A time of consolidation, such that hundreds of $billions of owners' capital has been (and is being) erased, is the time to regulate, in my view.

Does it really matter that this capital was once owned by wealthy persons or held in pension accounts for Mom and Pop?

I say that, regardless of who holds it or spends it, a Buck is a Buck, and that the money business, which affects 100-pct of us, is supposed to be regulated.

The fact it is for some people and not others is unacceptable.

HB&B will tell you regulation of this particular financial service is unnecessary, but how much of the People's capital can be skimmed by the casino before questions need to be answered? My concern is that, without regulation, who is compelled to say anything?

How do you solve a problem unless you get "full, true and plain disclosure" of the facts? The latter happens to be the very foundation of the capital market.

According to the WSJ, "more than 1,000 hedge funds have shut in the past two years; as ; concentrated bets ; have backfired. All this has set up the $1.23 trillion industry for its first meaningful consolidation, Wall Street executives say."

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This article needs to be read:

Hedge Funds

The Wall Street Journal says that as the Dow Jones Industrial Average climbs to record heights, many hedge funds are stumbling and more than ever are closing shop.

The latest to falter: Vega Asset Management. One of the world's largest hedge funds a few years ago, Vega has suffered losses from a bad bet against U.S. bonds, and is now down roughly 75% from its peak two years ago to about $3 billion in assets. The firm says it has no plans to cease operations.

New figures show that more than 1,000 hedge funds have shut in the past two years, as competition has squeezed profits. The Journal says that even some veteran managers, in a bid to boost returns, have made concentrated bets that have backfired. All this has set up the $1.23 trillion industry for its first meaningful consolidation, Wall Street executives say.

In just the past few weeks, Amaranth Advisors LLC announced plans sell to its investments after losing $6 billion, mostly in the energy markets, heightening the prospects it will close its doors. Narragansett Management LP in New York recently said it will return $800 million to investors. And two European-based hedge funds recently have told investors they are shutting down one or all of their funds.

Vega, which has offices in Spain, London and New York, managed about $12 billion a couple of years back and about $6 billion as recently as January. It once was seen as a winner in the growing popularity of hedge funds among large institutions.

Vega placed a big bet that the price of US, European and Japanese bonds would fall. However, the bond market has rallied sharply in recent weeks and Vega's largest fund, Vega Select Opportunities fund, which manages about $1.4 billion lost about 11.5% of its value in September -- much of it coming in the last week of the month -- and is down about 17.5% so far this year.

The Journal says that since January 2005, a total of 2,622 new hedge funds have been launched, according to Chicago-based Hedge Fund Research Inc., which compiles data on the industry. But 1,071 funds closed during that time. In 2005 alone, 848 funds closed, representing 11.4% of the funds in operation at the start of that year. This is more than double the closure rate of 2004, when 296 funds shut, or 4.7% of the funds in business at the start of that year.

Hedge funds have returned an average of 6.9% this year through the end of August, according to Hedge Fund Research's composite index. That compares with full-year returns ranging from 31.2% in 1999 to minus 1.45% in 2002. In 2004 and 2005, Hedge Fund Research's composite index returned slightly over 9% each year.

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