Morgan Stanley's Robert Feldman had an untimely title for his Friday post: hedge funds like Japan. This is undoubtedly true, though heaven only knows why. Meantime in Germany the headline would probably have been: Germany Doesn't Like Hedge Funds. And again heaven only knows why :). The German situation has all the hallmarks of a huge storm in a tea cup with forthcomg elections as a backdrop. The FT reports that Schröder has ordered a thorough review of hedge fund activities:
"Gerhard Schröder, German chancellor, on Friday ordered a government review of controls on hedge funds, saying he might consider imposing tighter curbs after foreign investors helped topple the management of Deutsche Börse, the German stock exchange group.
The chancellor had ordered three ministries to mount a co-ordinated review “to achieve, where necessary, more transparency, and where possible, tighter controls”, his spokesman said."
More transparency, well there's nothing in principle wrong with that, but it will be interesting to see what the review actually comes up with.
Rather unsurprisingly:
Hedge funds reacted angrily to the review. “This whole debate is crazy, groundless rubbish,” Achim Pütz, chairman of the Bundesverband Alternative Investments said.
and perhaps more to the point:
"Senior officials in Berlin hinted the chancellor's intervention was aimed at rallying SPD support for the regional election in North Rhine-Westphalia next weekend. “This is really about politics,” said one."
It might be worth bearing in mind that hedge funds do also lose money from time to time.
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