I can come up with my own narrative, of course my current favorite being that ultra-big companies have such liquidity they fall prey to macro trading in commodities, Forex and whatever scheme needs a hedge or arbitrage to trade against but that is just an idea.
We are already in desperate need for a hedge against what I call micro-singularities, in which a viral event can suddenly transfix billions of Internet users, threatening to choke the entire system in the process.
But many Republicans in Congress say more F-22s, which were designed for aerial combat, are needed as a hedge against countries like China.
The "war reserve" is needed as a hedge just in case Russia decides to rekindle the nuclear arms race -- a sacrosanct U.S. policy based on the logic that the winner of a nuclear war is the one with the most left over.
So although I am an unashamed fan of emerging markets, I can't help but think that you need an effective hedge if you're to increase your exposure right now.
You don't need to be a hedge fund quant to see the conflict of interest: the more ratings, the more profits to the ratings agencies, so the temptation is to be extra lenient.
Before the announcement by Mr. Gates, both had fought hard for the F-22, saying the Air Force needed it as a hedge against Russia and China and even a possible war with Iran.
Warwick stresses that the hedge doesn't really need to be literally a hedge.
In fact this is not quite true the amount you need to invest in a hedge fund is coming down every day but it is mostly true.
Yet even though many inside and outside Japan recognize that Sony's divisions need some shaking up, a hedge fund manager like Mr. Loeb may not be the one who is ultimately successful.
To do all this, however, a hedge needs to be well managed; thick, bushy, vigorous.
