Futures Down Triple Digits on Hedge Fund Collapse

Yet another shoe(s) has dropped, as several large hedge funds imploded, leading to global bourses being pressured overnight.

According to the Times of London, several hedge funds with assets of more than $4 billion (£2 billion) were on the brink of collapse Wednesday night or had halted withdrawals, despite moves by the US Federal Reserve this week to ease America’s deteriorating credit crisis with a $200 billion collateral lending facility.

Note that the British Financial Press has had a much better handle on the credit/derivative situation than have much of the American press. I'm not sure if it's the distance, or perhaps a greater degree of objectivity. My own pet theory is that overseas editors are less impacted by the various scolds who work the refs, i.e., complain the the media is too pessimistic...

Global markets dropped on the news. The FTSE 100 was down almost 2%, while the XETRA-DAX and the CAC40 each lost more than 2.25%. Asia markets were down even more, as the HANG SENG dropped -4.79%, and Japan's NIKKEI 225 fell 3.33%

Dow Futures were off 150 points as of this writing, with Nasdaq off 23 and SPX futures lower by 15.

~~~

Sources:
Hedge funds on the brink as US Federal Reserve cash fails to ease crisis
The Times, March 13, 2008
Suzy Jagger

Despite the Federal Reserve's efforts Wall Street fears a big US bank is in trouble
Siobhan Kennedy and Suzy Jagger
The Times, March 13, 2008

Carlyle Capital Nears Collapse
PETER LATTMAN
WSJ, March 13, 2008; Page C2

In Dealing With Bear Stearns, Wall Street Plays Guardedly
KATE KELLY, SERENA NG and JENNY STRASBURG
WSJ, March 13, 2008; Page C1

Dow Retreats As Doubts Rise Over Fed's Move
LIZ RAPPAPORT and PETER A. MCKAY
WSJ, March 13, 2008; Page C1

Comments

[gebby:]

feds recently announced action does not go into effect until march 28th i believe.

2008 Mar 13 12:30 PM

[Tony Soprano:]

Barry, if you don't mind me saying that you are a bear and that you are a pregnant bear. And other bears out there are pregnant as well. Soon the world will be run over by bears and their cubs. THIS IS VERY BULLISH!

We have had three world downturns and they all have faltered. Call it a triple bottom? THIS IS VERY BULLISH!

Members on this site are using word and phrases like: death of a thousand cuts, world wide despair, fear fueling more fear and so on. THIS IS VERY BULLISH!

Foreign investors will show up at our doorstep. This not Armageddon and they know it. They will start buying while the dollar is low. Later this year or early in 09 the dollar will rebound and investors around the world will be praising America. THIS IS VERY BULLISH!

The commodities bubble will burst. This will be Armageddon but not for the consumer. The frozen consumer will defrost. Coins will be jingling again. THIS IS VERY BULLISH!

Later in 08 housing starts will show faint signs of leveling off. By Mid 09 housing will be fully stable. Large plumes of dust from new home construction sites will appear on the horizon. THIS IS VERY BULLISH!

As you see Barry, your string is getting short and good luck with all those cups they will be very hungry.

2008 Mar 13 02:49 PM

[Lawrence York:]

Maybe it will be the Financial Times that calcs the losses in Ginnie Mae. No one in the American Press, including Seeking Alpha, will pubish anything about it. Except for my articles, the last article when googling the subject of GNMA defaults is an article in 1989. And guess what? It runs a close parallel with with what caused the mess today. Maybe that's why the eerie silence.

2008 Mar 13 05:15 PM

[tomyris:]

Thought that article smacked of a nervous bear trying to convince himself to stay that way .

2008 Mar 13 06:21 PM

[Bela Ghoulashi:]

And Tony Soprano proves once again that he is chockful of bullish...t

(Did I spell that right?)

2008 Mar 13 07:44 PM

[al peia:]

CLOSING NUMBERS STOCKS/METALS/OIL/COMM...
SELL INTO THE SUCKERS’ BEAR MARKET RALLY/TAKE PROFITS
(3-13-08) (DOW +35, NASDAQ +19, S&P +6) [CLOSE- OIL $110.33 (NEW RECORD) / GOLD $993.80 NEW INTRA-DAY HIGH ABOVE $1,000 FOR FIRST TIME AT $1,001.50/ SILVER $20.45/ PLATINUM $2,097.50/ DOLLAR AT NEW RECORD LOW AGAINST EURO $1.56+, BELOW 100 YEN, ETC. (HOW LOW CAN YOU GO)]. SMART MONEY WOULD SELL INTO THIS SUCKERS’ BEAR MARKET RALLY (TAKE PROFITS) WHICH IS BASED UPON B**L S**T ALONE (NOTHING WHATSOEVER) AS STANDARD AND POORS ANALYST SAYS THE END OF WRITEDOWNS MIGHT (BUT NOT QUITE) BE IN SIGHT (WHICH IS LIKE THAT BROKER WHO SELLS STOCKS FOR A LIVING SAYING HE’S TRYING TO KEEP CLIENTS IN STOCKS BECAUSE AT SOME POINT THEY’LL GO UP)…RIIIIIGHT….. WHICH IS MEANINGLESS COMING FROM STANDARD AND POORS WHICH SHOULD BE ACCOUNTABLE/LIABLE (FOR THIS FRAUD) ALONG WITH THE FRAUDS ON WALL STREET, ETC., FOR THE TRIPLE A RATED SECURITIES ON THE BOOKS WHICH EVERYONE KNOWS ARE IN FACT NOT TRIPLE A (WORTHLESS JUNK BONDS, ASSETS, ETC.) SPURRING 200+ POINT SWING TO THE UPSIDE. VAST MAJORITY OF ECONOMISTS NOW SAY WE’RE IN RECESSION (EVEN DESPITE ELECTION YEAR GIMMICKS-AS GOOD AS GETS). RETAIL SALES DOWN MORE THAN EXPECTED .6%, FORECLOSURES UP 60% YEAR OVER YEAR, DOLLAR DOWN SHARPLY. ONE ANALYST SAYS CONTINUED UNEMPLOYMENT/EMPLOYMEN... WEAKNESS, PREMATURE TO SAY AS DID S&P THAT WE’RE NEAR END OF WRITEDOWNS, MAJORITY OF ECONOMISTS NOW SAY WE’RE IN RECESSION, HOUSING DOWNTURN MUCH FURTHER TO GO, VERY DEFENSIVE AS STOCKS CONTINUE TO HIT NEW LOWS IN LARGE NUMBERS, WORST OF HOUSING CRISIS AHEAD, AND THIS IS A BEAR MARKET IN A RECESSION ECONOMY. ANOTHER ECONOMIST/ANALYST SAYS U.S. CURRENT ACCOUNT DEFICITS, LACK OF TRUST IN U.S. FINANCIAL INSTITUTIONS AND TRIPLE A RATINGS (BONDS, ETC., WHICH