The dollar is being dragged down by continued speculation that the Federal Reserve will cut the key Fed Fund rate at its meeting on Wednesday.
Judging by the price of Fed fund futures, investors expect the federal funds rate to be as low as 2.25% by the end of the year.
The compromise is a fund fed largely by wage-based contributions, but with the option of a flat-rate fee on top.
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That means the Fed is on course to fund about 75% of our annual deficit!
Howard Ward, portfolio manager of the GAMCO Growth Fund, expects the Fed will eventually return to quantitative easing as a tool to support the economic recovery, but doesn't anticipate any move until after the November midterm elections.
Ten years ago this month, the New York Fed orchestrated the orderly unwinding of hedge fund Long-Term Capital Management, which foundered on exposures to Russian government bonds.
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Not long ago, hedge fund billionaire David Tepper indicated the Fed needed to taper its QE program in order to avoid a bubble in equity markets ala 1999.
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And, when the Fed talks of further monetary stimulus, they are telling fund sponsors that the subsidies may have to be bigger.
Fund managers and private investors that followed the Fed, ECB and BoJ this year, even as a top down passive investor, did well.
In a meeting at the New York Fed Monday afternoon, 17 commercial and investment banks joined three fund managers (including the Chicago hedge fund Citadel Investment Group) and trade groups to talk about ways of providing better disclosure of the over-the-counter derivatives market, which is part of the so-called shadow banking system.
By November 2007, when the narrative ends, it was already clear to Mr Morris that this crisis was much more serious than the last big crunch, the 1998 Russian debt default and the bail-out of Long-Term Capital Management, an American hedge fund, by a group of banks under the Fed's direction.
But ten years ago the Fed helped organise the rescue of Long-Term Capital Management, a hedge fund (although no public money was involved).
When the Fed speaks of keeping rates low through 2014, they are telling money market fund sponsors that they will have to continue to subsidize their funds for at least 2 more years.
PIMCO, a bond fund-management firm, reckons that this was a hint that the Fed chairman would try to keep house prices rising, come what may.
Hedge fund zillionaire Paul Singer is super-mad at the Federal Reserve and Fed Chairman Ben Bernanke over inflation they have not yet quite unleashed.
And so the rising tide money the Fed supposedly creates inflates asset prices in such a way as to make an index fund vastly preferable to a hedge fund.
Together, the MBS and Treasury holdings account for 87% of the fund, reflecting Mr. Gross's belief there will be further Fed stimulus, probably a new bond-buying program, that could bolster bond prices.
It's one thing for the International Monetary Fund and the Organization for Economic Cooperation and Development to warn, quite another when the Fed actually does something about it.
In a brief interview, the older Mr. Bent said it is "very, very amusing that no one from the SEC, no one from Congress, no one from the Fed ... has called to ask me about anything" related to the proposed money-fund rules being weighed by the SEC.
Only last autumn, the Fed had to save world finance by masterminding the rescue of Long-Term Capital Management, a hedge fund, and cutting interest rates three times.
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