Frenzied hedge fund selling erupts right before Fed raises interest rates
06/16/2022 // Kevin Hughes // Views

Hedge funds tracked by Goldman Sachs Group Inc. offloaded U.S. equities for a seventh straight day Monday, June 13, as the equity rout worsened amid concerns that the Federal Reserve will need to rush its inflation-fighting campaign at the risk of causing an economic recession.

Those concerns were not unfounded as the Federal Reserve on Wednesday, June 15, raised benchmark interest rates three-quarters of a percentage point in a move that equates to the most aggressive hike since 1994. Ending weeks of speculation, the rate-setting Federal Open Market Committee took the level of its benchmark funds rate to a range of 1.5-1.75 percent.

The dollar amount of selling over the last two sessions during the streak has exploded to levels not seen before, sending S&P 500 into a bear market. As stocks swayed and Treasury yields peaked, the fast money rushed to double down on bearish wagers.

The equity selloff gathered up momentum after the hotter-than-expected reading in consumer prices on June 10 dashed any hopes that inflation has peaked.

In a note issued Tuesday, June 14, Goldman said short sales at its hedge-fund clients rose "aggressively," with broad-based investing strategies or macro products dominating the flows.

"They're saying the market’s going down further. Sentiment is just pretty much in the toilet," said Benjamin Dunn, president of Alpha Theory Advisors.

At Monday's close, the S&P 500 slipped more than 20 percent from its January peak, reaching a bear market for a second time in as many years. The benchmark index dropped 0.3 percent in New York.


Three Arrows founder stirs fresh concerns with vague tweet

Meanwhile, a vague tweet by the founder of Three Arrows Capital, an influential hedge fund that has been liquidating crypto holdings as prices plummeted, has stirred fresh concerns in an already shaken industry.

"We are in the process of communicating with relevant parties and fully committed to working this out," former Credit Suisse Group AG trader Zhu Su tweeted from his confirmed account without giving additional details. Zhu and Three Arrows co-founder Kyle Davies didn't reply to requests for a comment.

Zhu and Davies are believed to be among the world's largest crypto holders and any signal of stress on their operations would be unwanted news for industry bulls. Three Arrows was evaluated in March to be handling around $10 billion in assets.

Three Arrows is known to hold stakes in a diverse range of different crypto assets, although information on its trading strategies is inadequate. It also owns more than five percent of the Grayscale Bitcoin Trust, according to the latest available regulatory filings.

Three Arrows is among the famous players in decentralized finance, a busy arena of digital commerce whose trademark is the use of cryptocurrencies as collateral for major loans and leveraged wagers. When the market goes through unstable periods and token values drop, those positions can be automatically paid in rapid succession, forcing hedge funds like Three Arrows to either spend more or face being annihilated.

Mike Novogratz, the billionaire founder of Galaxy Digital Holdings Ltd., stated earlier this month that he anticipates two-thirds of crypto hedge funds to decline during this market rout.

Crypto markets had already seen two prominent eruptions since early May, agitating an asset class that was under pressure from narrowing monetary policy. Initially, the Terra decentralized-finance ecosystem crashed when an algorithmic stablecoin that was a key part of it collapsed from its dollar peg. Nearly a month later, crypto lender Celsius suspended withdrawals on a platform where it gave high returns, mentioning a need to "stabilize liquidity."(Related: Bitcoin investors continue to take a bath as leading cryptocurrency tanks)

Three Arrows was among the financiers in a $1 billion sale earlier this year of Terra's Luna cryptocurrency, the sister token of the TerraUSD stablecoin that lost nearly all of its value in May.

Follow for more news about collapsing markets.

Watch the video below to know more about the massive hedge fund sell off.

This video is from The Patriot Streetfighter channel on

More related stories:

$25 billion hedge fund manager warns of catastrophic risk of EMP attack.

Florida hedge fund goes broke, loses $830 million in client money after Swiss franc fiasco.

Wall Street analysts: Fed to hike interest rates more aggressively in bid to address soaring inflation.

Cryptocurrency is a globalist scam for total control over the world's money, with total transactional surveillance.

Sources include: 1 2

Take Action:
Support Natural News by linking to this article from your website.
Permalink to this article:
Embed article link:
Reprinting this article:
Non-commercial use is permitted with credit to (including a clickable link).
Please contact us for more information.
Free Email Alerts
Get independent news alerts on natural cures, food lab tests, cannabis medicine, science, robotics, drones, privacy and more.
App Store
Android App
eTrust Pro Certified

This site is part of the Natural News Network © 2022 All Rights Reserved. Privacy | Terms All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing International, LTD. is not responsible for content written by contributing authors. The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. Truth Publishing assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms and those published here. All trademarks, registered trademarks and servicemarks mentioned on this site are the property of their respective owners.

This site uses cookies
Natural News uses cookies to improve your experience on our site. By using this site, you agree to our privacy policy.
Learn More
Get 100% real, uncensored news delivered straight to your inbox
You can unsubscribe at any time. Your email privacy is completely protected.