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Politics : Welcome to Slider's Dugout

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From: surelockhomes8/16/2007 7:50:24 AM
   of 50468
 
from yahoo rimm board..

lets look..

1. Hedge funds used leverage to buy/short deriviative options to drive up stocks prices.

2. The unwinding of the carry trade is causing forced selling in other asset classes like stocks and commodities, especially the high fliers.

3. Hedge funds are getting redemption notices left and right. This is causing more forced selling of other assets classes.

4. Hedge fund investors may become quite fearful of putting their money back into hedge funds as they realize the kind of risk they were exposed to.

5. Some hedge funds investors are going to lose 100% of their investment as hedge funds collapse, and won't have any money to re-invest even if they wanated to.

6. As hedge funds collapse, the ability to leverage up stock prices is going to shrink.

7. The yen carry trade is coming apart overnight in "an unorderly fashion. Add to that yesterday's news that CFC is getting hit with some 12% lending rates.... this is a massive screaming widening credit spread that isn't over yet.

While we might bounce around at markets -10%, expect continued selling into bounces for the next 6 weeks.

Markets go up farther than you think,,,, and markets fall down farther than you think.

investorvillage.com
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