Dire talk this spring of a systemic problem with hedge funds--on the magnitude of 1998's Long Term Capital Management crisis--has not played out in reality, many analysts say.
During the financial crisis of 2008, the problem for debt financing was the lack of available funds, i.e. the credit crunch.
Beyond the adequacy or otherwise of the funds' size, there is the problem of what they can be spent on.
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Their small size, combined with the extreme liquidity of large cap tech stocks, means that these funds have no problem getting in and out of positions.
Pension funds have the problem of having long-dated liabilities--in this fund's case, thousands of Ontario teachers whose retirements it must fund.
Importantly, it would reduce banks fear of the following problem: If funds are cheap only because the economy is poor then loaning money to young businesses is always a loosing proposition.
This creates additional pathways for the flow of ECB funds into the marketplace to address the problem and will also allow more time for the issues of solvency to be addressed as the collateral issues for capital tier ratios and Basel III still will persist.
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The problem is that the average return of those funds over the past year was a pitiful 0.02%.
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Yes, bond fund investors exacerbated the problem by piling in and out of muni funds at the same time.
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The problem with hedge funds is that a lack of information hinders outsiders' ability to measure their contribution to systemic risk.
And that's why we have a big problem with fees, we have a big problem with mutual fund governance, we have a big problem with mutual funds participating in the governance of our industrial corporations and other kinds of corporations in the U.S. They don't take the responsibility for ownership, because that doesn't produce any returns for the owners of the management companies.
Hawks at the ECB are already muttering about the problem of banks becoming addicted to cheap central-bank funds.
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Part of the problem has to do with the way hedge funds are structured.
It also has the potential to be a problem for funds like Fairholme that hold a limited number of stocks (FAIRX holds just 20 stocks and seven bonds), but you need consider the average volume of each holding (aka liquidity) before viewing a concentrated portfolio as a red flag.
The problem is shortage of capital investments as well as the inefficient use of funds.
In more recent years, the issue of predatory lending was identified by SRI funds years before the problem exploded in 2007, 2008, and 2009.
Part of the problem is that venture capitalists themselves are finding it hard to raise funds.
The problem with the Democratic plan is that it puts in motion the cutting off of funds for those troops who are in harm's way and it starts to tie the hands of those commanders on the ground.
The ability of mutual funds to attract investors even when they hold poor stocks is a problem for investors.
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Urahn says the problem has been exacerbated by the recession, which has cut into the value of state investment funds.
Owen, a money manager, hedge fund investor and the author of The Prudent Investor's Guide to Hedge Funds (Wiley, 2000), attributes a large part of the problem to the cult of relative performance.
In the case of California, an audit of international equity and debt holdings of CalPERS and other publically-managed funds would be prudent to determine if a significant problem exists and, if so, its dimensions.
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The fundamental problem that Mr Draghi faces is the acute divergence within the euro zone as capital flight sucks funds out of the periphery and into the core, making monetary conditions simultaneously tight and loose.
Apparently, fearing that addressing the problem means openly acknowledging it exists retailers are offering no guidance to the majority of their employees nearing retirement with limited funds.
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Finding fresh sources of new capital has become a vexing problem for many banks, mostly because previous investments from foreign sovereign wealth funds in major U.S. banks have lost value since the spring, making many players reluctant to sink more money into them.
The bigger issue is that poor countries, when it comes to access to funds, complain that they have been pushed even further down the global pecking order because of a problem that was not of their making.
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