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Guest The_Oldie

Absolute Capital Hedge Fund Suspends Withdrawals

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Guest The_Oldie


July 26 (Bloomberg) -- Absolute Capital Group Ltd., an Australian hedge fund that invests in collateralized debt obligations, suspended withdrawals from two of its funds after forecasting losses amid a rout in U.S. subprime mortgages.
Buyers Vanish

Almost 40 companies have reworked or abandoned debt offerings in the past three weeks as after struggling to find buyers. Federal Reserve Chairman Ben S. Bernanke said July 19 there will be ``significant financial losses'' from risky mortgages, pointing to estimates as high as $100 billion.

Bear Stearns Cos., the fifth-largest U.S. securities firm, on July 18 told investors in its two failed hedge funds they'll get little if any money back after ``unprecedented declines'' in the value of subprime mortgage securities.

Investors earlier this month were demanding an extra 10.5 percentage points in yield over benchmark rates to own some of the lower investment-grade rated parts of CDOs, up from about 3.1 percentage points in July 2006, according to data compiled by Morgan Stanley.

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"Hello, I would like to make a withdrawal please."

"Sorry, you can't". ::click::


It's like a run on the bank. Let's hope it never extends to the banks :lol:

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