The subprime meltdown hits hedge funds
20070830 News overnight that a London based hedge fund and this morning an Australian hedge fund were hit by losses from exposure to the subprime meltdown in the US. We have been hearing from experts on how subprime mortgages form a SMALL part of the US economy, so the effects will be minimal. Well, it depends on which angle you are seeing it from. If you were the fund manager of these funds or an investor in the hedge funds concerned, then it is a BIG part of the economy. What is important is not the size of the subprime, but the possible effects it has on confidence, either in business or investment circles going forward. Will fears of a slowing global economy hurt expectations and outlook. Equity markets relay on confidence to enable bull markets. markets. One thing is for sure, with all these losses flying around, there is for sure somebody on the other side of the ledger, reaping the rewards.