In theory, hedge fund investors should not panic when markets plunge. After all, the point of a hedge fund is to deliver returns whatever markets do. Nevertheless, the recent turmoil in Asian stock markets, which has seen shares in Shanghai, for example, halved in value in six months, does seem to have unnerved some investors in Asia-focused funds. The first three months of the year were pretty grim, according to figures from Hedge Fund Research published last week. Total Asian hedge fund assets dropped by 10 per cent to $100.3 billion in the first quarter of 2008 compared with $111.4 billion under management at the end of last year. HFR reported that, despite the weakness, investors continued to allocate capital to Asia, with more than $1 billion of new flows serving to partially offset the performance-based asset decline (compared with $16.5 billion globally). "The reason for these inflows is that a lot of the big hedge fund allocators are finally getting their heads around the idea of Asia as a place to invest," Douglas says.   more »

Crude peaked just shy of $128 per barrel, a record high and more than double the levels seen last May, before retreating slightly later in the day. Wyss said he believes between $10 and $20 in the price of crude is attributable to a bubble created by investors. “The balance of supply and demand shows that prices should go down, but the reality of Middle Eastern politics is that it could go anywhere” toward the end of the year, said David Wyss, chief economist at Standard and Poor’s. “I’ve heard people say $40 and I’ve heard people say $200,” said Wyss, who pegged his own crude estimate at $100 per barrel by the end of 2008. “You have people on both sides of this. Some say this is just a bubble, and you have people who say this is the reality, this is all the oil there is.” The world produces and consumes about 86.6 million barrels, or more than 3.4 billion gallons, of oil on an average day, according to the U.S. Energy Information Administration. The United States takes the biggest gulp, swallowing 20.8 million barrels. China, the next largest consumer, uses 8 million barrels, but that balance is shifting. U.S. and European demand has stabilized recently while China and India have seen near double-digit increases in their demand for the black fossil fuel as their economies expand and more drivers hit the roads. The supply of oil – the remains of prehistoric flora and fauna subjected to intense heat and pressure – has not keep pace.   more »