International gamesmanship in this new era of hedge funds.

Stocks can't rise fast enough (hyper-inflation) to overcome the even more rapid decline in the value of the dollar.

Hiding One's Head In The Sand With a Hedge -- there is a special role of village idiot reserved for state treasurers.

"There is a dark side connected to financial integration. If shocks are large enough, the financial system becomes a risk-transmitter rather than a risk-disburser," said Nigel Jenkinson, a director of the Bank of England.

"We may have fewer systemic events, but they will be larger," he told a dinner at the Atlanta Fed on Monday.

Policy-makers want to pinpoint where the financial industry is vulnerable and, from the point of view of the Federal Reserve, how a crisis could spill over into the real economy and damage its goals of low inflation and sustainable growth.

Hedge funds, loosely regulated investment pools that use strategies, such as short selling and derivatives trading, that differ from those of traditional equity and bond funds, are increasingly getting the attention of the U.S. central bank.

New York Federal Reserve President Timothy Geithner warned on April 5 they had the "potential to magnify the impact of distress in those institutions on market dynamics and liquidity if counterparty risks are not managed appropriately."

One area of concern is the increasing volume of investment made in hedge funds by pension funds, which have traditionally relied on much safer, albeit lower yielding, investments.
[ Wall Street & Technology : Hedge Funds in View as Fed Ponders Systemic Risk (Reuters) ]