As we watch the market gyrate wildly back and forth seeking direction, it seems that hedge funds, the hired guns of the Wild West, are finding the action too exciting for their taste.
When hedge funds are backing slowly away from the table, mumbling about needing to go do something somewhere else for awhile, it means that the situation has become unpredictable and potentially dangerous.
Hedge Funds ‘Frozen in Headlights’ Cut Trading as Markets Swing
July 8 (Bloomberg) — Hedge-fund managers, Wall Street’s best compensated and supposedly smartest investors, are dazed and confused.
Reeling from the worst second-quarter performance in a decade, hedge funds have scaled back trading as they struggle to figure out where markets are headed amid sometimes vicious crosscurrents in stock, commodities and other markets, according to brokers and managers.
“There’s a degree of being frozen in the headlights, of not knowing what sectors to emphasize, of what securities to emphasize,” said Tim Ghriskey, chief investment officer of Solaris Asset Management LLC, a Bedford Hills, New York-based firm with $2 billion in hedge funds and conventional stock funds.
Hedge fund managers, who oversee $1.67 trillion in assets, are reluctant to put money to work as they are buffeted by a wide range of often conflicting political and economic forces, from fiscal policy in Europe and the U.S., to what regulations will be imposed on the financial-services and energy industries, to the growth prospects in China.
by ashvinp 
