# Should hedge funds be suspended/banned or more tightly regulated?



## Whiskers (22 September 2008)

From... _Should shorting be suspended/banned?_



misterS said:


> Robert Gottleibsen says *shorting is alright - just got a bit out of hand by the time a trillion dollars was devoted to it. *




Quite an understatement.



> The hedge funds have only themselves to blame
> 
> The people who were big victims of the shorting action were the clients of those who loaned the stock. They remained long in stocks and saw their unscrupulous managers lend stock to shorters who destroyed the value. The ruthless superannuation funds mangers who undertook those actions should have been fired. Now they can't do it and their clients are the winners.
> 
> The hedge funds are going to suffer big losses depending on how much time they are given by their supporters to cover. Many of the world banks loaned large sums to these funds and they will incur well deserved losses."




Maybe a more appropriate question should be should hedge funds be suspended/banned or more tightly regulated.

It reminds me a bit of the firearm debate. Who should have access to them, should their purpose for existance be better defined, regulated and accountable?

To what extent are hedge funds responsible for the excesses in the economy and stockmarkets... oh, and the negative stigma towards short selling?


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## chops_a_must (22 September 2008)

So... how about that commodities bull market you profited from Whiskers?

It was pretty good wasn't it?


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## nomore4s (22 September 2008)

chops_a_must said:


> So... how about that commodities bull market you profited from Whiskers?
> 
> It was pretty good wasn't it?




but it's different when hedge funds are pushing prices up, that's ok


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## chops_a_must (22 September 2008)

nomore4s said:


> but it's different when hedge funds are pushing prices up, that's ok




I could have sworn hedge funds never pushed prices up.


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## nomore4s (22 September 2008)

chops_a_must said:


> I could have sworn hedge funds never pushed prices up.




lol, people sure do have short memories


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## wayneL (22 September 2008)

Yes

Institutions who exist to "hedge" economic conditions for their clients should be banned. We should all go down the economic slot together.

The futures markets should be banned to stop producers and manufacturers from locking in profits on their produce.

We should ban farmers from profiting on the high price of grain.

Let's just ban profit of any kind.

***Flicks through Marx's _"The Communist Manifesto"_


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## Greg71 (22 September 2008)

Ban the use of motor vehicles. This way, we could send a clear message to the Saudis that "we don't need your oil". 

My plan to achieve this is to detonate a series of EMP's across the country, thus returning us to horse-drawn vehicles.


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## Trembling Hand (22 September 2008)

Well Whiskers I am really looking forward to you answering your opening post.


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## Whiskers (22 September 2008)

The point is how free can a market be to run it's own free course?

High commodity prices cut both ways... high profits for some and high costs for many. I'm sure reasonable people wouldn't like the economy to frequently cycling from boom to bust. Surely the name of the game is sustainable growth. 

Is total economic chaos an acceptable price to pay for a 'totally free' market?

How much impact should rather anonymous international 'funds' be allow to have on the economy.



bean said:


> ALMOST ARMAGEDDON
> MARKETS WERE 500 TRADES FROM A MELTDOWN
> http://www.nypost.com/seven/09212008/business/almost_armageddon_130110.htm


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## Kauri (22 September 2008)

It is time to say good bye to the investment banks and this *opens the door for the big hedge funds to gobble up more of their risk activities* as well as to continue to poach more of their dubious trading talent.

Cheers
...........Kauri


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## chops_a_must (22 September 2008)

Whiskers said:


> Surely the name of the game is sustainable growth.



That expands year upon year you mean?


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## wayneL (22 September 2008)

Whiskers said:


> The point is how free can a market be to run it's own free course?
> 
> High commodity prices cut both ways... high profits for some and high costs for many. I'm sure reasonable people wouldn't like the economy to frequently cycling from boom to bust. Surely the name of the game is sustainable growth.
> 
> ...



The only way to limits busts is to limit booms. But "they" allowed the biggest boom in history develop on an orgy of unsustainable levels of credit.

"They" have failed miserably by not acting 5 years ago. They are trying to shut the gate after the horse has bolted.

It didn't take a genius to figure this out, many of us ordinary muppets spotted the situation developing and have been warning something must give for some time.

