Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (20830)	10/28/2004 8:44:34 AM
From: Kailash	Read Replies (1) \| Respond to of 110194

Hedge Funds Are Scapegoats for Waning Volatility: Mark Gilbert Oct. 28 (Bloomberg) -- Hedge funds, already the usual suspects whenever financial markets go awry, stand accused of suffocating the very market anomalies they rely on to beat their less adventurous peers in the investment community. The ``prosecution' alleges that with $866 billion chasing identical strategies, any arbitrage opportunities in markets where hedge funds are active disappear too fast for anyone, including the hedge funds, to make a buck... Volatility is waning in several markets. The most widely used measure is the Chicago Board Options Exchange's contract for the S&P 500 index, known as the VIX index. It lets traders and investors speculate on the rate of fluctuation for U.S. stocks. So far this year, the average value of the contract has been about 16 points. That's down from 22 in 2003, 27 in 2002 and 26 in 2001, and from peaks of more than 40 in 2001 and 2002. ... Their size makes hedge funds a handy target. Oil at $55 a barrel? Hedge funds. Copper surging 60 percent in a year, then dropping 10 percent in a single session? Hedge funds. Baltic Dry Freight rates for shipping goods down 45 percent from January to June, then rebounding 80 percent in four months? Hedge funds. When the search for a scapegoat begins, it's often a sign that a particular market move has run its course. Just as nature abhors a vacuum, markets detest inaction. The decline in volatility is unlikely to persist -- and when it rebounds, guess who'll get the blame? quote.bloomberg.com