The Hedge Fund Headache
The Hedge Fund HeadacheByHedge Funds are dangerous. They play with the D-bomb and Hedge Fund managersdon't know what they are doing. They are like children playing with alandmine in a sandbox. It's fun and exciting until the darn thing goes off.A D-bomb explosion would have the same impact on the global financialmarket, as an H-bomb would have denoted over Salt Lake City. The resultwould be a multi-century wasteland after the explosion.
A D-bomb explosionmeans that our Civilization will be facing a new multi-century Dark Age.The D-bomb is the Derivatives Market. In theory, derivatives are balancedrisk investments that allow Hedge Funds, banks, insurance companies andothers to profit from the spread created by the bet. The three designproblems with D-bombs are that the risk is usually an either or option thatdoesn't factor in a third alternative. Many bundled derivatives havecomponents that don't represent outside financial instruments that mighthave value after a D-bomb explosion. The Derivatives Market represents aboutforty times the total value of all world currencies combined.
If the D-bombgoes off, all world currencies would be worthless about forty times over.There simply isn't enough money to cover a D-bomb meltdown.In simple terms, a derivative is merely a bet. And it can be a bet onanything: interest rates, exchange rates, stocks, commodities, etc.Find acounter-party willing to wager against you, and you havecreated aderivative. And to make the bet you usually only have to put downa smallfraction of the bet amount. However, if their bet explodes, the Hedge Fundmust cover the leveraged amount of their bets. It's this coveragerequirement for dangerous bets that puts the global financial market atrisk.
The D-bomb risk/reward ratio doesn't make sense to anyone whounderstands it.Consider Long Term Capital Management. In 1998, it was the largestHedge Fund in the world. It's derivatives shenanigans almost triggered thecollapse of the entire global financial system. It careened to the brink offailure and would have gone under if the U.S. Government had not organizedan emergency bailout.
That bailout took the taxpayers of twenty countries tocut the timer to D-bomb denotation. And, Long Term Capital Management wasn'teven an American Hedge Fund.The global derivatives market is around $272 trillion, according to therecent figures from the Bank of International Settlements. And three bigAmerican banks' JP Morgan Chase, Bank of America and Citicorp - account for$77.6 trillion of the money being bet.European banks are at risk for over $100 trillion and are the global centerfor D-bomb development. However, America is racing to close the D-bomb gap.Because they aren't regulated like banks, U.S. Hedge Funds are on thecutting edge of D-bomb development.
American Hedge Funds manage over onetrillion dollars, up from thirty nine billion in 1990. In the first quarterof 2005, wealthy investors added twenty seven billion dollars to the capitalof Hedge Funds. These Funds are borrowing billions of dollars from majorbrokerage firms and others. With the help of Hedge Funds, America is closingthe D- bomb development gap. A small bad bet can easily bring down thelargest financial institution.
Hedge Fund trading may account for up to 50%of the trading volume on the NYSE. A few bad bets would collapse the DowIndustrial Average. Because there are no reporting requirements, nobodyknows how well or badly Hedge Funds are doing. However, I've never met aHedge Fund manager who wasn't seeking new blood for their operations. Ifthey were doing so well, they wouldn't need a constant influx of newcapital.GM is in financial trouble.
The company is planning to layoff 25,000 U.S.employees. The troubles were evident to the investment community for over ayear. Hedge Fund managers made a simple bet on GM. Funds bought GM'scorporate bonds and hedged the risk of default by shorting GM stock. Theplan was to hold the bonds and the Hedge Funds would lock in the interestrate spread between the coupon on the debt and the dividend on the commonstock.
This was a simple either or bet. If GM defaulted on the bonds, theshorted GM stock would cover the bond loss and allow for a profit. If theCompany strengthened its financial position, the interest on the bonds wouldcover any losses sustained by the short position. As with many D-bombs, itappeared the Hedge Funds couldn't lose.The D bomb exploded when GM debt was downgraded (causing its bonds to godown) and Kirk Kerkorian made a tender offer for 3% of GM's stock, causingGM shares to rise. Hedge funds got shredded in this little D-bomb explosion.A similar thing happened with Ford stock and debt.
