Hedgehogs 0
David P. Goldman, writing at Asia Times, considers the current economic news.
He finds a bright side:
That prompted an across-the-board liquidation of all assets, including commodities and emerging market equities most favored by the hedges. The nearly $2.6 trillion of hedge fund assets constitute the system’s only real bubble: too much money chasing too few returns, with a lot of fingers on the recall button. As of May, equity hedge funds with $1.25 trillion in assets had strongly net bullish positions.
As near as I can figure it out (I’m not a banker and hedge funds are notoriously secretive), hedge funds are premised on playing both ends against the middle while having cake eating it too. I do know that an acquaintance of mine who understands the mechanics of this stuff far better than I do has long considered hedge funds to be a destructive force.
