The CNBC screen flashed with massive losses of hedge funds. 18% down, 14% down, 20% down.....
It appears Dr. Doom is batting 1000 for he just predicted the hedge funds would be next to collapse.
While they are blaming a ban on short selling, one foreboding issue pops up:
Some pension funds and endowments that have relied on hedge funds for a stable, higher-than-average source of investment returns have been watching the unfolding trouble with alarm
The Independent has the scoop:
Redemptions means people are saying give me my money, I want out!
Hedge funds could have an unprecedented level of cash pulled out by investors this quarter, according to insiders, just as they faced millions of pounds of losses from last week's shock regulation of short selling. It has been a tough year for the industry with high-profile funds blowing up, clients increasing redemptions, as well as public fury over short selling and increased threats of regulation
Hedge Fund Implode O' Meter tracks the latest.
Calculated Risk has a good post on this.
Hedge Fund Collapse
Anyone recall these 4 letters: LTCM ? If you do, you’ll remember they stood for Long-Term Capital Management. And I said stood because they no longer exist due to their over exposure in foreign bonds. I think we might see a repeat amongst the hedgers who loaded up on those depressed financials which seemed like a great buy last week. I’ve been hearing a lot of people commenting on the same thing Robert.. people are withdrawing funds everywhere, why? They’re scare, confused, not sure what to do. Most people depend on their broker or IA, and when they can’t give answers, or give the same answer “the market’s going through a rough patch” we start seeing increasing redemptions. Maybe the fed didn’t think this one all the way through... I’ve been eyeing a few mining prospects for investing, and I came across a 17 part series on valuing mining companies, and though I’ve only read the first 3 so far I’ve learned a ton. I believe the link was http://www.stockresearchportalblog.com/