Say goodbye to leverage, for now


By Michelle Celarier

Does Federal Reserve chairman Ben Bernanke know something the markets don't? One might be tempted to interpret the September rate cut as a sign of desperation; few on Wall Street expected it to be so deep. Even though the stock market soared on the news, it seems a clear signal that things are worse than we thought and might not get better anytime soon.

Leverage is continuing to come down in the system, which could crimp returns for many hedge fund players, like highflying quants, for a while. Quant returns continue to be all over the lot,