NEW YORK // Fallout from the financial crisis has cost the hedge fund industry US$100 billion (Dh367bn) and left US car makers needing $50bn to stave off bankruptcy. Investors withdrew $100bn from global hedge funds last month, according to the Singapore-based research and publishing company Eurekahedge. Funds fell an average 3.3 per cent last month, based on preliminary figures from the Eurekahedge Index, which tracks the performance of more than 2,000 funds that invest globally.
The $1.7 trillion hedge funds industry has been hit hard by the biggest market downturn since the 1930s Great Depression. To underline the depth of the problem facing world economies, the US president-elect Barack Obama has urged Congress to approve up to $50bn to save the cash-starved car makers. Mr Obama's economic advisers are convinced that if General Motors (GM) does not get a financial lifeline, it will have to file for bankruptcy by the end of January.
The president-elect also wants the Federal Reserve to extend emergency loans to GM, Ford and Chrysler, according to aides who spoke on condition of anonymity. The failure of those companies would also put at risk parts-makers, dealerships and suppliers. "The auto industry is too big to fail," said Nariman Behravesh, the chief economist at IHS Global Insight.Mr Obama has repeatedly insisted there can only be "one president at a time", and is sending two representatives to this weekend's Group of 20 Summit in Washington rather than attend himself.
Shares of the biggest US car maker reached a 65-year low this week. "We're not being prescriptive in what would be acceptable in terms of the loans," said Tony Cervone, a GM spokesman. * with Agencies
