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bdc63
Schumpeter Reincarnate


Joined: 16 Feb 2007
Posts: 4392
Location: Maryland

question about how you are listing imploded HFs
PostPosted: Thu Aug 09, 2007 2:30 pm Reply with quoteBack to top

The bear steans hedge funds that blew up were completely separate funds with different investors. Same as will the 3 French funds that were frozen today. I think that you should count each one separately on the HF Implode-O-Meter rather than grouping them under their bank.

Also, it may make things a little less confusing if the number of imploded matches the listing of names imploded (so, maybe leave the historical ones for reference, but don't assign them numbers).

Not trying to be critical - hope you don't take it that way.

Whadda ya think?

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HelloKitty
Dyn-o-mite!


Joined: 25 Jun 2007
Posts: 218

Re: question about how you are listing imploded HFs
PostPosted: Thu Aug 09, 2007 5:50 pm Reply with quoteBack to top

I agree. A fund with a separate name/entity/different bunch of junk in it is separate.

The key factor is that the funds get INDIVIDUALLY shut down/frozen (imploded).

It seems to be hedge funds are subject to having a 'bank run' phenom on them when too many people want out which causes a freeze since they cannot sell the assets in the fund (underwater loans no one will buy)

So if these funds were public traded stocks they couldnt freeze thier own stock and the price would plummet like 1929. However the private funds can freeze and prevent a run/fire sale. however there will be LOTS of freezes since everyone will want out before they are frozen (so they freeze more, causing more panic, and more people want out)

Is there a word for this? Its a mass hedge freeze. A hedge run.

Is a frozen fund imploded? If not how long after a fund is frozen is it imploded? 1 year? 20 years? It would say a frozen fund gets on the ailing/watch list at least since obviously thier assests are underwater or they wouldnt have to freeze. OR IMPLODE THEM since you cant take your money out and the assets could be underwater up to 100% or negative due to leverage.

I also dont think the historical ones should have numbers IMO, I would only attach a number to funds that blew this year. Its confusing the # is 11 and there are 18 on the list... whatever thats minor.

whaddya think?
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HelloKitty
Dyn-o-mite!


Joined: 25 Jun 2007
Posts: 218

Re: question about how you are listing imploded HFs
PostPosted: Thu Aug 09, 2007 7:13 pm Reply with quoteBack to top

chek it out this website lists funds and details but its subscription (with demo)

http://www.privateequityinfo.c.....ggodMTSXzw

many with many thousands of funds and the fact they are private, how the heck would anyone know when they go kaput? I bet the HF-implode can only capture a fraction of the implosions.

Hey heres a new idea: ponzi-implode.com, a list of ponzi funds that go under! oh wait the whole economy is now a ponzi sheme nevarmind...
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Justin
My head implode


Joined: 17 May 2006
Posts: 493
Location: Atlanta

Re: question about how you are listing imploded HFs
PostPosted: Thu Aug 09, 2007 9:08 pm Reply with quoteBack to top

You guys bring up some excellent feedback. So far, we have been grouping funds that are run under one bank as one fund because we believe:

1) the funds are still highly related being under the same management (not unlike how various subsidiaries under the same parent are really just different legal manifestations of the parent - separated for purposes of limiting liability)

2) grouping funds that are under one organization as one fund limits the ability of others to criticize us in that we are just driving up the count.

For now, we're going to stick with this methodology but it's still early and we aren't totally closed off to the idea of breaking them out.

Now, as for funds that have frozen redemptions, I imagine we will put them on ailing/watch. If they freeze redemptions for more than maybe 30 days, we put them on "imploded" ... we'll have to work out a policy on that to make sure it is clear (legal jargon anyone?). The key is in defining the terms and being consistent.

There are thousands of funds out there so I'm sure we'll miss many of them. However, the big ones (half a billion to a billion in assets) that fall I hope we catch.

Keep your ears peeled!

Oh and Hello Kitty - ponzi-implode is exactly what this is! Just a huge house of cards that, if allowed (and ultimately, no matter what), will totally fall to the ground.

Justin

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Justin @ Justin Owings dot Com @ The Mortgage Lender Implode-O-Meter
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HelloKitty
Dyn-o-mite!


Joined: 25 Jun 2007
Posts: 218

Re: question about how you are listing imploded HFs
PostPosted: Fri Aug 10, 2007 8:00 am Reply with quoteBack to top

Although there is another scenario of the counting: what about a bank that implodes 2 funds (you count as 1) then a month later they flush two more funds (still counts as one?)

I remember the first time I read about the yen carry trade my first though was this must end badly. My second thought was 'how can i git in on it!?'. hehe.

Keep up the fight Justin!
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