SDI Debate Hedge Funds Updates

KARAM
Unique Link - Hedge fund investors predict a small decrease in oil but a massive decrease
in oil prices will devastate hedge funds
Davies ’08 (Nigel; Reuters; Hedge fund chiegs look to global macro funds in difficult market; July 22, 2008;

Managers in the survey said investment diversification, taking short positions in financials - meaning bets that
they would fall further - and any allocations to energy-related sectors had helped portfolios this year. They have
also held high levels of cash. Oil prices rose from around $115 a barrel at the time of April's survey to more than
$147 this month. They have since fallen back to about $130 a barrel.

The credit crisis has been a bruising experience for hedge funds, and for many banks. Shares of the Swiss
financial heavyweight UBS have plummeted 53 percent so far this year. But the crunch has also offered up
investment ideas.
SDI Debate Hedge Funds Updates
KARAM

A2: HEDGE FUNDS

Non-Unique: High oil price perceptions will cause people to sell against hedge funds
Star Times ’08 (Jot money, rampant oil; July 20, 2008; http://www.stuff.co.nz/sundaystartimes/4623171a6445.html )
But while attention focuses on pernicious market activity the big question is still out there - what if the oil price really is
driven by fundamentals? Market sources are reluctant to go on the record but criticism of Masters' views is not hard to
find. "If the oil price was so out of whack with fundamentals," said one, "eventually you're going to have speculators and
hedge funds, anybody with the capital and courage, to come in on the other side and sell against it."
SDI Debate Hedge Funds Updates
KARAM

Oil markets are not going to crash hedge funds

Emori ’08 (Tetsu; Fund manager at Jay Hawk Resources LLC; 2008;
http://www.jayhawkresourcesllc.com/about_jay_hawk_resources_llc.html )

The phenomenal rise in oil prices show signs of a bubble, but a crash is not imminent, billionaire hedge fund manager
George Soros told U.S. lawmakers on Tuesday. "We are currently experiencing the bursting of a housing bubble and, at
the same time, a rise in oil and other commodities which has some of the earmarks of a bubble," Soros said in prepared
testimony before the U.S. Senate Commerce Committee. "To be sure a crash in oil markets is not imminent."
SDI Debate Hedge Funds Updates
KARAM

Link Turn – lower oil prices will help hedge funds

Marron ’08 (Jessica; Gas Market Report; July 11, 2008; Masters' hedge fund stands to profit if oil prices decline,
economist says; Lexis)

Masters, in an interview with Platts, defended his firm's holdings and did not deny the hedge fund's portfolio would, in
fact, benefit if oil prices declined — but so would the holdings of many other investors as well.

"I think every American would make out well in case oil prices come down," he said. "It will not only help us, but it will
help the economy and will help the stock market."
SDI Debate Hedge Funds Updates
KARAM

Link Turn – Increasing alternative fuels will help hedge funds

Orol ’08 (Ron; Daily Deal/ The Deal; Paulson won't blame speculators; Lexis)
Other critics, including hedge fund billionaire George Soros and former CFTC official Michael Greenberger, argued that
speculators are contributing to a dangerous oil price bubble that could wipe out huge investment sums if it bursts.
According to the Energy Information Administration, the national average price of gas is about $4 a gallon.

But Paulson downplayed concerns about energy speculation, noting that both the Treasury Department and CFTC were
continuing to study the energy market. He disputed the notion that oil market speculation was a key driver in rising energy
prices by comparing that industry to other commodities with recent price hikes, including iron ore and steel, which don't
have financial markets.

Paulson also blamed a lack of oil production increases in recent years, a shortage of inventories and a trend of other
countries nationalizing their energy sectors. "With nationalization in many countries, you don't have the investment you
need, and you need increasing investment in production in alternative fuels," Paulson said.