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Next phase would be hedge fund withdrawals - [Business]
2008-09-25
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Nouriel Roubini, the NYU economics professor, says worse is to come. The next stage will be a run on thousands of highly leveraged hedge funds. They faced huge losses from last week's shock regulation of short selling. Investors in such funds can redeem their investment on a quarterly basis; thus a bank-like run on hedge funds is highly possible. Hundreds of smaller, younger funds that have taken excessive risks with high leverage and are poorly managed may collapse. A massive shake-out of the bloated hedge fund is likely in the next two years.
http://anotherz.blogbus.com/logs/29599853.html
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评论
Just take a look at the typical Hedge Fund model:
* Hedge Funds take 2% assets under management
* Hedge Funds take 20% of the gains
* There is no transparency. You cannot see what they are doing.
* Your money can be locked up for extended periods of time.
* Hedge Funds commonly use leverage.
* Hedge Funds supposed to make money in up and down markets
* The average hedge fund is down 10% this year.