Leverage, fun on the way up, sucks on the way down.
Thank you Hank Paulson (at Goldman) and Chris Cox (at SEC). Yup, 40 to 1 ratios, sounds like a GREAT idea. FABULOUS idea!
The Hedge Fund Contagion
Stocks, bonds, and commodities will suffer as funds dump assets. Anyone with a 401(k) will get hit
Investors on Main Street have another reason to fear opening their brokerage statements: the rapidly shrinking hedge fund industry.
In the coming months, hundreds of hedge funds may shut their doors, sparking a massive fire sale on all sorts of investments. Just about anybody with a 401(k) or pension plan will feel the pain, since the sell-off will only exacerbate the plunge in stocks, bonds, and commodities—which make up the core of most people's portfolios.
October 23, 2008
Posted by blogger at 10/23/2008