Redemption Day

Nov 15 was Redemption Day - the last day of a two week window (Nov 1-14) that traditionally many hedge funds established to allowed clients to redeem funds once per year.

It is anticipated that a tsunami of selling will hit the markets next week (although, assuming that indications have been streaming over that time the funds could have been pre-positioning for liquidation of their portfolio holdings.) It doesn't help that the Auto sector is on the ropes and that Congress will soon retire and not resume until after Obama's Inauguration on January 21, 2009.

Some pundits believe this will mark the bottom to the selling panic. I believe this is close to the mark, but to re-phrase Churchill "It is the end of the beginning, not the beginning of the end"1.


Footnotes:
1) Actual quote "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." from speech given after the British victory over the German Afrika Korps at the Second Battle of El Alamein in Egypt (1942-11-10). My father was actually wounded in the preparations (May 1, 1942) to the First Battle of El Alamein (July 1-27, 1942) after running over a land-mine on his motorbike. He was in the reconnaissance group at the time but he never gave me an idea what he was doing at the time. In fact he avoided speaking about his wartime experience except to sadly note how many of the men in his platoon went on to die while he had lived, which I always attributed to a survivors guilt or perhaps some embarrassment about how a stupid mistake may have led him to drive over a land-mine.