Third Avenue, founded by value investor Martin Whitman, said on Dec. 9 that it wasblocking clients in the Focused Credit Fund from pulling out its remaining $788 million in assets to avoid fire sales, so that the fund could be liquidated in an orderly fashion. “Unfortunately, the present environment has harmed our ability to successfully implement our strategy,” Third Avenue’s chief executive officer David Barse wrote.I've been getting bombarded with e-mails about this news story. Quite honestly I have no knowledge of Third Avenue, but the idea that a mutual fund would suddenly freeze withdrawals appears to be kinda spooky.
The move was unusual in the world of mutual funds, which are typically required to keep a portion of assets in highly liquid investments so they can meet redemption requests on a daily basis. The Focused Credit Fund, according to its prospectus, had the ability to “invest unlimited assets in below-investment grade credit instruments.”
What I do know is that oil prices have cratered and the oil producing states from the South, up to the Midwest and over to Alaska (including Canada) are in a hurt locker. Additionally the other oil producing nation states are hurting...Venezuela, Nigeria, North Africa and the Middle Eastern states are barely making it. I personally think we're seeing the bursting of an artificial "OIL BUBBLE" that was not acknowledged but mirrors the high energy rates being charged in California starting in 2002.
Last but not least, Carl Icahn is stating that this is only the beginning. Do your own research but something weird is going on with the economy...the world wide economy.