Oliver Willis

29 Responses to “Oh No, Teh Hedge Funds!!!”

1. 1 Enlightened Liberal
   May 14th, 2007 at 7:43 am

   Isn’t John Solomon the “journalist” that cooked up the phony Harry Reid scandals?

   Why is it that investing is bad when it is a Democrat doing it?

2. 2 SaveFarris
   May 14th, 2007 at 8:56 am

   Well, for one thing, this particular hedge fund was big in the

3. 3 Nimrod Gently
   May 14th, 2007 at 8:58 am

   Farris doesn’t even care anymore.

4. 4 SaveFarris
   May 14th, 2007 at 9:01 am

   … sub-prime lending market, something Edwards has taken a stand against.

   One of these days, I’m gonna learn to preview!

5. 5 Enlightened Liberal
   May 14th, 2007 at 9:35 am

   If ferris previewed things he/she/it says than he/she/it wouldn’t post anything. Not that there’s anything wrong with that.

   And by the way idiot, Edwards isn’t against the subprime market, calling it “a valuable alternative for families with poor credit” he is against predatory practices. Which you would know if, you know, READ the article you linked to.

6. 6 Enlightened Liberal
   May 14th, 2007 at 9:36 am

   Don’t know why I even address the idiocy that talking points generator posts.

7. 7 Tyro
   May 14th, 2007 at 9:50 am

   Why hedge funds are considered evil:

   (a) the most famous hedge fund is run by boogeyman George Soros

   (b) the stereotype of a financier is a loud, tall, deal-maker. People understand this and it makes sense to the public that those people make money. People who work at hedge funds are much lower-profile and much more explicitly quantitative. It makes them hard for other people to understand what, exactly, a hedge fund does.

   (c) Closely related to (b) is the fact that in the USA, there is a bias in favor of making money by being a salesman. “Sales” is typically the cash-cow division of many corporations. There’s a lot of focus on being successful by being in real-estate (selling property) or being a stock broker (selling investments). We respect someone who gets rich by convincing people to buy something (see: Glengarry Glenn Ross). Hedge funds (mostly) bypass this “salesmanship” aspect of finance in favor of finding the economic openings in which buyers and sellers are misinterpreting value somewhere and exploiting it. Perhaps it’s considered “unfair” to make money finding these pieces of “hidden value” rather than relying on your charisma and salesmanship to push product out the door.

   (d) Many people can manage their investment portfolios themselves, in many cases as good or better than a financial manager or mutual fund manager. However, they can’t run a hedge fund for themselves. That makes hedge funds inherently suspicious.

8. 8 Organic George
   May 14th, 2007 at 10:16 am

   Hedge funds need to be regulated. Big pools of cash moving in & out of the controled markets is not good for the small investor.

   Remember it was a hedge fund that almost brought down the markets in the 90’s and took intervention by the Fed Reserve to calm the markets. The too big to fail syndrome. Any time it talkes public money to calm markets from private equity actions in the markets, that makes the case for regulation of hedge funds.

9. 9 Tyro
   May 14th, 2007 at 10:26 am

   The bailout of LTCM in the late 90s didn’t require public funds. Rather, it was a coordinated effort by major investment firms who provided the needed stabilizing capital, led by the Federal Reserve. Granted, public money was consumed in the sense of that members of the Fed were using their taxpayer-funded (?) salaries to spend working hours making sure that LTCM didn’t bring the economy down with it, but congress didn’t need to appropriate public funds to bail it out (unlike, say, the airline industry).

   Besides, hedge funds are yesterday’s news. These days it’s all about private equity firms as the scary unregulated economic beast we all have to worry about. Or at least they will become so once a Democratic politician is revealed to have had a successful investment in a private equity firm.

10. 10 Hedley
    May 14th, 2007 at 10:41 am

    A glorified ambulance chaser being “against predatory practices.” That’s rich.

11. 11 Enlightened Liberal
    May 14th, 2007 at 10:54 am

    No problem Hedley, if your daughter god forbid gets her insides ripped out by a defective pool drain I guess you won’t be seeking counsel.

12. 12 Hedley
    May 14th, 2007 at 11:08 am

    For every legitimate personal injury case there are loads which are of questionable merit designed to extract big paydays for the lawyers that prey on the hospitals, insurance companies, etc. Gotta love the trial lawyers. As long as they get their cut, it’s ok.

13. 13 Hedley
    May 14th, 2007 at 11:11 am

    By the way, coffee is hot. Be careful if you spill it. But if you do, make sure to get counsel.

14. 14 Enlightened Liberal
    May 14th, 2007 at 11:17 am

    It’s pretty clear by the way you stated the McDonald’s case that you have no idea of what it was about. Do some research and get back to us when you know enough to have an informed opinion.

    And, by the way, this thread is about hedge funds. I’m not playing your diversionary game about “teh trial lawyers!@#!!!!11!!!”

15. 15 Enlightened Liberal
    May 14th, 2007 at 11:24 am

    LTCM came to my mind too. I don’t know whether that indicates hedge fund regulation though as much as derivitative regulation. Maybe higher margin requirements, etc. I don’t know. The theory behind hedge funds was that they don’t need to be regulated because they only serve high wealth individuals. On the other hand, since pension funds and mutual funds are investing in hedge funds now, maybe some regulation is necessary to protect the small investor. I hope no pension funds were invested in the hedge fund that lost $6 billion in 2 weeks last Fall in the Natural Gas (?) market.

16. 16 Hedley
    May 14th, 2007 at 11:34 am

    The McDonald’s case was about trial lawyers and their best friend frivolous litigation. Plain and simple.

    Nothing wrong with hedge funds. A great place to “investigate poverty.”

