The Real Crash - 30% Of Worlds Hedge Funds to Collapse Market Braced for "Sheer Panic" Monday

Also, just for the record, after today's soaring markets I am quite sure when none of this comes to pass on Friday that we will be told it was all due to government manipulation

As I said previously - when the markets go up or even don't go down a lot, those preaching doom tell us its due to government manipulation. Of course, if that were true, the markets would never go down.

Alrighty then, I'll check back in 3 days or so.

I've been following the Urban Survival site and the prediction there is that we're following the Elliott Wave Principle and the dow would rise to around 8900 before the wave 5 takes it down to 5800. Apparently, it all fits in with the linguistics from Half Past Human.

Looks like they're right on achieving around 8900 as the dow closed at 9065. Let's hope they're not right about the fall.

I think this is just another case of "if you predict too early, those who want to believe everything is fine will tear you to shreds when you miss by some time."

Just like Roubini is harshly criticized for being two years too early on the call for this crisis.

One critic said something like "If we listened to Roubini we would have spent the last two years in the fetal position." (Paraphrased)

This is utter rubbish. It is an assumption that if you see bad things on the horizon you have two choices. 1) DO nothing and continue on mindlessly. And 2) Do nothing and curl up in the fetal position. I think there are many more options than that, such as "change the way you are doing business and avert the bad thing."

Human beings are short sighted little primates. If you are going to predict, you better be able to make it relevant within a week or preferably to the day or their desire to have their delusion resumes its control and they move on quickly disregarding it entirely. And, since it is very difficult to predict anything to a day, (which is the only thing many humans find impressive at all) we go blundering through history making exactly the same sort of avoidable mistakes over and over again because those with foresight are not "magic" enough for the deluded.

When you think about it logically, the best predictions about disaster would never come true. We would hear them, such as climate change, and over population, or a housing bubble, and we would see the wisdom in them and act in such a way that they never came to pass. We wouldnt laugh because the predicted day or hour went by only to meet up with us a year, or decade or so later. How on Earth is that a "victory" for those laughing?

I have a question, I have been researching hedge funds, and george soros for 3 years. Would anyone know how his fund works? Were does he get his money from? How can he earn so much, but have so little failures?

This may well have been overblown, but he was definitely on to something. I just made the connection.

Telegraph

"We knew there would be a bloodbath as soon as the market opened," said the trader. "We knew the price would rocket, widening the exposure of lots of hedge funds – they would be offering their daughters in return for the stock, just to get out of it."

The scramble for shares meant that shareholders could name their price, and VW stock went from 210 euros to more than 1,000 euros in two days, making VW, at one point on Tuesday, the world's most valuable company at £240 billion.

Meanwhile, the fund managers who hadn't managed to buy enough shares to settle their accounts watched with horror as their losses spiralled out of control. Some of the bigger funds are thought to have lost as much as £4 billion.

Another story on it can be found here if one doesn't like the Telegraph as a source.

This hysteria and, yes, sheer panic was caused by exposure to ONE COMPANY - Volkswagen. That's just one stock.
Will 30% of all hedgies fail as a result of the VW blowup? Doubtful, but as the short-covering unwinds we may see more than a few set sail for the afterlife.

It is now Friday, and all major markets have closed.

We were told that panic and hysteria would cripple the market and they would "really" crash:
- There was no "sheer panic and hysteria" - quite the opposite. Across the world, markets surged and the US market had its second biggest 1 day gain ever this week.
- No market crashed, in fact, most of them are UP a good percent for the week.
- No hedge funds collapsed, no where near the 30% predicted.
- All US stock indices had a 10% gain or greater for this week of predicted mass panic, the first time in history this has occurred.

We were told that things would be so bad that markets would have to close early by Friday:
- No market had to close early for any reason.

This thread is just 1 in a series of "EVERYONE PANIC AND ACT HYSTERICAL!" threads that have been on ATS lately. This one, like all the others, have been wrong. I would ask that the OP in the future not try to fear monger like this, but as I stated previously I'm sure I will be ignored.

I'm also now going to be told how somehow the OP was right because 1 stock somewhere went down, or because mysteriously the government decided to once again "manipulate" everything right on time with someone's doomsday prediction. I also do not doubt that when 1 hedge fund collapses in the future (there are quite a few, I'm sure at least one does since it happens every year) I will be told how right this thread is.

But the readers of ATS know the real truth: this - like all the other economic doom predictions - was wrong. I have no doubt that there are a minority of posters who so want to believe in economic doom that they will never admit this, but its just not reality.


[edit on 31-10-2008 by LowLevelMason]

I'm just sort of used to this now. Because for some reason, many folks here *want* there to be a crisis. They want stocks to crash, markets to tumble, martial law to be implemented, and so on. It would thrill them to no end. Why?

Who knows... either they don't want all that food they stocked up on to go to waste, or they are dying to play the "omg I told you so!" card. Or they like many humans, just like the "excitement" of a disaster. People don't like the humdrum.. they like stuff shaken up, even if it's at the cost of suffering. They don't care.. they need their "fix" of sorts.

I'm sure we'll continue to see the gloom and doom threads weekly, and if something doesn't come to pass, it will be waved off as some super-secret group or government agenda.

