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« Forecasting Unlikely Events | Main | Updating the Market Perspective »

August 13, 2007

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Hedge Fund Consultant . Richard Wilson

Maybe we could link up some of our blog content to provide more comprehensive information on hedge funds for investors? If you want to chat my email is Richard@RichardCWilson.com.

- R

Aaron

Very interesting article. I completely agree that the perma-bear sites are out in full force now with all of their end of the world economic insight projections. In this market, a lot of people seem to listen to them too. I agree that a recession is less likely than most believe.

Bill aka NO DooDahs!

Thanks for the link love! No "Piled High and Deep" jokes ...

About temporary liquidity (properly defined as money flowing through a market and not as "money supply" LOL) lapses and "mark to market," some thoughts.

Buy and holders of bonds don't care about the quote or the market for the bond as much as traders do; they're in it for the yield. Now, the auditor is gonna want the company to get a bid on inventory every once in a while, and will appreciate if they go out and hit the bid a few times a year, but otherwise, they want yield.

Some hedgies playing the yield game may recognize the mark to market in a low-liquidity sitchooayshun will result in paper losses for the fund. When a market returns for the bonds, the mark to market will be UP. So what to do?

That hedgie might choose to recapitalize the fund until such time as the market returns to normalcy.

Does this sound ... familiar?

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