Hedge Funds

• Lost $350b in 2008, 90% of which was lost in Q4
• Shrank by 20% to $1.5t, from a peak of $1.9t
• Lost 12.3%, according to Eurekahedge, compared to a 13% gain in 2007
• Rose 1% in December

Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system. More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.

[…and further to the position of Hedge Funds and their brethren at the banks…]

Financial firms of any type whose failure would pose a systemic risk must accept especially close regulatory scrutiny of their risk-taking. It is unacceptable that large firms that the government is now compelled to support to preserve financial stability were among the greatest risk-takers during the boom period.

—Ben Bernanke at the London School of Economics – link