The Financial Times reports that London's Plexus Partners $1.4bn flagship hedge fund is said to have lost more than a third of its value this year 'after arbitrage trades in the credit markets went spectacularly wrong'. The newspaper also reports that Russell Investments is to close two of its three main hedge funds (The Alternative Strategies Fund and The Alternative Strategies Fund 2), after assets fell below less than $2bn to a third of the level of only 6 months ago.

The Wall Street Journal reports that, according to The Office of the Comptroller of the Currency, US commercial banks lost $9.97bn trading cash and derivatives during the fourth-quarter, compared to the $2.3bn profit they made in the third-quarter. Trading revenue for all of 2007 fell 71% year-over-year, to $5.5bn.

Market data provider Lipper says that the average US equity fund fell some 10.1% over the first-quarter, the steepest decline since the third-quarter in 2002. The Dow fell 9.9% and the NASDAQ dropped 14.1% during the first-quarter.

Bloomberg reports that billionaire investor George Soros has said that we have probably not hit bottom yet and that the current stock market rebound is only likely to last a matter of weeks. Soros has described the current market turmoil as the worst since the great Depression of the 1930s. The news agency has also reported that US Federal Reserve chairman Ben Bernanke has said that his agency had no choice but to go in and help rescue Bear Stearns, as the alternative was a bankruptcy filing. Bernanke told a Joint Economic Committee of Congress Wednesday that the failure of Bear 'would not have been confined to the financial system, but would have been felt broadly in the real economy through its effects on asset values and credit availability'.

UBS has come out and said that Moody's Investors Services is the least accurate assessor of the risks of subprime mortgage securities, whilst Fitch Ratings is the best. UBS analysts also said that 'Fitch has been the fastest of the rating agencies to recognise and correct its subprime mistakes'.

Finally, Reuters reports that Lehman Brothers is mulling over expanding its operations in China, where it has only rep offices in Beijing and Shanghai. The Wall Street firm is said to be thinking through the possibilities and 'hatching' a few plans.

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