Anatomy of the EU Economic Crisis – Hedge funds and their Activities in the European Context

If a business risk hedges, which means tha cheap nfl jerseys t instead of concentrating its investments in a unit which has two or more adverse situations to a destination for investment is not necessarily a loss from the end. Financial companies often decide on a specific event can happen if real life can have an event that is important implications for your portfolio or group of assets they cover. What are hedge funds?

Hedge funds are financial institutions that have more to do with short-term rather than long-term investment. On the assets of hedge funds may initially shares, bonds or cash to be cold in the light. One is to do something that they, hedge funds differ from other companies - the sources of assets are generally very rich people and large companies

entities.

Why do they have to be so elitist?

One of the biggest obstacles that large, publicly-traded corporations face is government laws o regulation. Because of the latter, they cannot engage in relatively high-risk activities such as short-term speculation. However, since hedge funds are owned by a limited number of individuals (less than 100), they can easily go under the fiscal radar. In essence, they took advantage of a technicality.

What is the problem then?

Unlike corporations which are divided into tons of corporate stocks, if a hedge fund's portfolio actually fails, only a few individuals are affected at first glance. However, the definition of an individual in economic terms is different from that of everyday life. A single pension fund, a large bank, or some other holdings company also count as one single individual.

Thus, when a hedge fund fails, even if it says in its books say that the affected are few, the loss will still have a cascading effect on the subsequent stakeholders of its investor-companies. In a pension fund for example, regular individuals risk their life's savings on a 401(k) plan, only to lose it due to a nfl jerseys faulty investment strategy – and they number to the tens of thousands.

The problem: Adding Greece to the equation.