[lbo-talk] capitalism and collapse

[Tim Francis-Wright]

Dennis Redmond wrote:
> I'd caution LBO-sters against reading apocalypse in the death-throes of a
> few hedge funds, though. At most, we may see a $200-$250 billion bailout
> of selected mortgage lenders, and a nasty US recession. But it looks like
> East Asia and Europe have finally decoupled from the US - their trade
> links with their booming semiperipheries are large enough to mitigate even
> a severe American slowdown.
> 

I agree with this assessment in general.  I must say that the only
refreshing thing about the hedge fund death-throes was seeing Harvard's
endowment take a hit.  On the other hand, my state's pension fund
managers have already been burned twice and see nothing amiss.

--tim francis-wright

<http://snipurl.com/sowood>
Boston Globe, August 3, 2007

State pension officials say they will keep investing in hedge funds
despite up to $30 million in losses tied to the recent collapse of
Sowood Capital Management LP in Boston and $50 million in losses
associated with the meltdown of Amaranth Advisors LLC of Connecticut
last year.

Some pension systems could even increase their hedge fund holdings
under a regulator's decision last week that raised the limit on how
much systems can put into hedge funds as long as they spread around
the risk....

Sowood, a $3 billion Boston hedge fund founded by former money
managers of the Harvard University endowment, lost more than half its
value last month. On Monday, Sowood's corporate bond and loan holdings
were purchased by Citadel Investment Group LLC of Chicago. Harvard's
endowment lost at least $250 million on Sowood, and The Boston
Foundation lost about $18 million.