Friday, April 15, 2016

Rats are fleeing the sinking hedge fund ship.

Today we have yet another story where large holders of other people's money who have been desperate for yields and who have thus loaned their money to the highly leveraged, highly questionable hedge fund "industry" are now asking for their money back.  Why can hedge funds be wildly successful at times?  Well, most people think it is because they are the smartest guys in the room but history proves over and over again that their only "intelligence" was leverage.  They took on exceptional leverage at the right time (which is mainly a matter of luck unless you are using Elliott waves which they are not).  Case in point: LTCM. They almost brought down the entire global market place with their use of leverage on "kan't miss" models which they could not unwind in time before they collapsed.  So as smart as these guys thought they were and as smart as other people were duped into believing them to be, the end analysis shows that they were just con men.

This exodus from hedge funds is the start of a larger exodus from the markets in general.  The hedge funds are the marginal players.  They will be hit and they are being hit the first and eventually the whole "industry" will collapse because they add no real economic value to society, just as I have been writing for years.  We are seeing a run on the hedge funds and we can only expect the trend to increase until the collapse of the the big "investing" lie, which is that "your money can work for you", is fully understood by everyone.

Bye bye you disingenuous, greedy a-holes.  Now go out and get real jobs that actually add something to society.  Maybe become a trash collector or a shoe shine boy.

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