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Voluntary deleveraging of hedge funds?

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March 12, 2008 – Comments (3)

This story, Drake considering liquidating all hedge funds, could very well be what is playing out in a number of hedge funds right now. 

Certainly if I was managing a hedge fund I'd have been looking to really reduce leverage last year rather than running the risk of force deleveraging because of insufficient capital to ride out the gross uncertainty in the market.  I was leveraged with what I could afford to lose until about March, so I deleveraged a year ago.

I bet most of them are looking to deleverage somewhat at this point...  Not good for prices. 

3 Comments – Post Your Own

#1) On March 12, 2008 at 2:33 PM, dwot (42.85) wrote:

Reading list tab required...

This is bad...  The one month budget short fall was $175.56 billion.  That's 46% above the previous highest month, which was a year earlier in February.  Ick...

http://www.reuters.com/article/businessNews/idUSWBT00859020080312

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#2) On March 12, 2008 at 5:38 PM, AnomaLee (28.52) wrote:

Yea, This wasn't too far away from forecasts. We're still relatively in-line with 08' budget expectations, and I think we're going to stay that way.

I'm more interested to know what the Import Price Index (MoM, YoY) increases will be tomorrow. The dollar has been pounded dollar at an accelerated pace, so I expect these figures to be higher than the .8% consensus.

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#3) On March 12, 2008 at 6:14 PM, dwot (42.85) wrote:

Wall Street estimates were $160 billion, so about 10% more than wall street expected.

That was needing to borrow $581 for ever man, woman and child for a single month.

I think 10% away from an already dismal forecast is dire... 

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