * 6 times, then rep from ** until there are 12 daisies in the row. Do not finish off. To finish the "free" petals of the daisies on the other side of the row, ch 3, sc in 9th petal of last daisy, *ch 3, sc in next petal; rep from * twice, ch 3, sc in joining st between last daisy and the next daisy, ch 3, sc in 9th petal of next daisy; continue in this way across all free petals. Sl st in first sc of first daisy. Finish off.
Daisies are joined from left to right. Join with sl st in petal of new daisy.
Row 2. Sc in same petal as joining, ch 3, sc in next petal, ch 3, sc in 3rd petal, remove loop from hook and draw through sc in 2nd petal to the left of joining st between first 2 daisies of last row, *ch 3, sc in 4th petal, remove loop from hook and join to next petal in row below, ch 3, sc in 5th petal, join to first petal of next daisy after joining st in row below, ch 3, sc in 6th petal, join to next petal in row below, ch 3, sc in 7th petal of last daisy, ch 3, sc in 3rd petal of new daisy, join to next petal of row below.* Rep from * to * until there are 11 daisies in this row. Finish the "free" petals of the daisies as in Row 1.
Join with sl st in petal of new daisy.
Row 3. Sc in petal of new daisy, *ch 3, sc in next petal; rep from * 3 times, remove loop from hook and draw through sc in 4th petal to the left of joining st between first 2 daisies in previous row, ch 3, sc in 6th petal, join to next petal in row below, ch 3, sc in 7th petal, ch 3, sc in 8th petal. Continue joining as before until there are 12 daisies in this row. Finish the "free" petals of the daisies as in Row 1.
Rows 4-9. Rep rows 2 & 3.
Fold a single petal daisy in half so that there are 6 double petals. With folded edge toward outer edge of short side, join first double petal to the 12th petal of first daisy in 1st row, ch 3, sc in next petal, join to 11th petal of first daisy; join next 2 petals to first 2 petals of first daisy in 2nd row; join 5th and 6th petals to 3rd and 4th petals of first daisy in 3rd row. Finish off. Fill in remaining spaces at side edges in the same manner.
Cuffs - make 2.
Row 1. Sc in 2nd ch from hook and ea rem ch across. 10 sc.
Row 2. Ch 1; turn. Sc in first sc, sc in blo of next 8 sc, sc in last sc.
Rows 3-52. Rep Row 2.
Gather in side edges and sew to cuffs. Sew seam of cuff and continue sewing seam together up side edge of first few daisies at each side to form sleeve. Weave in all ends.
blo back loops only
sc single crochet
sl st slip stitch