Every investor knows this bit of math: if you lose 50%, you need a gain of 100% to recover. It sounds odd, but the math is easy. You have a stock worth $100 and take a 50% loss. It's now worth $50. To get back up to $100, you need to double your money -- that's a 100% gain.

This simple rule is painfully apparent to hedge fund managers right now. While we're all celebrating the big gains they've made this year, the funds themselves understand that there's still a long way to go.

According to a leading re-insurer, disaster losses for insurers nearly doubled in the past year to reach almost $30 billion globally. The main culprits for the massive increase were calamitous winter storms in Europe, flooding in Britain and wildfires in the U.S.

Taking into account weather change, Munich Re anticipates an increased number of catastrophes in coming years and warns, "We should not be misled by the absence of mega-catastrophes in 2007," as "climate change is already taking effect" and "more such extremes are to be expected in the future."

The world's second-largest re-insurer estimates that losses to insurers from natural disasters jumped up to $75 billion this year. During 2006, losses from natural disasters totaled only $50 billion, while 2005 figures climbed up to $220 billion due primarily to Hurricane Katrina's ravaging of New Orleans.

According to The Wall Street Journal, Swiss bank giant UBS (NYSE: UBS) will announce a tremendous loss for the third quarter. The problem is primarily in its fixed income division, which holds, among other things mortgage-related assets.

The loss will be in the $510 million to $600 million range, based on a write down of assets that could be six times that large. The Journal writes that the "losses resulted from applying sharply lower market values to asset-backed bonds."

And, that is the core of the matter. Some of the fixed income instruments held by banks cannot be sold right now, or would have to be sold at a huge discount. Banking accountants use models to set asset values for reasons of earnings reporting, but those numbers are based to some extent on theory.

The problem is acute enough that it could spread to big U.S. money center banks like Citigroup (NYSE: C) and Bank of America (NYSE: BAC). After suffering sharp declines in August, Bank of America is now down only 5% for the year. Citi has not recovered as well and is off 15% over the same period.

Bad news out of a major U.S. bank would almost certainly cause the firms to test their lows again.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Shortly after the market closed today, Yahoo! posted its first quarter report. It was not too much of a surprise for those of us who follow tech stocks, but Yahoo!'s profits fell to $160 million, or 11 cents a share, from $195 million, or 13 cents a year ago.

Profits down by $35 million?! Yah-ouch!

What does this mean for the rest of the tech stocks like eBay and Google? Well, my guess is that as its competitors fall, so too will the rest of the sector.

So is this, in the words of eBay, a "Buy-It-Now" item?

Well, I guess we'll just have to wait until the official announcement tomorrow after the bell. I don't know about you, but I'm not going to be holding my breath on this one.