Posts Tagged ‘hedge funds’
By James Kwak Wall Street is engaged in a cover-up. Not a criminal cover-up, but an intellectual cover-up. The key issue is whether the financial crisis was the product of conscious, intentional behavior — or whether it was an unforeseen and unforeseeable natural disaster. We’ve previously described the “banana peel” theory of the financial crisis [...]
By James Kwak ProPublica has a long and detailed story of Magnetar, the hedge fund that helped fuel the subprime bubble by providing the equity for new subprime collateralized debt obligations — precisely so that it could then go and short the higher-rated tranches. In other words, Magnetar wanted to short some really, really toxic [...]
The political flavor of the month is to push back against even the Obama adminstration’s mildly reformist inclinations on finance (e.g., Peter Weinberg in today’s FT is a nice example). And, of course, once you hire a lobbyist, he or she tells you that “winning” means stirring up Congress in favor of the status quo. Measured [...]
Hedge funds have been nominated as a prime culprit in the current financial disaster. European governments, in particular, seem keen to impose greater regulation on hedge funds, including more transparency and compliance requirements. In fact, this is will be one of the main deliverables they seek at the G20 summit on April 2nd. I’m not opposed to stronger [...]
Or, more accurately, the cost of caring about your reputation. My recent article on Risk Management for Beginners closed with some unrigorous speculation about the peculiar incentives of fund managers, who are consistently well compensated in decent and good years and, in bad years, lose their clients’ money and move on to start a new [...]
One of our readers recommended the Congressional testimony by Andrew Lo during last Thursday’s session on hedge funds. Lo is not only a professor at the MIT Sloan School of Management, but the Chief Scientific Officer of an asset management firm that manages, among other things, several hedge funds. He discusses a topic – systemic [...]
I try to read four newspapers before the day really starts, and also look through a couple of on-line sites. I skim the lead economic stories and randomly dig all the way through the paper to the end of some business/financial stories. Sometimes the news jumps off the page, and sometimes it seeps through. Now, [...]
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Hedge Fund Blindness
August 31, 2010 in Commentary
Tags: hedge funds, politics
By James Kwak Hedge fund managers may be good at investing money. (Or they may just be the beneficiaries of luck, like successful stock mutual fund managers.) But that doesn’t mean they can think clearly. Andrew Ross Sorkin comments on the letter by fund manager Daniel Loeb, a former Democratic fundraiser, criticizing the supposed anti-business [...]