Cramer Blames Hedge Funds For Late-Day Volatility

Oct 24 2008 | 12:35pm ET

One former hedge fund manager is laying the blame on hedge funds for late-day market volatility.

Jim Cramer, host of CNBC’s “Mad Money”, told viewers yesterday that many hedge fund strategies have been dead wrong, such as the betting on a Chinese recovery after the Olympics, TheStreet.com, which Cramer co-founded, reports. Cramer used the Baltic Dry Shipping Index and the Shanghai Composite Index to illustrate how much China's economy has slowed since the big show under the Bird’s Nest ended in August.

The result of hedge funds gone bad is forced selling, he said, and at around 2:45 p.m. each day, hedge funds begin preparing for the next day's round of redemptions by liquidating their ill-conceived positions.

“These funds are getting killed,” he claimed.

The vociferous Cramer also blamed fund-to-fund managers for pressuring their underlying funds for immediate redemptions, forcing managers to think only for the short term.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note