hedge fund, what is a hedge fund, start a hedge fund, hedge fund research
Myth #3: Hedge Funds Are Responsible for the Currency Crises of the 1990s
Careful analysis of the 1992 Exchange Rate Mechanism crisis, the 1994–95
Mexican peso crisis, and the 1997 Asian currency crisis points to an array of factors
contributing to the devaluations. Even when hedge fund activities were a link in the chain of events leading to a
crisis, there is no evidence that the hedge funds caused the crises or collapses. It is
possible, for example, that hedge funds reacted to news of changes in macroeconomic policies. Moreover, at least in the Mexican and Asian crises, domestic
investors, rather than foreign hedge fund operators, played the lead role in dumping the currency.
- posted by Mark Pane @ 10:17 PM 0 comments

 
hedge fund, what is a hedge fund, start a hedge fund, hedge fund research
hedge fund, what is a hedge fund, start a hedge fund, hedge fund research

Myth #1: All Hedge Funds Are

Highly Leveraged

A recent IMF study reports that best estimates place the number of funds using
leverage in the range of 50 percent to 70 percent. In addition, they report that
an estimated 85 percent of hedge funds have a leverage ratio of two or less.8
However, in instances where leverage is high (like LTCM), enhanced market discipline
might be the answer. This could be encouraged, for example, through of hedge funds. It is notable that the use of leverage, in and of itself, does not imply excessive risk-taking by hedge funds. After all, bank trading desks that compete with hedge funds in many markets employ much more leverage than the average leveraged hedge fund.
- posted by Mark Pane @ 6:11 PM 0 comments

 
Hedge Fund Myths
Hedge Fund Myths
Critics of the hedge fund industry contend that these funds’ activities have negative
consequences for markets and for the economy. Martin Mayer, talking about LTCM, expressed one view on the value of the industry: “It is probably worth noting that the work done at LTCM, while not illegal or sinful, was without redeeming social value.”7 Calls for increased regulation or more direct government oversight of the industry are
often based on commonly held, but largely unsubstantiated, beliefs about hedge funds.
- posted by Mark Pane @ 3:07 PM 0 comments