[shrinkermd]

"The numbers are mind-boggling: 15 years ago, hedge funds managed less than $40 billion. Today, the figure is approaching $1 trillion. By contrast, assets in mutual funds grew at an impressive but much slower rate, to $8.1 trillion from $1 trillion, during the same period. The number of hedge fund firms has also grown - to 3,307 last year, up 74 percent from 1,903 in 1999. During the same period, the number of funds created - a manager can start more than one fund at a time - has surged 209 percent, with 1,406 funds introduced in 2004, according to Hedge Fund Research, based in Chicago.

"In a way, hedge funds are to mutual funds what Evel Knievel was to weekend motorcyclists. Unlike mutual funds, which are restricted in the ways they can invest, hedge funds can use leverage, trade derivatives and bet that stocks will fall, a technique called shorting. And unlike mutual funds, which generally try to beat a market average, hedge funds seek positive returns, even in down markets.

"THE meteoric rise of hedge funds has had a huge impact on the markets, investment banks and investors, who increasingly include institutions like pension funds or endowments. A recent report published by Credit Suisse First Boston said that hedge funds were responsible for up to half of all activity in major markets, including the New York Stock Exchange and the London Stock Exchange.

COMMENT: More likely than not, hedge funds will be the genesis and complication of the next financial crisis.

[2banana]

The more risk, the more reward - or the more you can win or lose...

[staytrue]

More likely than not, hedge funds will be the genesis and complication of the next financial crisis

The Long Term Capital fiasco in 1998 was a hedge fund that went bust and almost took the world financial system with it.

As a result of the LTCM crises, the federal reserve pumped money into the markets which resulted in the 2000 stock market bubble.

[carlr]

The problem with hedge funds is the temptation to short and distort to make money.With the massive amount of money that is being bet on a stock going down I`m worried about institutional attempts to drive down the price of a stock they may have shorted at the expense of regular funds or private investors that may be long on a given equity.

[jdm]

GEORGE: (To himself) Up again?! This is incredible. I'm.. I'm getting it.

ELAINE: You're getting what?

GEORGE: A stock.

JERRY: What stock?

GEORGE: Did you ever meet my friend, Simons?

JERRY: Maybe.

GOERGE: He knows this guy, Wilkinson. He made a fortune in the stock market. Now he's got some new thing - you know, there's supposed to be a big merger.

He wasn't even supposed to say anything. You guys should think about doing this too.

JERRY: How high's it supposed to go?

GEORGE: I don't know. But Simons said that if I wanted to get involved, that Wilkinson would tell me the exact right minute to sell. You wanna do it?

JERRY: Boy.. I don't know.

ELAINE: I'd do it but I don't have any money.

JERRY: What kind of company is it?

GEORGE: It's Sendrax. They've got some new kind of technique for televising opera.

ELAINE: Televising opera?

GEORGE: Some sort of electronic thingy.

JERRY: Well, how much are you going to invest?

GEORGE: (Unsure) Five thousand.. ten. Ten thousand.. Five thousand.

JERRY: Boy..

GEORGE: C'mon. Wilkinson's got millions invested in this stock. It's gone up three points since I've been watching it.

JERRY: What if I lose it?

GEORGE: C'mon, go for twenty-five hundred. We'll do it together. Come on, come on. We're in it together.

JERRY: (gives in) All right -- twenty-five hundred.

GEORGE: That's it.

(Scene ends)

[Setting: Jerry's apartment. Jerry's looking at a road map; Kramer is looking at the paper]

JERRY: Is that my paper?

KRAMER: Bad news, my friend.

JERRY: What? What news?

KRAMER: Sendrax.

JERRY: Oh, c'mon! It's down again?!

KRAMER: Two and a half points.

JERRY: Oh, I can't believe it. Let me see that. (Looks at the paper) That's four and a half points in three days! That's almost half my money!

KRAMER: Hey, I told ya.

JERRY: (Sarcastic) Yeah, you told me.

KRAMER: It's all manipulated with junk bonds. You can't win.

Excerpt: SEINFELD - SEASON 1; EPISODE 5: "THE STOCK TIP" - BROADCAST: JUNE 21, 1990

[Imaverygooddriver]

Two weeks ago, as Counting Crows performed on stage...

If this is what the "ultra rich" suffer through in terms of music, I`d rather live in a sh*t shack and eat fear factor food.

[Sonny M]

COMMENT: More likely than not, hedge funds will be the genesis and complication of the next financial crisis.

AG Elliot Spitzer was using alot of the same thinking and arguements when he started going after funds.

I don't know if what he did will be effective in the long term, but he certainly busted their chops pretty good, and came after them like a pit bull and got the reforms he wanted.

[Toto_for_breakfast]

Hedge? I prefer shrubbery.

[Toto_for_breakfast]

Hedge? I prefer shrubbery.

[Final Authority]

For the last ten years I have been thinking and saying that the mutual funds I own through Fidelity are just the hedge funds, in a way, for their individual stock accounts, that is, they use the clout of the mutuals to move the stocks in a positive way for select investors. I have since stopped investing in the stock market.

[Moonman62]

COMMENT: More likely than not, hedge funds will be the genesis and complication of the next financial crisis.

Back in the late 1980's before the 1987 stock market crash, the big thing was porfolio insurance, and I guess hedge funds are a similar attempt to take the risk out of investing.

[dirtboy]

COMMENT: More likely than not, hedge funds will be the genesis and complication of the next financial crisis.

All of these hotshot Masters of the Universe don't realize that sooner or later, cornered markets are dangerous.

My brother has worked in the financial sector his entire career and has been solid and conservative, but he keeps getting singed by associates who dabble with this crap and eventually fail.

[spetznaz]

Bump to your post several years ago. good call.