I mean how come alot of hedge funds (which aren't regulated) buy all those Credit Default Swaps (CDS's) betting that brokerages and banks were going to fail?
Please comment
thanksIs the government going to investigate all the hedge Funds for their part in the financial crisis?What is there to investigate? The hedge funds (whose job it is to make money for its investors) saw that an impossible situation had developed in the mortgage markets and the managers invested their money so as to profit when the situation collapsed. Hedge funds buying these instruments SHOULD have been a sign that a bubble was forming, because hedge funds look for these kinds of situations. Anytime hedge funds start loading up on contrary instruments like CDS, Put contracts and short selling people should take that as a sign to run from whatever they are betting against. The signs have been there for some time that the situation was out of control; if you want to blame anybody for the situation start at the beginning of the chain, not the end, and start listing people and institutions as you go. (Hint: start with Jimmy Carter signing the Community Reinvestment Act in 1977. Make sure your trail visits Congress many times. Make sure you also include the Fed, the GSE's, the ratings agencies, mortgage brokers, investment banks and AIG. Feel free to add others as needed.)Is the government going to investigate all the hedge Funds for their part in the financial crisis?Not even a remote chance. They don't care.Is the government going to investigate all the hedge Funds for their part in the financial crisis?Hedge funds are not at the center of it. Cheap credit, poor underwriting and bad risk management by the banks are.Is the government going to investigate all the hedge Funds for their part in the financial crisis?
The better question is who will investigate the government for creating, mandating, and not enforcing the regulations they put in place.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment