Speak of the devil, we just mentioned this potential for major weakness among funds with commodity exposure in our Goldman Sachs piece earlier today - the 1st half of 2008 was the worst in 20 years for hedge funds with July being a gosh awful month as many piled into a crowded trade. So a good sized fund named Ospraie is closing shop. I would not be surprised that some of today's selloff in commodities was Ospraie liquidating positions because once other hedgies get wind of a flameout they will short against those positions to squeeze the weak - call it Darwinism. Once more this highlights that "the efficient market" is nonsense in this day and age when huge pools of capitals entering, exiting, or in fact dying off are moving individual stocks and sectors far more than... ahem... fundamentals.

• Ospraie Fund, a big commodities fund partly owned by Lehman Brothers Holdings, is closing down and will return money to investors after incurring big losses this year.
• People close to the fund, which had nearly $4 billion in assets, said the losses resulted from bad bets in copper and natural gas, causing the flagship fund to lose 38% since the beginning of the year.
• The closing of the fund is a big blow to Lehman, whose 20% stake in Ospraie is part of the investment-management business that Lehman is shopping to help raise capital.
• "This is absolute shocker," John Kilduff, senior VP of Energy Trading at MF Global, and a CNBC contributor, said in response to Ospraie's closing.
• Kilduff said Dwight Anderson, Ospraie's founder, has a "great track record and is considered one of the smartest guys in commodity trading. He's highly regraded." (not to worry folks as I know many of you will lose sleep over the fate of Mr.