Hedge Fund Redemptions: Let the Bloodbath Begin

``Overall, the performance of hedge funds and fund of funds this year has been the most widely dispersed in six years. And, such dispersion is bound to cause redemptions. These redemptions cause hedge funds to sell out of their positions and raise cash. Increased selling in the markets can create increased volatility, in a time when we are coming close to testing historical levels of volatility. '' -- And now there is no short-selling to provide buyback pressure and volatility-smoothing.