17. 17 jimmmm
    May 14th, 2007 at 12:35 pm

    Not regulated like regular equity funds. EL: nice summary. The arrival of institutional monies makes FTC regulation of hedge funds an absolute necessity.

    Hedley: You’re badly misinformed. In fact, your whole perception of torts law is inverted: The overwhelming majority of settlements and verdicts are relatively small and account for expenses and lost opportunities; the ones you’re referring to are the biggest, most controversial punative awards. Applying the exception as the rule works in both directions, and in neither case are they welcome in a rational discussion about tort and liability law.

18. 18 chum
    May 14th, 2007 at 2:14 pm

    Oh oh, I sense another O’Reilly flow chart tracing this back to George Soros coming up on Talking Points.

    My guess is Hedley loved trial lawyers in Bush v Gore.

    Maybe Edwards should have got involved with war bonds based on his erstwhile support for Bush’s military endeavors.

    Anyone who invests in a hedge fund needs to have their profits siphoned off by a tool like Edwards. I’d rather be dealing with my neighborhood bookie

19. 19 Hedley
    May 14th, 2007 at 2:22 pm

    While the far majority of cases do not go to trial, the settlements, no matter how small, add up. Go ask any doctor who can no longer afford malpractice insurance. Why are so many OB-GYNs no longer delivering babies?

    As for trial lawyers, chum, they are a drain on society whether they be Democrats or Republicans.

20. 20 Tyro
    May 14th, 2007 at 3:14 pm

    Shorter Hedley: I don’t know what a hedge fund is, so I’ll just use right-wing talking points about Edwards instead.

21. 21 jerry
    May 14th, 2007 at 3:14 pm

    Check out this though:

    As the former research director of a dorm-room hedge fund (it was the sort of thing that kids started at Harvard during the tech bubble) I feel that I’m in good position to explain what hedge funds are and why we should have no serious problems with them.

    Hedge funds are basically like mutual funds — you give them your money and they manage it for you. The big difference is that they’re allowed to pursue more complicated strategies than just buying stocks, like short-selling and playing with derivatives. Since the government doesn’t want ordinary citizens blindly investing in funds that might be doing strange and risky things, hedge funds are only open to wealthy investors and institutions like banks and pension funds.

    I am not sure how to understand these two paragraphs, but my initial take is to think less of Neil and of Harvard “kids.”

22. 22 Hedley
    May 14th, 2007 at 3:35 pm

    Shorter Tyro: I only read the bottom of threads.

    Let’s see if we can clear things up for you. I have no problem at all with hedge funds and understand them perfectly. The issue is that Edwards worked for a hedge fund that was a player inthe subprime lending market while railing against “predatory practices” such as those inherent in the subprime lending market. Some (read, anyone but Libs) might call that hypocrisy. Others (read, anyone but Libs might be amused by the idea of a trial lawyer being against “predatory practices” when said trial lawyer derived his cast fortune from preying upon defendants with varying degrees of responsibiltiy and even more varying degrees of deep pockets.

23. 23 Tyro
    May 14th, 2007 at 3:59 pm

    Hedley, I count no comments of yours related to hedge funds. They are all hysterical bleatings about trial lawyers and ambulance chasers based solely on talking points, most not even related to predatory practices of mortgage brokers who are not related to hedge funds.

24. 24 Hedley
    May 14th, 2007 at 4:35 pm

    Shorter Tyro: I don’t read well.

    “Nothing wrong with hedge funds.”

25. 25 Tyro
    May 14th, 2007 at 5:05 pm

    Hedley, as anyone who actually read your post could tell you, that post was actually some juvenile and ignorant bleating about lawsuits against McDonald’s. You don’t even read your own posts. What a joke.

    The sooner the right-wingers stop flapping their ignorant gums about Edwards, the better off we’ll all be. You’re simply too uninformed and too ignorant to comment on the actual blog post. So why don’t you be quiet?

26. 26 Enlightened Liberal
    May 14th, 2007 at 5:34 pm

    Today, George Bush talked about increasing fuel economy and alternative fuels while he and his family derive their fortune from oil. Hypocrisy? According to Hedley, yes!

27. 27 Hedley
    May 14th, 2007 at 8:25 pm

    Tyro, try and follow along. Periods generally indicate that one statement has ended and another one begins. The first sentence of the post you refer to was about the frivolous McDonald’s suit brought to you by America’s trial lawyers. The second sentence was about hedge funds. And you said I never mentioned hedge funds. No Rice-A-Roni or Turtle Wax for you. Thanks for playing.

    As for Enlightened Liberal, it would be hypocrisy if he was still deriving money from it and arguing against it at the same time. Like Edwards being Mr. Poverty and Mr. $400 Haircut at the same time. Or all the Hollywood celebs following Gore’s “the sky-is-falling” environmental routine while flying around in private planes and driving Hummers. That is hypocrisy.

28. 28 Enlightened Liberal
    May 14th, 2007 at 8:30 pm

    Give it up already. You lost about 15 posts back.

29. 29 Porlock Junior
    May 15th, 2007 at 6:56 pm

    Hedley could learn something about the coffee case if he dared to read the Wall Street Journal’s summary of the case. But of course not: that was in the news section where the WSJ gives business people the news thay *need* in order to make money, not the editorial section where it tells them what they *want) to hear.

    But it was a good piece of journalism; sort of like their expose of the phony Free Market in Energy, six months before the California debacle.

    Not to worry: Rupert Murdoch will take care of all that good financial journalism.

    And hey, has ANYBODY over there (I’m in England at the moment) bothered to cover Murdoch’s amazing and incredible conversion after talking to Blair and Gore and realizing that global warming is for real? You probably think I’m making this up. The USA needs to get a couple of newspapers that cover some news.

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