I know very little about the financial markets, but in the last few months I've heard rumors of the hedge fund market taking a giant nose dive. Could this be as bad as it has been predicted...like rocking the world economy bad?
I've been hearing about possible instability because of change in the oil prices. The hedge funds have been desperate to have a good year in 2005 and have leveraged a lot in oil. The steep downturn in the whole market has caused some like me to bail out completely..ten days ago.
REFCO COLLAPSE MAY ROIL RATES
By PAUL THARP
October 14, 2005 -- The era of cheap mortgages finally ended yesterday, triggering widespread anxieties that our economy could be rolling toward a brick wall. After fueling one of the most free-spending decades on record, the cheap, fixed-rate mortgage jumped virtually overnight from its historic 40-year lows to root permanently beyond the psychologically important 6 percent level yesterday, where economists believe it will keep rising dramatically.
Rising fuel costs, overall inflation and even the collapse of the big bond trading outfit Refco were blamed.
(More at the New York Post) http://www.nypost.com/business/53503.htm
This could leave a very big mark.
Seriously, unless handled correctly several markets could gollapse world wide. It's to late (for me) to examine in depth.