I sat next to 2 commerical mortgage brokers on a flight last month. They told me that they was aware of hedge funds that were buying commerical strip centers to try and flip and make money. Can you believe it??? If these hedge funds are flipping real estate only God knows what else they are into. John
Didn't we recently learn that at least at Harvard U. they don't let professors tinker in between courses with Harvard's nestegg. They leave it to professionals while accountants ring up the results.
With all due respect, you are a complete idiot to suggest that the Hedge Fund Industry is already heavily regulated. Currently, there is very little regulation and only recently ( 2004 )did the SEC state that hedge-funds would have to register themselves and be subject to a minimum of surveillance reviews. You really need to put down that crack pipe, son.
Mr Apex Capital you must manage billions of dollars of pension funds and other institutional investors. Of course there is so little regulation your on-shore fund doesn't need to spend significant effort time and personnel to ensure compliance to the new regulations, does it? You have so much free time you come to ET all the time just to insult people. We need more regulation so funds can hire 50 lawyers and accountants for each trader... that is an excellent idea because it creates jobs... let's give Mr Apex Capital a Nobel Prize in Economics.
the one point were i agree with Mr. Lo is that the hedge funds are in a liquidity pinch --- and that is their weakness. There are many big hedge funds that are holding huge core positions that are underwater currently {like GM shorts}. if these positions are liquidated in a rush to cover new losses from other positions that are moving negative then there will be some blowouts. as i have stated in several other posts, the liquidity war between the institutions and the hedge funds {both competing for the same customers} over this past year is causing liquidity stretches for both parties --- there will be a break soon because there is always cycles that hit economies and markets that are not ever planned for. it always seems that when a breakdown occurs it is always something that was not planned on -- always something just out of the blue {justice department goes after microsoft right when the fed raises interest rates by 50 basis points --- who had a plan for the markets reaction to that combined affect}.
good point, John, was just thinking about that myself, are HFs into real estate or REITs. the coming RE bubble pop would be enough to kick the @$$ of a HF if too much money is allotted to RE ventures. timing RE is an extremely sophisticated mechanism, I would say completely outside the reach of HF managers with or without their QF PhDs. Having money (in a HF) and knowing what to do with it (especially in the RE arena) are two very different things. some people have a 'nose for real estate' but more 'RE investors' get smoked and this includes HF managers, if you ask me. we'll see it happen when the RE bubble pops. in fact, just speaking by common sense, when the RE bubble pops, if HFs are too into RE with that trillion dollars of theirs, that in itself could cause a catastrophic economic collapse taking out super banks funding the mortgages. I'm into currencies but my father is a RE speculator and very successful one, so I know what kind of knowledge goes into the process. I'd say just about the same number of "investors" can make it in RE as who can make it in trading forex. very few. fx
there are just too many doomsday scenarios for there to be one. noone even saw LTCM coming. Everyone that it was the dawning of a new era in money management. Today we have the reverse. People are seeing a lights out scenerio and it never happens that way.