Monday, August 27, 2007

Just How Contagious Is That Hedge Fund?

HEDGE funds may well stay vulnerable to the kind of rapidly spreading losses that have been precipitated this summer by problems in the subprime mortgage market.

The fundamental problem is that even when hedge funds say they are pursuing entirely separate investment strategies, they often actually use common approaches, according to several experts. When one of these bets goes bad for one hedge fund, losses can result for many of them, disrupting the broader financial markets.

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