Wildcats of Finance

Turning a Wrecking Ball into a Productive Vehicle

for Investors and Other Stakeholders

Wildcat groups such as hedge funds have played a growing role in causing or hiking blowups in the capital markets as well as the banking system. A showcase was the crisis of 2008, which ended up crippling the financial complex along with the real economy. The bombshell obliterated trillions of dollars from each of the major stock markets of the world, destroyed millions of jobs in sizable countries, and nixed trillions of dollars through lost output in the global marketplace.

This guidebook exposes the reality behind the illusion of profits in the hedge fund game. In plain language, the primer explains knotty issues like the following.

• Why do the hedge funds destroy wealth?
• How can the operators enrich themselves by delivering worse results to their customers?
• Why does the true performance of the wildcats remain hidden from view of the investing public?
• How do the custodians slash returns and hoist risk for their clients as well as the financial community and the entire society?
• Why will the crash of 2008 and the global recession in its wake show up repeatedly, and cause greater devastation, unless proper safeguards are put in place beforehand?
• How can public officials protect the stability of the markets?
• How could the economic liability of hedge funds be turned into a social asset?
• How can shrewd investors grow rather than wreck their capital?

The main audience for the book consists of active investors and earnest policymakers. Other types of readers include concerned professionals in the financial community as well as thoughtful observers in all walks of life.

Given the carnage to the real economy caused by reckless schemes in the financial sector, the message of this guidebook is in fact relevant to every member of the society at large.

Read more on Wildcats of Finance.



*       *       *

Armageddon in Real and Financial Markets - Regulation of Hedge Funds Driven by Speculation and Leverage

Hedge funds entered the public spotlight in 2008 for the dominant role they played in taking down the financial system and the real economy. The ensuing blowup was the greatest wipeout of wealth and the worst takedown of the global economy since the Second World War.

Until the financial crisis burst upon the scene, it was the stuff of sheer fiction to picture a single outfit or a small crew of actors that could tear apart the fabric of civilization as we know it. Yet the debacle of 2008, along with its aftershock, was the shot across the bow for a laid-back populace. On current trends, a calamity that lays waste to the trappings of modernity is not only possible but inevitable.

On the bright side, though, the outcrop of doomsday could be forestalled by a mere act of forethought along with the legislation to match. The fitting course of action would be plain, quick and wholesome.

On the other hand, the feat will be far from easy to pull off due to the mass of opposition from lobbyist groups. The sensible approach will require the courage of statesmen along with the backing of their constituents.

The recent crisis has shown that extreme levels of leverage can bring down the entire system of finance and economics. Thus far, the annihilation of wealth has amounted “merely” to trillions of dollars and millions of jobs in each of the major countries of the world.

Yet the carnage will not always remain so slight in the future. Whether the assailants happen to be hedge funds or other rabid players, it would make sense to defang the forces of armageddon before they have a chance to do some serious damage.

More on Armageddon in Real and Financial Markets - Regulation of Hedge Funds Driven by Speculation and Leverage.


*       *       *

Hedge Fund Regulation: How to Avoid a Boondoggle

The central role of wildcat outfits in causing or aggravating blowups in the financial arena has led to widespread calls for hedge fund regulation. Amid the furor, policymakers have responded in their usual fashion by cooking up legislation intended to curb the excesses that led to the wipeouts.

However, past experience suggests that the heap of regulations will merely serve to throw a monkey wrench into the machinery of finance. In that case, the main impact of the legislation will be a mound of paperwork and bureaucracy which does little or nothing to prevent similar fiascos in the future.

If the stumpers are to be tackled head-on, a sweeping change is required in order to blunt the threat of hedge funds armed with weapons of mass carnage. The purpose of this article is to lay bare the real problems along with a cogent approach to eradicating the bogeys.

More on Hedge Fund Regulation: How to Avoid a Boondoggle.

*       *       *