An anonymous London credit hedge fund manager, quoted in the FT:
"Every time you buy anything it is worth less the next day. Eventually you stop buying."
In theory, hedge funds, with their cash lock-ups and their higher risk appetites, should be first on the scene with rescue liquidity in the event of a credit crisis. But hedge funds mark to market every day, and if Fannie Mae bonds widen from 200bp over to 220bp over, that means investors are losing money, even if the bonds are a screaming buy at 200bp over. Which is why this crisis is going to take some time to resolve.