Hedge fund performance was certainly bad, but it was still not as bad as the stock market's performance this month.

And you may not have any sympathy for the wealthy hedge fund investor, but high net worth individuals are becoming increasingly smaller parts of hedge fund investment bases in favor of pensions, endowments, unions and other large institutional players investing on the common person's behalf. We are all hedge fund investors!

Slightly off topic. Is Krugman likely to get Nobel this week?

re: "they employ borrowed money to purchase whatever it is they currently own"

Seems like a perfectly sound financial system, to me.

It's the leverage. Leverage has been creating paper millionaires, and in some cases billionaire, for decades. And it's just that. Paper. The trouble is that some of this phoney wealth gets spend and borrowed against. Leverage on leverage. Leverage on real assets is one thing. All home loans for instance will not go into default. But as any programmer will tell you, if you use a recursive routine you'd better write some limits into it or you're going to crash your system.

Official says pension funds are down $2 trillion

WASHINGTON - The top congressional budget analyst says pension plans have lost as much as $2 trillion in the past 15 months.

Peter Orszag told a House panel on Tuesday that the losses are likely to force many workers to hold off on major purchases and delay their retirements.

http://tinyurl.com/4xbj3w

Good thing the Fed is going to lend money directly to corporations, so that they can continue to make junk no one will be able to afford to buy.

For a minute there, I was worried.

Well, how leveraged ARE they? I've heard figures up to 28 times. I.E., their debt, when called, cannot be recouped.

The world financial economy (Russia has joined the destablized capitalist world unfortunately)is in debt to each other, perhaps over their heads. China might form a pillar of financial stability, if capitalist debt/ leveraging/ derivatives havn't made sufficient inroads into their economy. From what I hear, they are not heavily 'leveraged,' which could be a blessing. Ironic that only the planned part of the massive Chinese economy might withstand the debt crisis. Cuba is not in too much trouble either.

As friends of mine used to say, the planned economies actually provided stability in a world dominated by capital. Of course, 1989 counter-revolutions in Eastern Europe and Russia enabled the 'destablizers.' The imperialists were "dizzy with success." Reap the worldwind, folks.

Did you/Krugman really mean "levered" or "leveraged"?

The question is more can we survive world finance?

At this rate, I'm thinking we've got our first massive global crisis on our hands thats in-your-face (as opposed to global warming, whose subtleties and deniers complicate the issue). This is not American, EU, Brazilian - this is ALL of us being tested.

If we can pull out of it one way or another, it'll be a very different world. The change and challenge may be a learning experience.

If not . . .

So I've been pretty much keeping an open tab in my browser with finance.google.com open and refreshing periodically for quasi realtime quotes. Its pretty slick, etc.

So i was messing around with the time line (when you click on the DOW icon, it takes you to a graph that you can specifiy timelines to view). I expnaded the timeline from 1985 through the present. Its an interesting slow upward curve up until about 1995ish when you notice a higher uptick and then the acceleration went up until 2001ish, dropped a bit then continued upwards and now its sliding back down to where we were in '03ish.

What i find interesting is when i look back at 1995 (i was 15) the down was a little over 4k. In about 13 years it shot up roughly 10k. if it were to go down to a 5-6k range there would be some MASSIVE panic. it would be seen as the apocolypse, great depression, etc.

But what makes me think to myself, what has all the wealth of the past 13 years really gotten us? I dont feel any more wealthy than I was back then (i was a teenager and my parents were doing well). i had clothes, games, food, house, computer, etc. The market was in good shape then or so it seemed in retrospect.

WHat is so fundamentally wrong with all this going down another 30%? What are we ultimately loosing? And why if we were stable in 1995 at such a low DOW why can the same be true today. Granted we'd have a weeding out process of the fluff, but what is fundamentally wrong with being below 10k on the dow?

Great, we all have to learn Portuguese.

I think your question translates this way:

"Seus netos trabalham para uma râ preguiçosa para baixo pelas docas que empilham pneus."

But I just started studying the language an hour ago...

Iceland nationalized their second largest bank today with a sweetheart loan from Russia.

Deixa de ser preguicoso e vai trabalhar, vovo!

Um...well, I might have got that wrong, btw. I'm sure there was nothing in the original translation request about tires or frogs.

But hey, they've got over 10,000 fucking intransitive verbs! And not a single word for "doggone".

Thanks, but Grandpa just keeled over when he realized that most of the money he invested for his retirement has evaporated, and the remainder will shortly be useful only in the bathroom.

And we long ago had our first (but not only) dictator: Richard M. Nixon. Did you like what went on then? Did you think the Reagan years worked for you? Were you happy when Bush I took the reins, on behalf of Big Oil and the CIA? Then the last 8 years were probably not a surprise. But if you weren't a part of "THE CLUB," why are you smiling? Maybe you're an officer at AIG.

There is nothing wrong with global interdependence. The only problems are selfish individual country's policies, market manipulation and lack of transparency that have contributed to the global debacle.