Wow!  That’s all I can say over the past day.  The government swung and swung big.  I am least suprised by Short Selling Disclosure and the creation of a “no borrow” list.  In light of the seizure of the credit market and redemptions in Money Markets on Tuesday and Wednesday mornings it is no suprise that someone had to swing for the seats. 

The first question that came to my mind is “Who is going to pay for all this?”  Now after some time to think, it is starting to be clear that the next domino to fall could be many Hedge Funds themselves.  The risks are still very high for lots of reasons – redemptions, writing CDS contracts, horrible YTD performance, and now limitations on short-selling that could take down arbitrage, long-short, and short-biased strategies.  The next few weeks should be interesting.

I will be publishing a summary of the new SEC requirements for disclosure of short-positions…..stay tuned.