NY Times: In Newest Crisis, Hedge Funds Face Chaos

In Newest Crisis, Hedge Funds Face Chaos

By LANDON THOMAS Jr.
Published: September 21, 2008



LONDON — Hedge funds usually thrive when markets turn volatile. But even these fast-money investors are struggling to cope with the wild swings in the markets, raising concerns that some may not survive.

Even before the Bush administration proposed its vast bailout for financial institutions, the hedge funds — those secretive, sometimes volatile investment vehicles for the rich — were on course for their worst year on record. The average fund is down nearly 5 percent so far this year.

One major hedge fund investor said that he had started to buy Morgan Stanley at $23 on Wednesday, convinced that the rumors of Morgan Stanley’s demise were unfounded. But as the stock began to plummet, he canceled his trade and watched with amazement as the stock sank to a low of $12 on Thursday.

And he stayed on the sidelines as the stock more than doubled that day and ended the week at $27 a share.

Volumes were high, fear was higher — but conviction, the final and most crucial ingredient, was lacking.

“With this kind of fear you can’t do anything,” the hedge fund investor said. “You never have heroes when you get these kinds of violent moves. The heroes only come out when the stock is down and stays down.” ......(more)

The complete piece is at: http://www.nytimes.com/2008/09/22/business/22hedge.html?_r=1&oref=slogin

or food this winter.

At least we are getting SOME satisfaction

...we owe them nothing, they don't even pay taxes. Fuck'em!

No matter WHAT they say about free markets and deregulation and small government and conservatism.

gee that would have helped them

By definition they're playing with fire...let them BURN!

going to want a bailout too.