tag:blogger.com,1999:blog-4102429195693595750.post3297420159044801982..comments2024-03-22T05:15:17.042+02:00Comments on Sudden Debt: Hellasioushttp://www.blogger.com/profile/03564511281240682625noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4102429195693595750.post-87939116143411954512007-03-31T05:29:00.000+03:002007-03-31T05:29:00.000+03:00The party is well and truly over where the multi-f...The party is well and truly over where the multi-faceted money spigot is concerned, and kudos to you for doing such a wonderful job outlining our crazed credit creating landscape. Despite the happy talk that emanates from the street, The sub-prime catastophe is just the first event in in a whole slew of hideous financial "accidents" to come. I put accidents in quotes since high wire (financial) acts of the sort you have chronicled, rarely, if ever, end well after repeated forays across the canyon. See Ludwig Von Mises on "The crack up boom."<BR/><BR/>Our latest asset bubble collapse, unlike the one's before it, is going to be too much to overcome this time around, because, well, real estate ain't tech stocks. But, interestingly, to me at least, the secular bear that begain in '00 and ended in late '02, early '03, you know the one that took 50% off the S&P500, has not, after four years in bull mode, been surpassed in real terms. And now we are at the very early states of the next and likely most savage leg down in shares, though the woes of real estate will likely be grabbing the headlines more often than during our incipient death spiral.Archerhttps://www.blogger.com/profile/06371543262980512422noreply@blogger.comtag:blogger.com,1999:blog-4102429195693595750.post-87386070756545625082007-03-30T15:25:00.000+03:002007-03-30T15:25:00.000+03:00Hedge funds' capital under management have grown t...Hedge funds' capital under management have grown to approx. $2 trillion, as of 12/06. Quite a lot of that money comes from pension funds trying to make as much money as possible to cover holes in their funding. More potential return = higher assumed risk, no two ways about it.<BR/><BR/>For anyone plunking down money to a hedge fund and saying they were misled about risk is nonsense.<BR/><BR/>And since you brought up pension funds: there is a huge storm brewing out there with billions in "structured finance" bonds sold to dozens of pension funds, in the US and Europe. Lots of them are already 15-25% under water.Hellasioushttps://www.blogger.com/profile/03564511281240682625noreply@blogger.comtag:blogger.com,1999:blog-4102429195693595750.post-10073077505558629832007-03-30T14:22:00.000+03:002007-03-30T14:22:00.000+03:00Hellasious,Interesting WSJ article about San Diego...Hellasious,<BR/><BR/>Interesting WSJ article about San Diego pension fund suing Amaranth for being misled re: potential risk exposure. It seems that whether it is the housing bubble or hedge fund blowups, San Diego is right on the bleeding edge of the debt crisis. <BR/><BR/>Of course, I'm sure the fact that the San Diego pension fund is already dreadfully underfunded had nothing to with the "prudent" decision to use pension monies to speculate on natural gas futures.<BR/><BR/>If I were a prospective pensioner I would be screaming up and down asking what my retirement money is doing in leveraged commodity plays. I am already doing that myself with my no money down ARM.Anonymousnoreply@blogger.com