Ever noticed that the term “decoupling” is almost always used to describe a situation where one asset tanks and the other manages to hold up okay?   A couple of years ago, many assumed that Asian economies had decoupled from the US economy – in other words, that a downdraft or stagnation in the US economy would not be commensurately felt in Asia.

But no one seems to have commonly referred to the dot-com bubble as a “decoupling” of Internet stocks from the bricks-and-mortar economy and few described last summer’s oil or potash bubble as a “decoupling” from other assets.

So far in 2009, hedge funds seem to be holding up (i.e. flat) while equity markets fall off their bar stools.  In a new report, Credit Suisse describes this year’s performance as “continuing January’s decoupling trend from equity markets.”

In fact, this year’s performance has been so “decoupled” from equity markets that return differences in January and February (2 months) are enough to push the 36-month rolling correlation of hedge funds down about 10%. More…