Hedge Funds Poised to Be Next Victims of Credit Crisis

Many players in the $2 trillion hedge fund industry could fall victim to bad timing and markets as yesterday’s market plunge coincides with today’s deadline for many investors to decide whether to withdraw before year’s end, the Wall Street Journal reports. Funds may be forced to sell off stocks today to compensate fleeing investors.

Such a selloff wouldn't allow stocks and other fund holdings time to recover, and funds would continue to lose value as more investors withdrew."There's going to be a death spiral for a number of these funds, and I don't think we've even begun to see the unwinding," said the president of one brokerage firm.