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Overview
Like the courtesans of a bygone age, hedge funds cater to the wealthy and project an aura of mystery and excitement. But as the Long Term Capital Management debacle showed, their activities affect us all.
Far from neutralising risk, as their name might suggest, some are simply vehicles for large-scale speculation - raiding currencies, disrupting bond markets, and embarrassing governments.
This book looks in detail at the secret world of hedge funds, how they work, the larger than life characters who run them, their private passions and the risks they run.
Synopsis
This book is about hedge funds, their influence on the global financial markets and how they affect us all. Hedge funds have come a long way since Alfred Winslow Jones first used them in the 1950s and '60s to reduce risk. Hedge funds today can wield immense power capable of disrupting the financial markets.
More alarming still is the hedge fund in your bank, epitomised by so-called 'proprietary trading'. Banks trade with, lend to, and mimic hedge funds in their own trading - generating fat bonuses for their managers. Customers rarely know, let alone are consulted about it. As with many other 'enthusiasms' to which banks have been prone, it may end in tears.
The book's controversial conclusion is that it is banks' exposure to hedge funds and their sometimes inept proprietary trading that needs to be regulated more closely. It is in the urgent interests of the global banking system as a whole, and concerns all of us.
Booknews
Reveals secrets behind the use of hedge funds and their disruptive influence on the global financial markets. Focus is on banks' use of hedge funds, with material on the character of hedge fund managers, how hedge funds work, and the different forms hedge funds take. Discussion encompasses arbitrage and techniques practiced by arbitrage specialists, and containment of the less desirable effects of hedge funds through risk management, disclosure, and regulation. The book's controversial conclusion is that banks' exposure to hedge funds and their sometimes inept proprietary trading needs to be regulated more closely. Temple worked as an investment analyst in fund management and broking for 18 years. He now writes on financial topics for a private investor readership. Annotation c. Book News, Inc., Portland, OR (booknews.com)