Saturday, March 15, 2008
HEDGE FUNDS NOW MOST IMPORTANT THING PEOPLE KNOW NOTHING ABOUT
HEDGE funds have overtaken the Big Bang as the most important thing people know nothing about.
As a massive American hedge fund faces imminent collapse, millions of people across the globe have found themselves panicking without the faintest idea why.
Tom Logan, head of markets at Donnelly-McPartlin, said: "This fund was over-speculated in long-term, prime-reverse wide-money.
"It could be devastating or it could be utterly insignificant. Would you like to buy a Range Rover?"
Wayne Hayes, 42, from Chelmsford, said: "I was saying to Geoff, I said, 'Geoff mate, this is the big one'. And he's like, 'why?', and I'm like, 'if you don't know, there's no point in me trying to explain it you'."
Meanwhile Nikki Hollis, 33, from Doncaster said: "It couldn't have been very strong. Did they get it from Homebase? I hope they managed to get all the little birds nests out."
Professor Henry Brubaker, of the Institute for Studies, said the confusion over hedge funds had arisen because many ordinary people were buying the Economist, but then reading it upside down.
He added: "Essentially, hedge funds are used to buy commodities like rice, jam, stock cubes and the like.
"When the stock cubes reach the agreed 'hedging' level the shares are transformed into something called 'double-bonded, hard-edged gilts' which then take on one and a half times their initial value for a period of around six weeks.
"After six weeks the buyer, or 'goose', can then hand them back or sell them 'up the chain'. If, at that point, the value falls, you become a homeless crack addict."