An article about "What's New and Exciting In Money" by Ben Stein

[Bill]

It looks like "reality" is becoming ever more popular...

http://www.spectator.org/util/print.asp?art_id=11130

"An entire new class of financial entity has been created called "the hedge fund." It is new not in the sense that there were not always funds that hedged by selling short or buying assets uncorrelated with other assets. The new part of this phenomenon is that it is based on a demonstrably false premise: that these entities can consistently outperform wide stock indexes. They have not and cannot, and yet their managers and employees for a time are paid stupendously well.

As with the private equity function, the main effect is to siphon money from productive enterprise into financial manipulation. Or, to put it another way, to siphon money from Main Street to Greenwich or Wall Street."

[stefan segal]

Bill...hedge funds are being used to shift the losses (tabulated in the very near future) of bankers and other subprime lenders face with the bursting housing bubble, onto the shoulders of those whose retirement funds are invested into these funds.

The funds can say we bought those blocks of mortages in good faith and at discounted prices from the subprime lenders...and that disparity made our fiscal bottom line numbers look so good...that the bottom dropped out is not our fault...take you lumps...suck it up. This is very unlike a banl who has lost someone's savings...banks remain responsible...that is why the market look so vibrant and hot...but they will crash and say "so long sappy, I'm on my way"...and all that retirement money evaporates in the numbers.

Just in the last few weeks, the world market as lost 2.3 trillion dollars...evaporated...up in smoke.

Check out this site...it's not exactly on hedge funds...but it gives you and idea of the climate out there.

Stefan


http://www.321gold.com/editorials/orlandini/orlandini031207.html

DOW THEORY ANALYSIS SAC
March Newsletter
How Bad Will It Get?
Enrico Orlandini
Mar 12, 2007
written on Mar 8, 2007

If you have any involvement in the equities markets, I'm sure you've noticed that things were a bit rough last week and have yet to really settle down. The reason du jour is China. If you read the comments coming out of Washington lately you'll know that China is responsible for everything from global warming to the common cold. Supposedly they are going to slow their economy down and that will lead to less of everything for everybody. I'm not sure I buy that argument, but it was in all the papers. Right behind China in the blame game, we have what is euphemistically referred to as the "Yen carry trade". That's where you borrow money from Japan at very low rates and loan it out at much high rates. Major players and beneficiaries of this financial version of musical chairs include J. P. Morgan Chase (JPM), Goldman Sachs (GS), and Merrill Lynch (MER) whose weekly chart is included below:




These companies have done nothing but rally for the better part of four years thanks to a central bank generated flood of liquidity the likes of which has never been seen before. Notice how Merrill actually started to roll over weeks before the flood gates opened last week. The carry trade contributed billions and billions of dollars to the bottom line of these companies.

[exarmyranger]

[QUOTE=Bill]It looks like "reality" is becoming ever more popular...
"An entire new class of financial entity has been created called "the hedge fund."No Busn.Finance,Stock/Money Market trade report section in your local paper? :readpaper: (New)enity/class? Come on Bill...When ever a country/nation who's currency is regulated by the World Bank Gold Standard/Currency Exchange,rate takes a cut,or rises in market value...somebody is making profit,on the margin,somebody else left...to cut further losses,and avoid the risk of forfiture of remaining funds due to insolvency.Hedge Funding,is a worthy tool,to utillize,but the reason it works is the Billions of $ in REAl currency(value in gold,silver,land,national resoures,ect)are only numbers,commas,and decimal points,and are only represenative's of estimated total worth,not actual worth...:disbelief: to put it anotherway...Whenever somebody(country,corp,cartell...)loses,theres always somebody,that profits...The real heavy's (Hedge Fund Brokers) pull thiers(profits)out of the margin(s) created whether the rate of exchange goes up or down...ex