.... "You see exceptionally bright guys who set up arb strategies," says Shulman. "And whether it's political risks or short squeezes, those parameters blow up and it's a tough place to be." Even in ordinary times without government bailouts and unexpected events, when too many funds are chasing too few strategies, the yields start to diminish. "In the beginning your risk vs. reward is very good, but as more and more people are doing this, it's inevitable that the reward will be a lot less," says Andrew Schneider, founder and managing partner of HedgeCo Networks, a service provider to the hedge-fund industry. "You just have too much money chasing after too few ideas." .... http://www.thestreet.com/story/10475046/3/hedge-fund-hell-arbitrage-in-financials-backfires.html Still nothing learned from statistical arbitrage meltdown ?