At the height of the financial crisis in 2008, a group of famous hedge fund managers was made to stand before Congress like thieves in a stockade and defend their existence to an angry public. The gilded five included George Soros, co-founder of the Quantum Fund; James Simons of Renaissance Technologies; John Paulson of Paulson & Co.; Philip Falcone of Harbinger Capital; and Kenneth Griffin of Citadel. Each man had made hundreds of millions, or billions, of dollars in the preceding years through his own form of glorified gambling, and in some cases, the investors who had poured money into their hedge funds had done OK, too. They were brought to Washington to stand up for their industry and their paychecks, and to address the question of whether their business should be more tightly regulated. They all refused to apologize for their success. They appeared untouchable.
More here from Bloomberg Businessweek
I am not really certain what to make of the graphic accompanying the story. It is a little infantile but it does convey the average investors experience of hedge funds quite well/
Recently I saw a great looking cake in my favorite cake shop. I went inside and asked “What kind of cake it is and how much is it”. The man answered,”It’s a iced cake tin for display, and not for sale”. All I had to do was ask and I got an answer, so I bought something else. It’s your money! Ask questions before handing it over. Don’t be a blind trusting zombie. Beware of crooks out there. More info on GFC crooks at ‘Inside Job’ DVD. Supply your own sick bag.
The thing that I find absolutely remarkable is that to become say a scientist or a surgeon or a pilot or a military commander one has to undergo an arduous selection process that involves a highly structured and transparent credentialing process after a lengthy period of training. In order to become a Hedge Fund Manager, as I understand it, you just have to turn up on the day. And therein lies the problem.