Hedge Funds...Leverage Works Both Ways

Discussion in 'Wall St. News' started by libertad, Oct 8, 2006.

  1. Many hedge funds represent highly leveraged plays with a high level of focus as to the underlying assets in play...

    There is approximately 100 billion in the energy asset plays and a few funds bit the dust with a simple $75 to $60 move in oil...

    The total debt picture for equities is approximately $16 Trillion....
    http://www.wallstreetandtech.com/sh...4TKMGKQSNDLOSKH0CJUNN2JVN?articleID=193003650


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    The Templeton group has priced oil in the mid $40s for 2007...and it is certainly likely that a $75 to $45 move will precipitate some more leveraged plays biting the dust...
    This asset class only has $100 billion to unwind...

    The equities class has $16 trillion in debt against it...

    If one player balks...this can create sudden havoc in the marketplace....
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    Definitely more risk of above average moves .....
     
  2. Not really. How is the alleged 100-billion-dollars of speculative money spread out in the energies? Is it 100% long? Is it 50% long & 50% short? Is it all in cash? How much is it leveraged? At most, it'll only be a teeny-tiny crisis if anymore meltdowns occur. Stay tuned.