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#1
08-09-2007, 09:56 PM
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this is what happens when you chase a yield
http://www.post-gazette.com/pg/07217/807090-28.stm
An old trader friend that I know told me years ago that his #1 rule is to never chase a yield. Poor guy in the above link did that and got [censored]. Now its time for the hedge funds to face the music. 
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#2
08-09-2007, 10:16 PM
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Re: this is what happens when you chase a yield
?? This wasn't a hedge fund that went belly-up, it was a bank. He was parking his cash in a savings account, not chasing a rate.
I come from a working class family and really feel for this guy, but it is his responsibility to know how much of his money is insured. I'm not sure why you lay into hedge funds here, they don't seem to be a part of the equation at all.
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#3
08-09-2007, 10:35 PM
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Re: this is what happens when you chase a yield
Gonebroke2, did you even read the damn report? It was his SAVINGS ACCOUNT!!! Why are you so damn stupid??
I feel sorry for this guy somewhat, but if you don't understand how the FDIC works then it is no different then your auto, health or any other insurance. -Brendan
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#6
08-10-2007, 12:17 AM
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Re: this is what happens when you chase a yield
[ QUOTE ]
Gonebroke2, did you even read the damn report? It was his SAVINGS ACCOUNT!!! Why are you so damn stupid?? I feel sorry for this guy somewhat, but if you don't understand how the FDIC works then it is no different then your auto, health or any other insurance. -Brendan [/ QUOTE ] No I didn't read the report. I just post random comments with random links. You [censored]. I was just showing you one example of what happens when you chase a yield. He switched banks to make an extra few tenths of interest and he got [censored]. I am relating this to hedge funds because that is exactly what they did with the subprime paper. They chased high yield paper and now they are going bellyup. Over a trillion dollars are going to be lost.
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#7
08-10-2007, 01:16 AM
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Re: this is what happens when you chase a yield
[ QUOTE ]
[ QUOTE ] Gonebroke2, did you even read the damn report? It was his SAVINGS ACCOUNT!!! Why are you so damn stupid?? I feel sorry for this guy somewhat, but if you don't understand how the FDIC works then it is no different then your auto, health or any other insurance. -Brendan [/ QUOTE ] No I didn't read the report. I just post random comments with random links. You [censored]. I was just showing you one example of what happens when you chase a yield. He switched banks to make an extra few tenths of interest and he got [censored]. I am relating this to hedge funds because that is exactly what they did with the subprime paper. They chased high yield paper and now they are going bellyup. Over a trillion dollars are going to be lost. [/ QUOTE ] what % of that trillion dollar loss will be realted directly to hedge fund value losses on hedeg funds chasing yield like you said? and of that value loss, what % does that represent of the hedge fund industry (or even more narrowly, the losses hedge funds endure this year, 2007? )? Barron
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#8
08-10-2007, 01:38 AM
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Re: this is what happens when you chase a yield
[ QUOTE ]
I am relating this to hedge funds because that is exactly what they did with the subprime paper. They chased high yield paper and now they are going bellyup. Over a trillion dollars are going to be lost. [/ QUOTE ] Says who? For one trillion to be lost there would have to be in xcess of 10Trillion in subprime mortgages or $100k for each family in the us. And most of the bad loans written in 2006. Sounds unpossible.
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