Economists debate about the great recession of 2008 is to go for another round or if it is delayed in the history books.
You can see them lining up on both sides of the recession, closely followed by investors and, of course, politicians.
Nouriel Smirk, his gloomy prognostication and hard partying ways, is convinced that a double dip just around the corner. Oh, okay, he is 40% convinced, but it remains very high.
Then there are Ross DeVol, the Milken Institute, which has made his case for a moderate and sustainable recovery.
Gold afiocionados and hedge fund managers, John Paulson, Eric Mindich, David Einhorn and George Soros have all loaded up on variants of beautiful element, if it is in the form of ETFs, mining company shares or bullion itself, even if some of their reasoning on that particular play is murky. Is it because of inflation, or is it that when everything else is heck around you, you just want to hang on to something that has a nice heft to it?
The latest figures are not doing too much for the crystal globe gazers after long hot summer: the number of long-term unemployed (those jobless for 27 weeks or more) reduced the 323,000 in August, although the overall unemployment rate remained much the same of 9,6%. Total business sales were up to $ 1.09 trillion (budget day goal%) in August, while new orders for manufactured goods also increased 0.1 percent to 409.5 billion dollars. Retail trade and food services saw a small check-up (0.4%) to 363.7 billion dollars.
There are, of course, the housing market, which, after a slight increase on the back of a tax credit for first time home buyer, took an alarming dip in July (tax credits expired at the end of June). Sales of new homes was down 12.4% to 276,000.
Then there are those markets that aims to bedevil all and sundry. In addition had the famous "flash crash" on May 6, the Dow Jones Industrial average, fairly constant around 10,000 as it climbed by stagnant in November 2009. But every time fell during the magical six-figure numbers, there was a hue and cry about that double-dip recession, every minute is now, just around the corner, can see that it comes into focus in the near future ... Oh, not so much?
What Amuses The Shadow in all this is some of the hedge fund industry going from whining about how tough it is to monetize "those markets" and "in these economic times."
What happened to the "uncorrelated?" What happened to "alpha?"
Most importantly, what happened to "secured"?
Stanley Druckenmiller, one of the most famous managers, who worked with George Soros, when he made his winning bet on the British pound, closed his hedge fund Duquesne Capital Management. While the man is only right that time with his family and his charity after 30 years in the industry, were his reasons for getting that he does not like the stress of trying to navigate today's markets.
There is no doubt that times are tough. But is it not what hedge fund industry was born to do--take the risk of greater yield, but at the same time, to keep the hedges in place so that the risk would be handled correctly?
The great recession of 2008-2009 goes into the history books as only the, or if another year (or two) is added to its title, hedge funds should be out in choppy water, swim against the flow, make money for their investors and hedging risk.
HedgeFund.net views do not necessarily reflect the views expressed in this column.
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