And, it happens oftenwith no one the wiser.The fact is those betting on Derivatives are betting on the future ofCivilization. At some turning point in the economic situation, whether it bea recession or double-digit inflation, the Hedge Funds will lose sufficientbets to create a cascading explosion that will destroy Civilization. The sadfact is most people don't see that the D-bomb is in play and will eventuallyexplode..
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]The Broader Impact of Hedge Funds On Energy Markets
(ContentDesk) November 19, 2005 -- The co-founders of the Energy Hedge Fund Center present a new program on their ongoing research and advisory on energy and environmental hedge funds on Wednesday Nov. 30 at 1 p.m. EST.
Peter C. Fusaro and Dr.
Gary Vasey have written the first two reports on energy hedge funds, and launched the online community, Energy Hedge Fund Center website (www.energyhedgefunds.com). They sell and maintain the only Energy Hedge Fund Directory and publish the newsletter Energy Hedge. They are advisors to several energy and environmental hedge funds in the North America and Europe.Based in the twin capitals of U.S. energy trading, New York and Houston, Peter and Gary have called the new factors in energy trading and markets early and correctly. Todays energy trading has shifted with the influence of both energy hedge funds and investment banks leading to...
The Broader Impact of Hedge Funds On Energy Markets
Hedge funds > The Broader Impact of Hedge Funds On Energy Markets
GLOBAL ASSET ALTERNATIVES LLC RELEASES SUMMARY AND COMMENT ON SECURITIES AND EXCHANGE COMMISSION REPORT ON HEDGE FUNDS
FOR IMMEDIATE RELEASEOctober 21, 2003Editor Contact:
Marilyn Pearlman or Carole Mumford???????????????????????????? 404-298-6910GLOBAL ASSET ALTERNATIVES LLC RELEASES SUMMARY AND COMMENT ON SECURITIES AND EXCHANGE COMMISSION REPORT ON HEDGE FUNDSAtlanta, GA.(ContentDesk)
October 22, 2003 It's been less than a month since the US Securities & Exchange Commission (SEC) released its long awaited staff report "Implications of the Growth of Hedge Funds."
Global Asset Alternatives LLC, an Atlanta firm which specializes in creating and executing investment strategies in real estate, hedge funds and private equity has released a "Summary and Comment" on the SEC report that is available to the media and investors.An intense investigation of the hedge fund industry began in earnest several months ago, when the SEC considered the overall risk associated with hedge fund investments.
"This investigation was borne of their concern that hedge funds were being offered...
Hedge funds > GLOBAL ASSET ALTERNATIVES LLC RELEASES SUMMARY AND COMMENT ON SECURITIES AND EXCHANGE COMMISSION REPORT ON HEDGE FUNDS
Smarsh Inc. Introduces Hedge Fund Email/IM Archiving Solution, Archive InSite?
Smarsh Inc., a privately held global provider of technology solutions for the financial services industry, announces the launch of a new version of its archiving solution designed specifically for small to mid-sized hedge funds, Archive InSite. The new solution satisfies the need for hedge fund managers to follow future hedge fund record retention requirements. A bundled package of services, Archive InSite allows compliance officers, and other authorized administrators to utilize all products in the Smarsh Inc. Web Compliance Toolkit. Administrators will now have access to Email and IM archiving, anti-spam and virus protection, encryption, and a host of other provisions which have been designed specifically for hedge fund compliance.
Financial managers now have a definite digital trail of all electronic communication, providing a fail safe and fully searchable archive which complies with new hedge fund regulations. Furthermore, Archive InSite has also been engineered to easily...
Smarsh Inc. Introduces Hedge Fund Email/IM Archiving Solution, Archive InSite?
Hedge funds > Smarsh Inc. Introduces Hedge Fund Email/IM Archiving Solution, Archive InSite?
New Energy Hedge Fund Center Online Seminar Announced ?Fundamentals of Energy Hedge Funds?
