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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (8121)	8/16/2007 9:16:43 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

All of this huge movement in the currencies is very destablizing. We see the Central banks coming up with steps today and tomorrow. Y'know John.. there's only one REALLY nagging fear that I have about this correction.. And that fear is that the enormous growth of the unregulated, opaque, hedge fund industry has created a condition where financial regulators have decided that the only way in which to restore the "balance of power" is to permit a market collapse so severe that the public demands they be regulated, or that they lose their luster as investment vehicles. Maybe it's an irrational fear, but the Hedge Fund industry has grown to control so much capital in an unregulated form that they are potentially a risk to national sovereignty and governmental power. But furthermore, the traditional "long only", and heavily regulated, mutual fund industry has been seriously challenged by the hedge funds (who can deploy any strategy to make money). I don't know.. but while some hedge funds are losing their @sses in mortgaged backed debt, there have to be others that are raking it in from their shorts in the equity markets (given the recent all-time highs in the NYSE short interest) accelerated by the removal of the "up-tick" rule on short sales. We'll see what happens over the next couple of days.. But whatever it is, it will be highly volatile.. Hawk