Economists debate about the great recession of 2008 is on the way to go for another round or if it is about to slip into 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, 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 variations of the lovely element, if it is in the form of ETFs, mining company shares or bullion itself, although some of their effect 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 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 (+ 0.7%) 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.
It is, of course, the housing market, which, after a slight increase on the back of a tax credit for first time home buyer, took a horrifying dip in July (tax credit 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, the famous "flash crash" on May 6, the Dow Jones Industrial average is rather left around 10,000 as it climbed out of the stagnant in November 2009. But each time it fell below the magical six-figure numbers, there was a hue and cry about double-dip recession, every minute is now, just around the corner, can see it coming into focus in the near future ... Oh, not so much?
What Amuses The Shadow in all this are some of the whining from the hedge fund industry on how tough it is to monetize "those markets" and "in these economic times."
Whatever happened to "uncorrelated?" What happened to "alpha?"
Most important, whatever 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 more than entitled to time with his family and his charity after 30 years in the industry, were his reasons for getting that he did 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 on 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 just that, or if another year (or two) is added to its title, hedge funds should be out in choppy water, swim against the tide, earn money for their investors and hedge risk.
The views expressed in this column do not necessarily reflect the views of HedgeFund.net.
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