The big freeze in financing isn't over yet


If risk remains more expensive for lenders, leverage could continue to come down

By Michelle Celarier

Are hedge funds still on the brink of an ice age? That's what Donald Putnam, managing partner of Grail Partners, thinks. If the subprime crisis is an asteroid that hit the credit markets, as he suggests, it's the aftershocks that will cause all the trouble. "What killed the dinosaurs was the dust in the air starving the plants, which starved the herbivores, which starved the carnivores," says Putnam.

Of course, the food for most hedge funds