The next shoe might be a bucketful

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The mark-to-market accounting that has caused Wall Street so much grief this year is coming to hedge funds in 2009

By Irwin Speizer

When the plunging value of subprime mortgages caught Michael Vranos short last year, investors began lining up to get their money back from his Ellington Capital Management. Vranos responded by halting redemptions, arguing that the mortgage-backed securities he held were too difficult to value.

Vranos and other hedge fund managers won't have the luxury of taking a flyer on current fair-value assessments much longer. The new accounting rules that