The Hedges Get Trimmed

Just as I warned the readers of SurvivalBlog many months ago, hedge funds are vulnerable to rapid swings in interest rates. (My first warning was even before the pair of Bear Stearns hedge funds collapsed in the summer of 2007.) As the global liquidity crisis has expanded, other hedge funds have started to collapse en masse.

Here is an article is from England that is indicative of what is happening globally. (This is a global collapse, because again, as I warned, the current liquidity crisis is global in scale.) Hedge fund legends hit by financial crisis.

And here is an article from the American perspective: Debt Reckoning: U.S. Receives a Margin Call

With leverage ratios that average 26-to-1, hedge funds are very vulnerable to margin calls.

Check out this video clip on the hit to the finance houses, and this one on the plight of the hedge funds.

The Insider told me he expects that the majority of publicly-traded US hedge funds may be out of business by the end of 2008. Seventy down, 6,850 to go.