Hedge funds seek to keep a grip on data (coverup getting worse)

Hedge funds have always had a reputation for secrecy but the recent crisis engulfing the industry is prompting some to become private to the point of paranoia.

SRM’s decision to sue the Wall Street Journal for printing the poor performance of its Monaco-based SRM Global hedge fund, which lost its original investors 85 per cent in a little over two years, is at the extreme of industry reaction.

And without more companies going to bankruptcy court we won’t see the bottom. The worry over the transparency of Citi’s books would go away in a bankruptcy proceeding.

Bankruptcy is the way out.

In the end, all the bailing out and giveaways were un necessary and won’t solve the crisis. Making these groups of financial pirates disclose their holdings and holders will.

Hedge funds serve no useful purpose. They only move capital for the sake of manipulating an issue. The second they have pumped an issue up or down to a satisfactory extent, their money disappears and the issue experiences massive price reversals. They then sell the issue, or more likely, buy to cover. Subsequently, they proceed to profit from the chaos they create.

When more of the money in the market is speculative than actual long term capital investment, the market ceases to serve its proper function of reflecting the relative value of underlying instruments. That is what has happened. You see daily 5% moves in the stock market because no one can figure out what anything is worth.

Hedge funds have consciously created this chaos for their own profit at the expense of most others. A pension fund is regulated and must show holdings. An individual investor is regulated and must show holdings. A hedge fund is a country-less, border-less, law-less entity that answers to no one.

My suspicion is that their reluctance is due mostly to graft but partially due to their politics and partially due to the fact that they don’t want us to know how much of the oil price rise resulted from their bad investments in oil.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.