The Energy Hedge Fund Center (EHFC ? www.energyhedgefunds.com), the leading online source for news and information on hedge fund activities in the energy industry, has announced that its staff will be conducting an online seminar on "Fundamentals of Energy Hedge Funds" on March 15th, 1pm EST.
The online seminar will be conducted by EHFC Director's and co-authors of the first two comprehensive reports on energy hedge funds, Dr. Gary M. Vasey and Mr. Peter C.
Fusaro. They will share some of their latest research on energy hedge funds."Oil prices continue at record levels and there remains speculation in the media regarding the role played by hedge funds and other speculators," reports Dr. Gary M. Vasey, who is VP Trading & Risk Management Practice for energy industry analysis and consulting firm UtiliPoint International, Inc.
"Our online seminar will explain what an energy hedge fund is...
Hedge funds > New Energy Hedge Fund Center Online Seminar Announced ?Fundamentals of Energy Hedge Funds?
Hedge Fund Advertising
HEDGE FUND ADVERTISING Have you seen all those big full page adsfor hedge funds in the Wall Street Journal, theFinancial Times, Investors Business Daily? Youhaven't. Maybe they are being drowned out by theregular mutual funds who continually tell youhow great they are. Shucks! I forgot. Hedge funds are not allowed to advertise. I wonder why.
Maybe they thinkthat their potential customers are too dumb toknow that hedge funds are a poor investment. Could be. The Securities and Exchange Commissionis trying to protect investors ? I think? To be able to buy into a hedge fund thesmallest investor must have a net worth of$1,000,000 and an income of more than $200,000per year. Maybe the SEC doesn't think thesefolks are bright enough to know a good thingwhen they see it. There are other groups that are major investors with the hedge funds.
Literally billionsof dollars are invested by university endowments,charitable trusts, state and corporate pensionplans. Could it be that they...
Hedge Fund Advertising
Hedge funds > Hedge Fund Advertising
Are Hedge Funds Right For You?
(ContentDesk) August 30, 2005 -- Hedge Funds have been a hot investment lately. Once reserved for the very wealthy, hedge funds now have minimum investments as small as $10,000. Should you jump on board the hedge fund bandwagon, or let this latest investment craze pass you by?Hedge funds are pools of private money that use specialized investment strategies in an attempt to earn greater returns for their investors. They can invest in just about anything in an attempt to make money. Usually, hedge fund strategies include the ability to short the market so they can profit by correctly timing market declines.Hedge funds have become popular because, historically, some have returned over 20% per year.
As a result, the number of hedge funds has grown dramatically the last few years. Many successful mutual fund managers have left fund companies and started their own hedge funds. Since hedge fund managers often receive as much as 20% of the gains, the managers can make a lot more money.Hedge...
Are Hedge Funds Right For You?
Hedge funds > Are Hedge Funds Right For You?
Hedge funds The Hedge Fund Headache
Hedge funds The Hedge Fund Headache
Wholesale Massage Chairs Direct from Premier
Premier Health Products massage chairs can now be purchased direct from Premier Massage Chairs at.? Why pay high retail prices for massage chairs when youcan get wholesale massage chairs for hundreds less? ?We have streamlined our business online so we never pass on additional operating expenses to our customers.?
Premier Health Product's is the third largest massage chair manufacturer in the United States and leads the industry...
Hedge funds > Wholesale Massage Chairs Direct from Premier
SMARTboard VideoConferencing Solutions Launched by VideoCentric
VideoCentric has announced that it is now offering a series of six newly integrated SMART Board Solutions for Schools, Colleges, Universities, Training Organisations and Board-rooms which allow the lecturer to make Video Conference and Video Streaming calls, by dialling out on the touch controlled screen or lectern.The SMARTboard-VC packages come in a variety of forms to suit those who already have SMARTBoards and projectors installed, or those who are considering front or rear projection interactive...
Hedge funds plasma tv SMARTboard VideoConferencing Solutions Launched by VideoCentric The Hedge Fund Headache
Hedge funds > SMARTboard VideoConferencing Solutions Launched by VideoCentric