Hedge funds are supposed to be the ultimate diversification tool. The idea is that the returns post low/negative correlation with broad measures of conventional investing strategies and yet somehow manage to deliver positive returns when the standard strategies tumble. That’s certainly true some of the time for some of the managers. But expecting hedge funds writ large to deliver satisfaction is too often dashed on the rocks of reality. The notion of a hedge fund beta, in other words, isn’t all that attractive.

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The economic news this week focuses on retail sales (Wednesday), wholesale inflation, new jobless claims and industrial production (Thursday), and consumer price inflation and consumer sentiment (Friday). For a bit of context, here are some links that caught our attention…

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