This article came out 10/14 in Britain, which means that if it were really a big deal, the US markets would have been down Friday, but they were up.
This is going to take a while to digest, not overnight.
This is no big deal because the numbers involved are way to small to affect the world's financial markets to any extent. The article says Refco has $642 million in debts. That is chicken feed in today's world. When Long Term Capital went bankrupt in 1997, that hedge fund had around $30 billion in assets, if I recall correctly. That was a big enough problem to cause some disruption in the stock markets. This Refco problem is totally insignificant to the stock market, although it may have some short-term effect on commodity prices.
The article you quote from the Financial Times about GM's pension woes doesn't make much sense. It says they have a problem with declining long-term interest rates. But long-term interest rates have been rising steadily for the last 30 days. I've noticed that FT's articles have a definite anti-American slant and they usually take a negative or critical perspective about anything related to America. Half the time they're exagerrated or just plain factually incorrect.
This really isn't a big deal, in respect to influencing the overall market.
The only ones who are really effected are the ones who owned REFCO stock.
If hedge funds are having problems the past couple months, its most likely that they were caught betting against the summer rally that happened.
Plus, investing too much money on the energy run up, while things have started cooling off the past couple weeks. Those heavily into energy got their clocks cleaned the past two weeks. Natural gas, oil, and energy related companies where majorly down.
Big october pullbacks are extremely common. Hedge funds got caught with their pants down.