that's retarded; sometimes it just isn't in your interest to hedge.
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Should hedge funds be regulated?
- Thread starter eagle488
- Start date
that's retarded; sometimes it just isn't in your interest to hedge.
Of course hedge funds should be regulated ..... by the rich people who own stakes in them!
I can't think of a more effective regulation than the kind of regulation regime hedge funds were under for the 3 decades or so until 2000 - that is to say, none.
The main difference today is that hedge funds are taking in pension money and all the attendent notions of "public responsibility" that go along with it.
What that REALLY means is that when incompetent pension people goof up and pick a stinker, they want to blame (and sue) everybody but themselves. It's the consultant's fault, it's the hedge fund's fault.
It's the greed of hedge fund managers sticking out their hands for public money and it's the lack of real accountability of pension people that's the root cause of today's issues.
Not the need for more rules.
I can't think of a more effective regulation than the kind of regulation regime hedge funds were under for the 3 decades or so until 2000 - that is to say, none.
The main difference today is that hedge funds are taking in pension money and all the attendent notions of "public responsibility" that go along with it.
What that REALLY means is that when incompetent pension people goof up and pick a stinker, they want to blame (and sue) everybody but themselves. It's the consultant's fault, it's the hedge fund's fault.
It's the greed of hedge fund managers sticking out their hands for public money and it's the lack of real accountability of pension people that's the root cause of today's issues.
Not the need for more rules.
Quote from eagle488:
My opinion is that hedge funds should be regulated more heavily then mutual funds. The reasoning I give is simple. The strategies employed by the hedge funds are far more riskier then a mutual fund. I have not heard of one mutual fund ever "blowing up". In addition, hedge funds seem to attract a bunch of crooks. Sorry if I am being a little bit rough in that assertion, but there have been too many headlines where the hedge fund managers liquidate and head for the hills never to be heard from again.
Correct me here if I am wrong on this point. There are some bad mutual funds out there, but I never see headlines all over the news about their blowups or crooks cashing out the fund and running for Sweden.
No way. regulation is one of the fundamental flaws that hurts the mutual fund industry. the charters, inability to go to 100% cash, or inability to short
trust me..Mutual funds DO blow up. There are VERY few examples of hedge funds doing what you describe. so few that they make the news.
Quote from Epiphany:
The problem with leaving hedge funds unregulated is that they use massive leverage.
When hedge funds blow up, they are not the only ones affected
I don't think that's a reason to. The majority of funds that blow are the ones that use retarded amounts of leverage.
Those that survive (and, imho, are in the majority) either use very little leverage or use leverage passively (to invest in "risk-free" exotic securities as long as the borrowing spread works in their favor)
Quote from Epiphany:
The problem with leaving hedge funds unregulated is that they use massive leverage.
When hedge funds blow up, they are not the only ones affected
As long as the hedge fund is honest and discloses all risk, and the client is aware of it...it shouldnt be a problem.
there are many funds to choose from, some use leverage, some dont.
If someone doesnt want the exposure...dont go with a leveraged fund.
Quote from TheStudent:
Of course hedge funds should be regulated ..... by the rich people who own stakes in them!
I can't think of a more effective regulation than the kind of regulation regime hedge funds were under for the 3 decades or so until 2000 - that is to say, none.
The main difference today is that hedge funds are taking in pension money and all the attendent notions of "public responsibility" that go along with it.
What that REALLY means is that when incompetent pension people goof up and pick a stinker, they want to blame (and sue) everybody but themselves. It's the consultant's fault, it's the hedge fund's fault.
It's the greed of hedge fund managers sticking out their hands for public money and it's the lack of real accountability of pension people that's the root cause of today's issues.
Not the need for more rules.
This guy is right.
One can argue that hegde funds are MORE heavily regulated than mainstream securities...
Because rich people and entities can ** afford to litigate **...
And customers that can crush you in court.. are the ultimate regulatory mechanism.
People who promote regulation fall into 2 camps:
(1) The clueless.
These n00bs actually believe that they are "protected" by the NYSE and NASD and SEC. Hilarious.
(2) Government as Big Brother and Babysitter.
These argueably well-meaning people... always use the "exception proves the case" fallacy.
If they can find a retard on drugs that pissed away this dads million dollar inheritance...
Than sophisticated, professional market players should be heavily regulated.
These people want to control everyone in their lives... and YOU.