Looming global recession will put thousands of hedge funds out of business

Daily Mail ^ | 10/24/08 | Simon Duke

[TigerLikesRooster]

Looming global recession will put thousands of hedge funds out of business

By Simon Duke

Last updated at 10:29 PM on 24th October 2008

Millions of savers and pension fund holders face huge losses on their investments as hedge funds feel the pain of the credit crunch.

Over recent years British pension and insurance funds have channelled big chunks of their money into the highly controversial ?1.3billion industry because big returns were promised.

But the growing turmoil on financial markets could obliterate up to a third of the industry's value.

An expected 'fire sale' of hedge fund assets will also put further downward pressure on stock markets, affecting the nine million Britons whose pensions are linked to share prices.

Hedge funds are relatively new and highly secretive companies, which invest the money of the super-rich and pension funds.

Unlike banks, they are unregulated and use cavalier investment techniques, such as betting that a share price is going to fall, to make their money.

The imminent collapse of so many funds is expected to unleash a fresh wave of panic on the world's stock markets.

Last night, Mark Dampier, of financial adviser Hargreaves Lansdown, said: 'It affects the man in the street.

'If you've got an endowment maturing, or you are coming up for retirement and need to buy an annuity, you will see your savings worth much less than before. Hedge fund de-leveraging is dragging the whole market downwards.'

[dennisw]

Somewhere on FR I read today that 2.7 million Chinese workers are going to be fired because of this downturn in the world economy

Lots of Chinese firms operated at slight losses but were kept in business (subsidized) by the ChiComs just to keep Chinese people employed and out of making mischief or revolting

Even more made very little profit or essentially broke even.
That's how so many Chinese stuffs are so cheap