If hedge funds are the key to whether the economy tanks, who and how many are there ?

[EVDebs]

A list of hedge funds I found

http://moneyscience.org/home/tiki-index.php?page=List+of+Hedge+Funds

may or may not be a complete list, but finding out whether subprime mortgage lenders invested in these funds seems a prudent step in keeping tabs on finding out whether or not the invested money becomes 'wasted', and thus preventing a tanking of the economy. Begs the question of why couldn't this be more regulated or at least more public information in the first place.

[TechBear_Seattle]

1. As for *what* they are...

The Wikipedia article for "hedge fund" is pretty good:

A hedge fund is an investment fund charging a performance fee and typically open to only a limited range of investors. In the United States, hedge funds are open to accredited investors only. Because of this restriction, they are usually exempt from any direct regulation by the SEC, NASD and other regulatory bodies.

A Hedge fund's activities are limited only by the contracts governing the particular fund, so they can follow complex investment strategies, being long or short assets and entering into futures, swaps and other derivative contracts. They often hedge their investments against adverse moves in equity and other markets, because a common objective is to generate returns that are not closely correlated to those of the broader financial markets.

In most countries hedge funds are prohibited from marketing to non-accredited investors, unlike regulated retail investment funds such as mutual funds and pension funds. As they have little incentive to release public information they have acquired a reputation for secrecy, and less is known about the activities of hedge funds than about retail funds.

"Accredited investors" means people with very large amounts of money and sufficient experience to understand the risks, and larger corporate accounts.

[EVDebs]

2. So, as the list of hedge funds grows, so does the amount of secrecy and lack of information

Exponential stupidity. You gotta love laissez faire capitalism !

Also, the definition of 'accredited investor'

http://www.investorwords.com/57/accredited_investor.html

is a definition of Bush's base !

""SEC criteria:

*Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer.
*Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000.
*Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.
*Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
*Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000.
*And, any entity in which all of the equity owners are Accredited Investors.""

So, if you're a millionaire you're in the club !

[whistle]

3. No one knows for sure but estimates range from $50 trillion to over $200 trillion

...(that's correct, trillions with twelve zeros) are at risk from the cascading effects of hedge funds collapses. There is no way that the world monetary system will be able to cover those kinds of defaults, so what has begun is an economic meltdown like nothing anyone has seen since the middle dark ages. This ought not be allowed to happen because hedge funds are nothing but casino style gambling debts based on nothing but the Central Bank monetary policies which made speculation fiat money available to the hedge funds for these hugh financial take-overs especially in the past six and a half years.

It can still be prevented, stopped cold in its tracks now if congress has the will to do so. They can put the Federal Reserve into bankruptcy, take back the U.S. Constitutional right for congress to be the only entity to issue money, cancel all gambling debts to hedge funds just like is done with credit card debts and begin to again base the U.S currency on credit established by long term real economic development projects in the FDR New Deal style of recovery from the depression of the 1930s, such as repair and rebuilding of infrastructure, long term 50 year development projects like high speed magnetic levitation transportation system land bridge linking the U.S., Russia China and Europe initially and then all continents by the year 2058, move toward energy independence and alternative energy sources to fossil fuels, etc. Primary to this would be the impeachment and removal of Cheney and Bush and the neocons from power now. Then everything else would be possible, not by January 2009, but NOW!

[EVDebs]

5. Too big to fail ? The GAO's report on LTCM

http://www.gao.gov/archive/2000/gg00003.pdf

Their (hedge fund's) existence is based upon a loophole. This is a disaster from geniuses arrogance. Whom the gods would destroy they first make mad

[whistle]

7. Neocon's PNAC Report superseded the October 29 1999 GAO's Report

...and so has been all about BushCo lies, deceit, smoke and mirrors ever since.

[EVDebs]

10. I fear you are correct. The arrogance of power

sounds like the titles of Haldeman and Ehrlichman books after they'd been humbled by Watergate.

[truedelphi]

11. Except I would say that in the first place

These particular gods were MAD to begin with.

Supportingthe failing war policies of a guy who couldn't successfully direct a party of eber dreinkers to a bathroom out of blind loyalty (first) and the idea that God had spoken to him (Second) and that their idea of a Great Economy** was this high oil prices, hedge fund investing house building though house prices are too high for any but investors to buy them (third)

**(one that has been destroying the middle class for at least a decade)

[Skidmore]

12. Congress is on vacation.

[jojo54]

4. So, can we say that hedge funds are the new Scandinavian

bank accounts? I don't know anything about these funds, so this is an honest question.

[EVDebs]

6. Do you mean offshore corporate bank accounts ?

The tie-in to drugs via Latin America and the financial world (if you've read R T Naylor's seminal Hot Money and the Politics of Debt you know what I mean) is just too much a part of this whole milieu

On a related note, another DU post shows some activity by top insiders that may shed some light,

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1557441

[whistle]

8. It's really based in the Cayman Islands and driven by financial interests in the UK

[EVDebs]

9. But huge drug $ amounts along with Saudi petrodollars have a stake in this too

Who knows, maybe even OBL is smart enought to create DOZENS of these hedge funds and doesn't even have to come to the US to do his dirty work. He could operate from his cave for all that matters.

Read The Politics of Heroin by Alfred McCoy, along with R T Naylor's Hot Money and the Politics of Debt.

[whistle]

13. All the more reason to dump these hedge fund debts in the trash can

;wtf:

[Warpy]

14. There were slightly under 9000 registered in the Caymans alone

this time last year, spending most of their largesse trying to keep the IMF and World Bank from regulating the way they did business.

Goosing income by taking on a few hedge funds has proven just too tempting for a lot of people. Very high returns always equal very high risks.

Merrill Lynch took over a billion dollar hit last year. Likely most brokerages are going to absorb huge hits as fund after fund goes under, sunk by subprimes and even primes in vulnerable areas.

Deregulation will always produce a boom. The bust is inevitable, though, and is generally enough to convince people that regulation is a good thing for about a generation. Then the rich get antsy again, deregulation reoccurs, and the whole cycle begins again.

We'll be very lucky to get out of this with only a steep recession.