We aren't geniuses or gurus, but someone was making too much money to want to do anything about it... and that includes governments. Hence my rejection of governments as umpires. They are players in the game and now want to change the rules because they are losing.


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## Whiskers (22 September 2008)

chops_a_must said:


> So... how about that commodities bull market you profited from Whiskers?
> 
> It was pretty good wasn't it?




Well, this is your chance to discuss the big moral and ethical issues... my point is to look a bit further then your own trading account and self interest and into the wider social and economic impact on all those people and our children who had little or nothing to do with the commodity boom.

Did we or are we really going to profit in the final analysis if this particular type of 'free' market was let to run it's own course? 

Some of us made a few dollars from trading but we also payed higher oil and material costs, not to mention the so far unknown losses to super accounts, house values, maybe savings in financial institutions etc etc.

How will the average person be better off if these so called free market forces were to be allowed to work themselves out?


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## chops_a_must (22 September 2008)

Whiskers said:


> Well, this is your chance to discuss the big moral and ethical issues... my point is to look a bit further then your own trading account and self interest and into the wider social and economic impact on all those people and our children who had little or nothing to do with the commodity boom.
> 
> Did we or are we really going to profit in the final analysis if this particular type of 'free' market was let to run it's own course?
> 
> ...





The companies with unscrupulous moral and ethical standards have been reamed, but have been excused by the government. They as well as those responsible for their demise should have been left to suffer.

Instead, the rest of society will suffer when they have to pay for those losses directly when the finance sector is bailed out.

And how that even compares to say, multiple universities in Australia that are teetering on the verge of bankruptcy, not being bailed out, is beyond me.

If all of societies' money is used to prop up a ponzy, fraudulent scheme, what is going to be left for the rest of us who were smart enough not to be involved, when our savings accounts essentially become worthless when we begin printing money?

What is going to be left for social services in the US when all their money has been spent on bailing out corrupt and bankrupt institutions?


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## skyQuake (23 September 2008)

Whiskers said:


> How will the average person be better off if these so called free market forces were to be allowed to work themselves out?




Thats the ideal position isnt it? A person living in a free market?


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## Schmuckie (23 September 2008)

In a sense, hedge funds are being suspended, banned or more tightly regulated through current market forces.  There's nothing inherently wrong with responsible hedge funds, but the space was becoming too overcrowded.  The chaos over the last few months, and especially through September, will have the effect of thinning the herd.  The best hedge funds, the ones that stuck to basics, will survive.  The ones that shouldn't be in the market will self-destruct. It will be interesting to see what's left by the end of the calendar year.


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## nioka (23 September 2008)

At the risk of drawing the wrath of you know who, I would like to throw in my 2c worth. While I do believe in the princilple of a "free" market, we can not afford to have a market capable of being manipulated by greedy dealers and traders that bend the rules for unreasonable profits, aided by greedy company directors. Therefore there are situations that need to be regulated and some to be banned altogether.

To say that some "greedy" companies need to be taught a lesson and then act in a greedy way is a bit two faced. It is the super fund contributors and the retirees savings that get punished.

 Therefore BAN some RESTRICT most and have a FAIR system with reasonable rewards for capital and effort.


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## chops_a_must (23 September 2008)

nioka said:


> Therefore BAN some RESTRICT most and have a FAIR system with reasonable rewards for capital and effort.



Socialism you mean?

Pay everyone their exact worth to society?

I wouldn't be against any of the above at all.


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## awg (23 September 2008)

its my understanding that many super funds have substantial positions in hedge funds, growing over recent times, so any large scale failures there will hit everyones back pocket


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## CanOz (23 September 2008)

wayneL said:


> but someone was making too much money to want to do anything about it... and that includes governments. ....... They are players in the game and now want to change the rules because they are losing.




If you ever wanted a simple explanation of how we got into this mess and why they are doing what they doing to get out of it, this is it i reckon!


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## nioka (23 September 2008)

chops_a_must said:


> Pay everyone their exact worth to society?
> 
> I wouldn't be against any of the above at all.




And what do you suggest we do with the rest. Shoot them.?


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