EVERYONE KNOWS ARE NOT), BANKS’ NEED FOR RECAPITALIZATION, LOW SAVINGS (IE., CONSUMERS USING IE., GIFT CARDS FOR GROCERIES, ETC.), FED LOSING CREDIBILITY BY FLIP-FLOPS/WRONG MOVES, AND SEES ONLY SHORT-COVERING RALLIES AT BEST. VENEZUELA SHIFT TO PAYMENT IN EUROS FOR OIL OUT OF DOLLARS. YET ANOTHER ECONOMIST SAYS WITH MONEY SUPPLY INCREASING AT EXORBITANT 27% PER ANNUM, CITING ECONOMIST FRIEDMAN SAYS HYPER-INFLATIONARY (CONTRARY TO LAND OF FRUITS AND NUTS ECONOMISTS WHO THIS DAY SEE LAND OF FRUITS AND NUTS REAL ESTATE DOWN 17.6%, SALES DOWN 40-45%, AND MEDIAN HOME PRICES DOWN $100,000, AND BUDGET DEFICITS ACROSS THE BOARD). 3-12-08VERY MODEST DROP IN STOCKS RELATIVE TO REALITY, DOLLAR DOWN SHARPLY ON PANICKY FED KNEE JERK FUNNY MONEY ACTION, ONE ANALYST/BROKER WHO SELLS STOCKS FOR A LIVING SAYS HE’S TRYING TO KEEP CLIENTS IN STOCKS BECAUSE AT SOME POINT THEY’LL GO UP…..RIIIIIGHT…..REFER... THAT THIS IS WORST R.E. DOWNTURN IN 100 YEARS AND NO BOTTOM YET IN R.E. AND WSJ SAYS WORSE TO COME IN BAD PAPER (WRITEDOWNS, ETC.), AN OIL ANALYST SAYS RECORD HIGH OIL PRICES ARE HEDGE AGAINST FALLING DOLLAR WITH A LOT OF DOLLARS RELATIVE TO GOODS (AS IE., OIL, OTHER COMMODITIES, ETC.-HYPERINFLATION) AND IF YOU HOLD DOLLARS/DOLLAR DENOMINATED ASSETS/SECURITIES YOU LOSE VALUE AND SEES $4.00 GAS NATIONWIDE WITH RECORD DIESEL, WHILE ANOTHER ANALYST SAYS THAT SEEING FED GO FROM LENDER OF LAST RESORT TO LENDER (PRINTER) OF FIRST RESORT IS WORRISOME/TROUBLESOME. 3-11-08 SUCKERS’ BEAR MARKET IRRATIONALLY EXUBERANT NEW EPHEMERAL BUBBLE RALLY ON FED FEAR AND TREMBLING PANIC MOVE TO ADD $200 BILLION IN WORLDWIDE LIQUIDITY BY TEMPORARILY REPLACING (28 DAYS) ONE TYPE OF FUNNY-MONEY (WORTHLESS SUBPRIME COLLATERALIZED DEBT) WITH ANOTHER LONGER TERM WORTHLESS FUNNY-MONEY (U.S. DEBT WHICH CAN’T BE PAID BACK) WHICH IS A GREAT B.S. TALKING POINT BUT JUST A DROP IN THE BUCKET CONSIDERING THE MAGNITUDE OF THE UNDISCLOSED WRITEDOWNS/WORTHLESS PAPER BEING HELD(AND, CURING A BUBBLE WITH A NEW BUBBLE-I DON'T THINK SO), ONE ANALYST POINTS TO THE HYPERINFLATIONARY EFFECTS OF TOO MUCH LIQUIDITY CHASING TOO FEW GOODS AND MORE BAD NEWS TO COME IN TECH SECTOR AND EARNINGS ALONG WITH MORE WRITEOFFS/WRITEDOWNS WITH WORSE TO COME/NO BOTTOM YET AND HE REMAINS A BEAR, LAND OF FRUITS AND NUTS ECONOMIST SAYS BAD BUT NOT TECHNICALLY RECESSION BASED ON GOVERNMENT ELECTION-YEAR DATA (ONLY NUTS AND NUTS FROM THE LAND OF FRUITS AND NUTS BELIEVE SAME) WHILE TWO OTHER ECONOMISTS SAY RECESSION WITH STRUCTURAL PROBLEMS/HIGH INFLATION/LOWER DOLLAR AS FOREIGNERS/INVESTORS GET OUT OF WORTHLESS DOLLAR WITH BIG TROUBLE FOR U.S. POST-ELECTION AS REALITY SETS IN, TRADE GAP WIDENED, AND SMART MONEY WOULD SELL THIS RALLY/TAKE PROFITS.
www.albertpeia.com
www.albertpeia.com/cur...
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2008 Mar 13 10:40 PM