I don't think it would really matter much to most people. Wasn't Enron and World Com regulated. I know they are companies and not hedge funds but what I am getting at is whether they regulated or not if they are determined to blow out they will do it.
Of course hedge funds should be regulated ..... by the rich people who own stakes in them! I can't think of a more effective regulation than the kind of regulation regime hedge funds were under for the 3 decades or so until 2000 - that is to say, none. The main difference today is that hedge funds are taking in pension money and all the attendent notions of "public responsibility" that go along with it. What that REALLY means is that when incompetent pension people goof up and pick a stinker, they want to blame (and sue) everybody but themselves. It's the consultant's fault, it's the hedge fund's fault. It's the greed of hedge fund managers sticking out their hands for public money and it's the lack of real accountability of pension people that's the root cause of today's issues. Not the need for more rules.
No way. regulation is one of the fundamental flaws that hurts the mutual fund industry. the charters, inability to go to 100% cash, or inability to short trust me..Mutual funds DO blow up. There are VERY few examples of hedge funds doing what you describe. so few that they make the news.
The problem with leaving hedge funds unregulated is that they use massive leverage. When hedge funds blow up, they are not the only ones affected
I don't think that's a reason to. The majority of funds that blow are the ones that use retarded amounts of leverage. Those that survive (and, imho, are in the majority) either use very little leverage or use leverage passively (to invest in "risk-free" exotic securities as long as the borrowing spread works in their favor)
As long as the hedge fund is honest and discloses all risk, and the client is aware of it...it shouldnt be a problem. there are many funds to choose from, some use leverage, some dont. If someone doesnt want the exposure...dont go with a leveraged fund.
This guy is right. One can argue that hegde funds are MORE heavily regulated than mainstream securities... Because rich people and entities can ** afford to litigate **... And customers that can crush you in court.. are the ultimate regulatory mechanism. People who promote regulation fall into 2 camps: (1) The clueless. These n00bs actually believe that they are "protected" by the NYSE and NASD and SEC. Hilarious. (2) Government as Big Brother and Babysitter. These argueably well-meaning people... always use the "exception proves the case" fallacy. If they can find a retard on drugs that pissed away this dads million dollar inheritance... Than sophisticated, professional market players should be heavily regulated. These people want to control everyone in their lives... and YOU.