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The Hedges Get Trimmed
Just as I warned the readers of SurvivalBlog many months ago, hedge funds
are vulnerable to
rapid swings
in
interest
rates.
(My first warning was even before
the pair of Bear Stearns hedge funds collapsed in the summer of 2007.) As
the global liquidity crisis has expanded, other hedge funds
have started to collapse en masse.
Here is an article is from England that is
indicative of what is happening globally. (This is a global collapse, because
again,
as I warned, the current liquidity crisis is global in scale.) Hedge
fund legends hit by financial crisis.
And here is an article from the American perspective: Debt Reckoning: U.S.
Receives a Margin Call
With leverage ratios that average 26-to-1, hedge funds are very vulnerable to
margin calls.
Check out this
video clip on the hit to the finance houses, and this
one on the plight of
the hedge
funds.
The
Insider told me he expects that the majority of
publicly-traded US hedge funds may be
out
of
business
by
the end of 2008. Seventy down, 6,850 to go.