I'm just sort of used to this now. Because for some reason, many folks here *want* there to be a crisis. They want stocks to crash, markets to tumble, martial law to be implemented, and so on. It would thrill them to no end. Why?

Who knows... either they don't want all that food they stocked up on to go to waste, or they are dying to play the "omg I told you so!" card. Or they like many humans, just like the "excitement" of a disaster. People don't like the humdrum.. they like stuff shaken up, even if it's at the cost of suffering. They don't care.. they need their "fix" of sorts.

I'm sure we'll continue to see the gloom and doom threads weekly, and if something doesn't come to pass, it will be waved off as some super-secret group or government agenda.

A few links to support the OP:

www.freep.com...
Rush of economic data likely to shape week
BY TIM PARADIS • ASSOCIATED PRESS • NOVEMBER 3, 2008
...
“I think in the coming weeks what we are going to see is something that will look like a bloodbath in the hedge funds,” said Ugeux."...

www.fool.com...
Beware of Crashing Hedge Funds
By Selena Maranjian November 3, 2008
...
"if many hedge funds implode, along the way they'll be selling off the stocks they've been holding. That selling will depress those stocks' prices; if we hold those stocks, our investments will suffer, too."...

money.cnn.com...
Dow Jones Suspends 2 Hedge Fund Benchmarks Amid Deleveraging
November 03, 2008: 06:45 PM EST
...
"Suspended are the Dow Jones Hedge Fund Equity Long/Short and Equity Market Neutral Strategy benchmarks"...

www.reuters.com...#
Blue Mountain freezes fund in face of withdrawals
Mon Nov 3, 2008 11:40pm EST
...
NEW YORK, Nov 3 (Reuters) - Blue Mountain Capital Management LLC has temporarily halted redemptions at its largest hedge fund after clients asked to withdraw money despite its "distinguished" performance, according to a letter to its investors."...

www.marketwatch.com...[32FC6BF4-9924-4936-B4C5-1B5FE301E63F]
Dow Jones Hedge Fund Indexes Temporarily Suspends Publication of Various Indexes
Last update: 4:05 p.m. EST Nov. 3, 2008
...
Dow Jones Hedge Fund Indexes, Inc. (DJHFI), today announced that it will temporarily suspend publication of the Dow Jones Hedge Fund Equity Long/Short and Equity Market Neutral Strategy Benchmarks, effective November 3 until further notice. The Dow Jones Hedge Fund Balanced Portfolio Indexes (DJHFBPIs) also will be suspended."...

business.timesonline.co.uk...
November 2, 2008
Hedge fund giant GLG warns investors about big shake-up
...
"It is also going to stop investors making withdrawals from its $1.5 billion (£930m) Market Neutral fund for six months. The review will decide the best way to preserve capital in GLG’s 40 funds."...

www.thestreet.com...
Hedge Fund Liquidations: Five Things You Need to Know
10/31/08 - 01:25 PM EDT
...
"Since the hedge funds are more concerned about creating liquidity than preserving the integrity of their portfolios during a crisis, the higher priced stocks tend to get sold first. It is far easier to create $10,000,000 of cash by selling smaller amounts of a $200 stock (say Apple) than larger amounts of a $25 stock (say Altria). And before you know it, that $200 stock has become a $100 stock. "Classic" valuation is thrown out the window."...

www.bloomberg.com...
Deephaven Freezes Multistrategy Hedge Fund to Avoid Asset Sales
By Katherine Burton
Oct. 31 (Bloomberg) -- Deephaven Capital Management LLC, the hedge-fund unit of stockbroker Knight Capital Group Inc., froze a $1.6 billion fund after investors asked to get back 30 percent of their money.
...
www.ft.com...
Polygon freezes redemptions on $4bn fund
By Kate Burgess and Peter Thal Larsen
Published: October 31 2008 23:32

"Polygon, the Anglo-US hedge fund group which built a name for investor activism at companies such as British Energy, is suspending redemptions in its flagship $4bn Global Opportunities multi-strategy fund while it unwinds the fund and returns money to investors."...

reply to post by Dbriefed

Just an opinion of a bunch of pencil movers who try to make living. We've seen this before: "exposures, derivatives" -- all that fancy blah-blah kiss my ass.

Originally posted by fleabit
I'm just sort of used to this now. Because for some reason, many folks here *want* there to be a crisis. They want stocks to crash, markets to tumble, martial law to be implemented, and so on. It would thrill them to no end. Why?

Who knows... either they don't want all that food they stocked up on to go to waste, or they are dying to play the "omg I told you so!" card. Or they like many humans, just like the "excitement" of a disaster. People don't like the humdrum.. they like stuff shaken up, even if it's at the cost of suffering. They don't care.. they need their "fix" of sorts.

I'm sure we'll continue to see the gloom and doom threads weekly, and if something doesn't come to pass, it will be waved off as some super-secret group or government agenda.

I use to feel like I was becoming this person... You are right to a certain extent.

But then I had to remind myself that the research I've done is in fact true, and at any day of any hour we have to be ready for the worst, because it is right around the corner.

Not just financially, but in other aspects as well such as War and Politics.

Remember This... They are the ones that are now warning the public. Obama, Biden, Powell and other leaders are telling us about this upcoming crisis we face... Not just so called "conspiracy theorists". Please keep that in mind.