davenerven

Was Friday's Rally Just a Hedge Fund Short Squeeze?

Margin calls are a distinct possibility but one should be aware that firms behind the Lehmans CDS had to find $400+billion by last Friday to settle their liabilities. The only source of cash is to liquidate stocks, so they did and they have settled. But now their counterparties now have $400+billion and the logical thing to do is to squeeze all the shorts dry. Think about it. Many short hedge funds could be belly up over the next few days.