Word: withdraw
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Dates: during 2000-2009
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Suppose some investors decide to withdraw their money from a hedge fund. The fund must liquidate the appropriate amount of its assets to pay these investors. Say the fund holds large positions in illiquid assets. The fund cannot immediately sell these assets, except at a fatal loss, so it would sell its more liquid assets. Given that the fund is more likely to inflate its estimation of the illiquid assets, it would seem that investors who withdraw early get the better returns over that time period. Sounds a bit like a Ponzi scheme, right...
...regularly liquidate assets, we would not see the spectacular returns reported in the past. One factor of the supposed success of hedge funds is their ability to report unrealized gains and to be flexible in liquidation, since investors who believe they are getting high returns are unlikely to withdraw their money. That was how Madoff was able to maintain his charade for so long...
Wonder why Chicago-based hedge fund Citadel is not allowing investors to withdraw their money until at least March? Citadel has already reported about 50% losses for its two largest funds. Remember: these are unrealized losses. If Citadel liquidated assets to pay out to investors, losses would be even greater. Barring a miracle, the first investors out would lose less than those going out later. But even in good times, the withdrawal of money from a hedge fund impinges its performance...
After stepping down, Yusuf was said to have retreated to his base in the semi-autonomous Puntland region. No one knows his next move. Ethiopian troops, who brought Yusuf into the presidential palace in Mogadishu two years ago, have announced they will withdraw from Somalia in a few days, and so far, there is no obvious candidate who could take Yusuf's place. Nor is there anyone considered powerful enough to united Somalia's ever-divided clans...
...with the Iraq's government gearing up to take the reins militarily in 2009, Iraqi officials across the political spectrum are seeing the glass as half full. "I assure you this number will drop sharply the moment the Americans withdraw their troops. That also goes for violence in general," says Ahmed Hassan al-Massoudi, a member of parliament aligned with radical Shi'ite cleric Muqtada al-Sadr. "I don't think 9,000 is a reason to worry, because you can see these numbers in other civilized countries," says Ahmed Bassam Mohammed, a police lieutenant and former member...