LA Times – IT WAS SUPPOSED to be a summer of love  or at least of low volatility. Just two weeks ago, London hedge fund managers headed to the country for Hedgestock, a two-day event billed as “a Festival of Networking for the Hedge Fund Industry.” As at Woodstock, the Who topped the bill. The difference was that at Woodstock, the audience was high, whereas at Hedgestock, only their net worth was high.
The bigger the party, the bigger the hangover. By the close on Wednesday, there wasn’t a single stock market in the world that hadn’t fallen. Emerging markets, including Brazil, Russia and India, took the biggest hits. Along with China, these were supposed to be the BRICs  Big Rapidly Industrializing Countries. This month they dropped like bricks.
Developed markets also suffered. The Japanese and German stock markets were down nearly 10%. Oil, gold and other commodities also fell from their recent highs. On Thursday, to be sure, the markets bounced back. But on Friday, the rebound fizzled.
What on earth is going on? Less than two months ago, I was at a major hedge fund conference in Santa Monica where sentiment toward all asset classes  equities, bonds and commodities  was almost overwhelmingly bullish.
