The bear market has taken its toll on hedge funds so far this year. In the first half of ‘08 average hedge fund performance was a negative .75%. This from Bloomberg:

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Jason Simpkins at Money Week provides some more detail on yesterday’s gloomy data releases…

Home prices as measured by the S&P/Case Shiller composite index of 20 metro areas fell 1.4% in April from March and slumped by a record 15.3% over the year. The group’s composite index of 10 metro areas dropped 1.6% in April, making for a record 16.3% annual drop.

According to the S&P, 13 of the top 20 metro areas are still posting record annual declines with price losses in the double digits for half of the areas.

“The potential is a vicious cycle which we may already be experiencing. Falling home prices are leading to more foreclosures, which cause a further decline in prices,” Richard DeKaser, chief economist at National City Corp. (NCC) in Cleveland, told Reuters.

The only bright spot to be found in the data was that the 20-city month-over-month decline was the smallest drop since the August-September 2007 period.

“If there is anywhere to look for possible improvement, it would be that the pace of monthly declines has slowed down for most of the markets,” David Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.

Meanwhile a separate report from the Conference Board indicated consumer confidence had hit its lowest level in 16 years.

The Conference Board said its overall monthly index tumbled to 50.4 this month, its lowest point since hitting 47.3 in February 1992. The index measured a revised 58.1 in May.

Most analysts agree that consumer spending has held up relatively well in recent months, but that is easily attributable to the $50 million in economic stimulus payments the U.S. government sent out in May. Also, annual tax refunds have been coming in after the April tax season.

“Getting both [checks] at this time of year has led to an increase in household spending, but I expect this to be temporary. I’m looking for spending to trail off in the latter part of the summer,” Bernard Baumohl, an economist at the Economic Outlook Group, told CNNMoney. “If consumers are not spending, then the economy is in serious trouble. I think we’re in a recession right now.”

Source: Home Prices and Consumer Confidence Traverse Record Lows

Canada’s consumer price inflation rose 2.2% year-over-year in May, edging ahead as the Bank of Canada signaled it would last week. The spike suggests Canada’s economy of is also sputtering alongside that of the United States, but soaring commodities costs just may help our northern neighbor skirt recession.

Nothing much important happened over the weekend. G8 finance ministers in Japan talked up the U.S. dollar. But they didn’t agree that anything like an intervention was necessary.

American International Group Inc, the world’s biggest insurer, has announced it will replace CEO Martin Sullivan. The news comes after AIG reported record losses due to risky mortgage bets.

Sullivan follows the departure of a wave of Wall Street top execs, including the recent bloodletting at ailing investment bank Lehman Brothers.

“On Wall Street, after Bear Stearns fainted, the other financial firms took smelling salts,” says Bill Bonner in The Daily Reckoning.