Fed Wakes Up To Hedge Fund Risks

dont bother. we're doomed to another ltcm-like episode. too much easy money on the table. the question is knowing whether the world will head into a epic recession sparked by this event and when will it hit.
 
How come people dont attack the 'correlations' of the mutual fund industry?Have they forgot 2000 and every mutual fund buying up the same awful stocks and a crash happening and wiping billions out of the market?
 
When, not if, the meltdown happens, it will make LTCM look like a pimple on an elephant's ass.

How do I know? It's rather simple (I'm a simple guy, so I need to keep things simple): Even those involved in the derivatives trade honestly can't explain the product they deal in with any precision, would need a week of daily seminars just to scratch the surface, and those attending would leave more confused than they were before the seminars started.

No one even has a realistic approximation of how many $$$ worth of derivatives are 'out there': The latest estimate is 750 trillion dollars worth, which is 60x the Gross Domestic Product of The United States.

Now, I can't even comprehend how that's possible, but again, I'm just a simple man.
 
Quote from ByLoSellHi:

No one even has a realistic approximation of how many $$$ worth of derivatives are 'out there': The latest estimate is 750 trillion dollars worth, which is 60x the Gross Domestic Product of The United States.

Now, I can't even comprehend how that's possible, but again, I'm just a simple man.
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Next break will be faster and harder than what we had seem so far..

hold on tight..
 
Why worry so much? If all of you are so convinced that hedge funds will cause a crash then use this knowledge to your advantage. Identify assets that will lose the most in value and be ready to short them at the first sign of trouble or take the opposite approach and look for assets that will be considerably mispriced during a panic and get ready to pick them up at rock bottom prices.

LTCM, the Asia crisis, the Russian default, all created fantastic opportunities to profit for traders who were prepared.

A prepared trader should be able to take advantage of inefficiencies caused by shocks to the system...

-Neo
 
Quote from ByLoSellHi:


No one even has a realistic approximation of how many $$$ worth of derivatives are 'out there': The latest estimate is 750 trillion dollars worth, which is 60x the Gross Domestic Product of The United States.
More...

Implosion of the financial world predictions have always failed. ALWAYS
 
Quote from Neodude:

Why worry so much? If all of you are so convinced that hedge funds will cause a crash then use this knowledge to your advantage. Identify assets that will lose the most in value and be ready to short them at the first sign of trouble or take the opposite approach and look for assets that will be considerably mispriced during a panic and get ready to pick them up at rock bottom prices.

LTCM, the Asia crisis, the Russian default, all created fantastic opportunities to profit for traders who were prepared.

A prepared trader should be able to take advantage of inefficiencies caused by shocks to the system...

-Neo
More...

yes with hindsight this is obviously easy.

unfortunately no one seems to know what exactly is going on until the asset in question is worthless.

(too many examples to list )

i think the general point here is that hedge fund plc collectively when they all f..k up the market will go into turmoil.

the only thing you can do is put on the usual flight to quality trades.
 
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