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

To: Wyätt Gwyön who wrote (37612)	8/2/2005 7:35:43 PM
From: carranza2	Respond to of 110194

Information on hedgies is of course difficult if not impossible to obtain on any kind of comprehensive basis. My concern is that they are getting their outsized returns through leveraging at way more than 2-1 and hitting a few winners, thereby creating huge profits while disgusing the losers. If this intuitive feeling on my part is correct, the hedgies are eventually screwed because it is simply not a game that can be kept up for very long. Plus, psychology takes over at some point like it did with the LTCM fiasco. The failure in 1999 to pass a regulatory act may in time be seen as one of the worst public policy failures of the last 20 or 30 years. The RE bubble left to itself would unwind slowly and perhaps do so relatively uneventfully. Add a dowturn in hedge funds and serious losses to their investors and the kaboom! as Jay Chen calls it could happen a whole lot faster. Pure intuition at work here. I acknowledge that I may be totally wrong because this is a fact-free analysis.