FT this morning: Hedge FUN

It is in the FT this morning. They blame the HF industry for the wild price swings and the VIX action lately. This is the death spiral in earnest. Remember as they delever 10% to lower their debt/assets ratio, the ratio actually goes UP because by selling and delevering the prices go down 15%. Got it?

If it is in the front page of the FT, its got to be over right?

Maybe. Citadel is rumored to be barfing in the markets, which explains yesterday volatility (intraday 10% swing!) and shows a strong resistance of bulls. There is NO capitulation here, this is still an optimistic market. Also in related news, Funds of Funds faced dramatic redemption lately adding to this pressure.

We will see. I am thinking this is not over and I don't need to be exposed while we figure out if it is over. Buy and hold is dead.

Comments

Barry Kelly said…
Hm. Seems like this is the time to buy to me. Everybody's fearful => good news!
October 17, 2008 at 7:52:00 AM PDT
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