Hedge Funds Most Bearish Since 2009 as Global Equities Sink 15%

With Wall Street tanking for the fourth straight week, bearish wagers against global stocks at hedge funds have surged to the highest level since July 2009 as the European debt crisis and reports showing an economic slowdown cause the biggest losses in almost three years, Bloomberg says.

An index of hedge fund assets from International Strategy & Investment Group dropped to 45.8 on Aug. 16, showing the most short selling in two years, down from a 2011 high of 54.2 in February. The research firm and broker-dealer surveys 35 hedge funds with about $84 billion under management every week.

Professional investors are selling after the MSCI All- Country World Index dropped 15 percent since July 22 and the Standard & Poor’s 500 Index posted record swings. Equities fell yesterday after Lars Frisell, the chief economist at Sweden’s financial regulator, said it won’t take much for interbank lending to freeze, and data showed surprise, surprise that the U.S. economy is stalling…

Read more at http://www.bloomberg.com/news/2011-08-19/hedge-funds-most-bearish-since-july-2009-after-global-equities-retreat-15-.html