Volitilty exploded across the board in October, but particularly in equities after the passage of the Troubled Asset Relief Program or TARP. Tom Sowanick, chief investment officer for fund of fund Clearbrook Research, gave his take on the current market turmoil at an Oct. 6 panel on alternative investments. Sowanick said demand for alternatives will not go down but expects the use of leverage will go down. "The prime brokers that are left will not be able to take on more leverage because they are commercial banks, not investment banks. The lower use of leverage by banks will also curtail the use of leverage by hedge funds," Sowanick says.
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