Pack mentality grips hedge funds

Pack mentality grips hedge funds

Jan 14

Hedge funds are crowding into more of the same trades, the Wall Street Journal reports, amplifying market swings during crises. Such trading has stoked market jitters in recent months and helped to diminish the impact of corporate fundamentals on stock-market movements, the WSJ says. The paper cites research by MIT researcher and fund manager Andrew W. Lo, which shows funds have become more likely to lose and gain money together over the past five years. There is a roughly 79 per cent chance any randomly selected pair of hedge funds will move up and down in tandem in a given month from 2006 to 2010, compared with 67 per cent from 2001 to 2005

Goldman unveils new crisis losses

Goldman unveils new crisis losses

Jan 14

Goldman Sachs has revealed details of about $5bn in investment losses suffered during the crisis for the first time this week, in a move that will deepen the debate over companies’ financial disclosures, the FT reports. The figures, issued as part of internal reforms aimed at silencing Goldman’s critics, show that the bank suffered $13.5bn in losses from “investing and lending” with its own funds in 2008. According to City AM, the higher figure had always been present in statements but hard to find.