According to the FT, hedge funds bled out another $150 billion in assets in December. The paper reports "The size of the once lucrative industry has almost halved in the past year, to $1,000bn under management, according to data from TrimTabs Investment Research and Barclay Hedge."
That may be hard on the hedge funds and hard on the investors who took out much less money from the funds than they put in. It is harder on the stock market.
Both hedge funds and mutual funds have faced tens of billions of dollars in lost assets. Part of that is due to the market drop and part is due to investors who want to take their money and put it under their beds. But, for every redemption in equity funds, there is likely to be a sale of stocks from that fund. The selling, which seems to be accelerating, puts more downward pressure on the overall markets.
Many small investors have believed that hedge funds have an unfair edge. They have sophisticated traders and legions of analysts. The little guy with nothing but the stock tables can't keep up. Now the hedge funds are undermining that little guy again. They are selling into a market he keeps hoping will recover.
Douglas A. McIntyre is an editor at 24/7 Wall St.











Reader Comments (Page 1 of 1)
1-15-2009 @ 1:06PM
davidcarver said...
your right have a profit inthe stocks one is sgr they almost killed it and now its 1/4back. they make every go down more than it should.print alist of the ones they are selling and people will buy long term.
1-15-2009 @ 12:41PM
BHarrison said...
The problem "in a nut shell" is that the LACK of INTEGRITY is killing the markets. "The people" have finally realized how manipulated and corrupt the stock markets really are.
There is a pervasive lack of confidence and faith in the financial reports of almost ANY company . . . "off-the-books" 'assets' than are not shown on the balnace sheets are pure and simple FRAUD. There is NO INTEGRITY in the FIs, the corporations, or the markets.
It is unbelieveable that CEOs, CFOs, and uppermanagment who have been paid TENS and HUNDREDS of Millions in salries, bonuses, and other compensations, don't know what the real value of these firms and markets are? Come on, they are just not disclsing the information for fear of being prosecuted and sent to prison . . . and Congress is allowing this to continue on while they are pumping BILLIONS of dollars into these firms to bail THEM out.
We have truly become a nation being led by corrupt businessmen and politicians.
And the American people sit back and apathetically 'do nothing" about any of it. They continue to re-elect the corrupt politicians who sold out to the special interests and created the economic melt downs.
The only REAL solution is for Congress to draft and pass prudent and reasonable legislation for regulation and oversight of the FIs, the corporations, and the markets to ensure the INTEGRITY (honesty and adherence to good business and accounting principles), then let the REGULATED Free Market Economy settle out the economic chaos.
The economy HAS to bottom out to clean out the "trash", and then, once integrity has been restored, people may begin to invest in those enterprises to appear to be sound. Otherwise, no prudent, reasonable or half way intelligent person is going to invest in a declining, manipulated and/or corrupt markets or corporations.
There simpy are no "quick fixes" to all of this; and a lot (MILLIONS) of people/ families are going to be severely hurt . . . but that is all enivitable and unavoidable at this point. Meanwhile Congress has not drafted the necessary regulations or set in place the oversight that is needed. Congress is WASTING time, money, and efforts with their current pumping of BILLIONS of dollars into the corrupt and failing corporations, who are virtually doing "nothing" of significance to help the American people or small businesses.
Congress is, and has been the PRIMARY CULPRIT in all of this . . . most Congressmen need to be thrown out of office, esp. Barney Frank, Ms. Pelosi, Mr. Reid, Mr. Dodd, Mel Martinez, etc.
Nothing is going to change until the people vehemently DEMAND change in Congress . . . everything "flows" out of what Congress does. It is that simple, and yet complex.
So, what have YOU DONE to pressure YOUR Congressmen?
1-15-2009 @ 12:54PM
BHarrison said...
The FIs and the Hedge Funds have killed their markets; they have manipulated and corruptly defrauded their industries into bakruptcy . . . and worst of all, they have destroyed their customer base.
Conditions are ONLY going to WORSEN . . . and few people will ever have any faith or confidence in the Hedge Funds or the FIs in the future . . . they have revealed themselves to be the crooks that they are. The markets are so corrupt and chaotic that NO ONE knows what is really going on or could happen next. They, with the help of Congress (by relaxing or allowing even previous regulations to expire) have brought this upon themselves and our nation.
There should be a massive indictment, prosecution, incareration, and forfeiture of their ill gotten gains. There has to be strong and severe punishment of "white collar crimes" as deterrents for the future. Otherwise, nothing will change very much.
The future of our nation is at stake in all of this . . . if "the people" do not rise up to fight for their rights and justice, then we are in for a very long and severe Recession and/or more likely Depression.
How difficult should it be to instill INTEGRITY into our busineses and accounting systems? That is really the crux of the problems.
1-15-2009 @ 2:40PM
Kerri said...
If hedge funds were to go away; as an individual investor I would say good riddance. I am not enamored of the extra dose of volatility and irrationality they bring to market. Plus I would like them to sell off, so I can pick up their assets cheap. Time for people to exercise a little self reliance in the managing of their money. Hey Bernie, I'm still solvent!
This is why we have got to start thinking about ourselves. There is nothing one person can do to change an economy. I wouldn't put faith into any government. I say prepare for the worst, and hope for the best. Do what I did, and learn to trade the forex. If you don't know how, you can get a $100,000 free demo account by going to http://forex-currencyexchange.com click the link at the top left corner, if I remember correctly. It will take you to a sign up page where all you have to do is give your name and email. You can then start practicing trading.