This is high compared with the 0.2 achieved by equities and the 0.5 achieved by US bonds since 1994. Admittedly, such aggregate return data need to be interpreted carefully.6 Nonetheless, the available industry databases are useful in identifying broad trends within the hedge fund industry. Hedge funds and market volatility Throughout the last twenty years, it has become conventional wisdom to associate hedge funds with extreme market volatility. The premise is that hedge funds push market prices temporarily away from their equilibrium, either in the short- or the medium-term. The traditional counter-argument sees hedge funds fundamentally as stabilizing market participants who identify arbitrage opportunities, take profits as these inefficiencies get eliminated and provide the market with liquidity. A survey of available analytical work suggests it is difficult to conclude that hedge funds decisively and adversely affect market volatility. This raises the question of whether direct observation of market price action can provide us with additional clues. One area worth examining is the macro and the managed futures segment of the hedge fund industry where recent inflows have been substantial. A number of markets that hedge funds in these strategies are typically engaged in have recently become more liquid as demonstrated, for example, by the increase in turnover and rise in non-commercial positions in the gold and oil futures markets (graphs 3 & 4). Market observations also suggest that many technically driven hedge funds appear to hold similar positions on the basis of trading systems, driven by related trigger points.
Accordingly, you have instructed the various appropriate authorities and bodies to combat it and reduce its effects on the society, while maintaining the momentum of development achievements. The package of the various procedures, introduced by the government at the beginning of this year, is an appropriate preliminary step aimed at addressing inflation sources that directly affect the society segments who are less able to bear its impacts. As for the monetary policy, the Saudi Arabian Monetary Agency (SAMA) has taken steps to control excess domestic liquidity by increasing rates of reserve requirements many times. However, because of the dominance of the fiscal policy over the economy, the greater burden falls on reviewing spending priorities and its programming to be in harmony with the absorptive capacity of the national economy and its ambitious development objectives. It is hoped that these procedures, along with reviewing the expansion in government spending, will achieve the targeted goals, and inflation will resume its pace and stabilize at appropriate levels in the near future. Custodian of the Two Holy Mosques, The world is experiencing a crisis that threatens economic growth and financial stability in several major countries of the world. This crisis has prompted authorities in these countries not only to take unusual measures to protect their financial stability but also to review their supervisory and control regulations of the financial system, while economic policies are being affected by competitive goals, namely, maintaining economic growth, controlling inflation and maintaining financial stability.