chiggins

Why Are Hedge Funds So Important in Today's Market?

anytime you have a situation where one group can take 30-40% of an assets trading it puts us all in danger of manipulation bear raids and lost jobs. The hedge funds now trade 50% of Nymex oil but they don't have to report the trades or who trades what. Oil is now at 74 and up 300% since hedge funds only traded 3% of the Nymex in 2003. hedge funds crowd the trading pits of any commodity and compete against commercial traders and thus disrupt supply chains. The dominate the stock market with 40% of the trades and we now have what could be anywhere from 2-8% of the entire U.S. stock market being counterfeit electronic stock certificates from illegal short selling. The hedge funds will use up to 20-1 leverage fro some assets which only adds extreme volatility. Hedge funds make this whole thing called investing more of a video game. That is bad for all markets. My last arguement is that out of 10,000 hedeg funds only 40 control most of the $1.5 trillion they manage. If they levered the entire amount, assuming that is all cash, then they could in essence control the entire stock market and wipe it out on a bad margin call.