Investment banks raising margin requirements on lending to hedge funds -- Forbes, with a comment

Consider this an editorial. I mean, even more so! This is good news. Almost anything to rein in the hedgies, in their reckless attempts to profit by screwing up the financial markets for everybody else, is good news. You have to wonder how much of the current market decline represents the efforts of hedge funds to massively "attack" the financial markets. Who knows?

What else would be good? One thing would be rules to stop naked short selling. Perhaps a rule requiring the shares to be sold short to really exist, on pain of prison. The possibility of a more restricted definition of "accredited investor, as the SEC has been mulling, would be a big plus. Getting radical here, how about a rule allowing the prime brokers or other lenders to hedge funds no higher standing than the investors, or even making them jointly liable to the investors in the fund, if a fund blows up? Or making the fund's owners personally liable if there was wrongdoing involved. Yes, that's radical. We can dream.


Investment banks raising margin requirements on lending to hedge funds - report - Forbes.com