Over Leveraged Hedge Funds are Taking Withdrawal Requests Today...

[Junkdrawer]

digby yesterday:

It looks like tomorrow may be "interesting." Lerxst reports:

We may have even more chaos to look forward to in financial markets tomorrow as hedge fund redemptions cascade in for the end of the quarter as the NYT reports:

The big worry is that a spate of hurried sales could unleash a vicious circle within the hedge fund industry, with the sales leading to more losses, and those losses leading to more withdrawals, and so on. A big test will come on Tuesday, when many funds are scheduled to accept withdrawal requests for the end of the year.

“Everybody’s watching for redemptions,” said James McKee, director of hedge fund research at Callan Associates, a consulting firm in San Francisco. “And there could be a cascading effect, where redemptions cause other redemptions.”

Krugman obliquely referenced this earlier today:

... there’s a serious chance of a run on the hedge funds, which could make things a lot worse.

...


http://digbysblog.blogspot.com/2008/09/maalox-moments-by-digby-it-looks-like.html

[jimshoes]

1. They should probably give themselves a big bonus

for bringing this all about. Or jail. I'd prefer jail.

[snappyturtle]

2. Damn the hedge funds anyway. I think hedge fund traders ( or should it be traitors?)

are and have been a key player in the mess we find ourselves in. The big players have made unconscionable amounts of money for doing what?

[Junkdrawer]

3. For What? Bringing back the "Good Old Days" of buying stocks on margin....

Borrowing 30 times your capitalization to play the market. That always ends well, doesn't it?

[snappyturtle]

5. I hope you're being sarcastic. nt

[Junkdrawer]

6. Now that you mention it, there was something about Black Thursday 1929...

That seems to ring a bell...

[avaistheone1]

4. No bailouts for hedge fund players. Thanks.