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Politics : Welcome to Slider's Dugout

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To: jim_p who wrote (7020)	11/12/2007 2:08:07 PM
From: jim_p	Read Replies (1) of 50264

The current sell off is due in part to hedge fund redemptions resulting from the poor performance in 3Q. What we are seeing this week is a lot of unwinding of the carry trade as the leveraged hedge funds sell off investments to raise cash for redemptions that are due this week. As a result we are seeing oil, gold, USD and the common stocks with the most gains being sold off. Q4 redemptions should be a lot worse given the even worse performance so far this Q along with foreign investors getting hit with both the poor returns and the lower dollar. Buying will lead to more buying until the music stops and selling will lead to more selling as investors all scramble for the last chair. We're now in the selling leading to more selling mode which will lead to even worse hedge fund performance, which will lead to even more selling in Q4 etc etc etc. This is no time to be bargain hunting, we're in the short the rallies mode and my guess is this will last for at least the next three months. The bears currently have the perfect storm going for them with the credit crunch, spiking oil prices and hedge fund redemptions which will only lead to more hedge fund redemptions next Q. Stay short and prosper. JMHO, Jim

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