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Post by jeffolie on Sept 2, 2007 11:27:46 GMT -6
Watch for a peak of failing hedge funds at the end of September. Redemptions made at August 15th will force mass liquidations and closures 45 days later. Many hedge funds will simply stop allowing redemptions. The reaction will be an increased demand for more redemptions as confidence collapses for investors in hedge funds. There are over 2000 hedge funds that allow for these demands for redemptions in 90 days or less.
The Fed will come hard and fast with lowering rates when the Fed believes the Crisis is upon us.
I belief the first event will be the hammering of hedge funds at the end of September when all those redemptions activated on August 15th come to fruition.
How will the Fed react at the end of September?
I do not know. It will not want to appear to be bailing out hedge funds. On the other hand, hedge funds will not be able to meet margin calls by the investment banks; and, the Fed will want to help the banks.
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Post by beachbumbob on Sept 6, 2007 4:52:35 GMT -6
LTCM bailout brings back memories?
capitalism without risk is not capitalism......but socialism of the worse kind
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Post by jeffolie on Sept 11, 2007 12:02:26 GMT -6
Y2K Finance Hedge Fund Halts Redemptions and Sales (Update3) By David Clarke Sept. 11 (Bloomberg) -- Y2K Finance Inc., the flagship hedge fund of Wharton Asset Management, will halt redemptions until at least December because of credit market turmoil. Y2K Finance will stop calculating net asset value ``due to current market turbulence,'' the fund, based in the British Virgin Islands, said in a statement today. Wharton Asset Management specializes in investing in asset- backed securities. Investors are shunning bonds backed by home loans after late mortgage payments by U.S. borrowers with poor credit histories rose to the highest since 2002, rattling debt markets. The London-based firm joins at least 10 other investment managers, including New York-based Bear Stearns Cos., forced to shut down funds or suspend client redemptions since July. Managers of asset-backed funds ``could be in a lot of pain over the next few months,'' said John Godden, head of London- based IGS Group, which invests in hedge funds. ``There are no decent valuations on any of this stuff.'' The fund dropped 30 percent over June and July, according to data compiled by Bloomberg. It had been the best performing non- U.S. hedge fund investing in fixed income in the three years to the end of September 2006, according to Bloomberg data. www.bloomberg.com/apps/news?pid=newsarchive&sid=aGfQ5jcOrx1QThe fiasco of investing in asset- backed securities is starting to show up this week.
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Post by jeffolie on Sept 11, 2007 14:25:26 GMT -6
Sept. 11 (Bloomberg) -- Pirate Capital LLC, the hedge-fund manager run by Thomas Hudson, barred withdrawals from its two Jolly Roger Activist funds after the firm's assets declined by almost 80 percent in the past year.
Pirate designated the four stocks held by the funds as ``special investments,'' meaning that clients won't be able to get money back until they are sold, according to an Aug. 31 letter to investors.
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Post by unlawflcombatnt on Sept 12, 2007 1:04:01 GMT -6
Here are some excerpts from another version of the story about Pirate Capital LLC from Bloomberg News: 9/11/07 Pirate Capital restricts withdrawals in two Jolly Roger Activist funds" Pirate Capital LLC, the hedge-fund group run by Thomas Hudson that has a stake in Aquila Inc., is restricting investor withdrawals from its two Jolly Roger Activist funds.
Pirate designated those funds’ holdings as “special investments,” meaning clients won’t be able to get money back until they are sold, an Aug. 31 letter to investors said....
Hudson, 41, who founded Pirate in 2002, is known for acquiring stakes in companies and pushing management to make changes to boost their stock prices.
The firm’s assets fell to $375 million as of Sept. 1 from $1.8 billion a year earlier."
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Post by jeffolie on Sept 12, 2007 17:52:38 GMT -6
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Post by jeffolie on Sept 12, 2007 18:04:04 GMT -6
NEW YORK, Sept 12 (Reuters) - The commercial paper market is still shrinking and that could put growing pressure on the financial markets wrung out by a credit squeeze. The U.S. commercial paper market likely contracted for a fifth straight week and some believe the decline is again picking up speed like it did mid-August when several financial markets seized up, instead of slowing. Analysts at CitiFX forecast in a research note that the U.S. commercial paper market shrank by $91 billion in the week through Wednesday. Parts of the usually smooth, run of the mill commercial paper sector have seized up in the past month's credit markets upheaval as U.S. companies struggle to raise short term capital. The unprecedented reduction of this market, for debt which often matures in six months or less, is now critical for investors' trying to decided whether to venture back into stocks and other riskier assets. Should the short dated paper market's woes worsen, that may reignite the bid for highly rated Treasury fixed-income securities, which are a safe haven when investors shun more volatile paper, strategists said. today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-12T201611Z_01_N12255105_RTRIDST_0_USA-MARKETS-COMMERCIALPAPER-ANALYSIS.XML
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