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Goodbye John Horseman: too bad you were right all along. Full report.
h/t Moomoo trader
There is no reason what so ever for the existence of hedge funds.They provide nothing, produce nothing, add nothing to society. They exist only to enable the casino and add yet one more dimension to the totally useless market and financial service industrial complex pyramid ponzi.
Hedge fund is a fancy sounding word, but it's just another method(s) of money management. If people want to put their money into a hedge fund, regardless of the outcome or soundness of their investment strategy, who are you to stop them?
precisely. maybe there is a case to put some limitations on a few of the strategies employed by some hedge funds, but to decry the entire investment structure is naive and laughable.
They leverage off of people's deposits. Take your money out of the bank and the hedge fund goes POOF. That's who people are to stop them. All they gotta do is stop being an unwilling participant by draining your bank account so that your own money isn't out driving up the price of gas just so they can take it out and pay higher gas prices the next day. If people only knew what their money was out doing while they were asleep they could regulate hedge funds out of existance the next day.
havent been to the comments section in a while and WOW. The quality of the discourse has gone to hell. There used to be a day when these comments were witty and insightful instead of populist drool. If you have limited knowledge of a subject, its best to keep it to yourself.
Especially when it's criticism of other commentators without actually adding to the subject matter in the article above.
Limited knowledge is not a very good adjective to pick for me. I'm not sympathetic to you at all. So you can't just walk in here and tell me I suck and expect anything but a blink. So let me explain my reactions to your post so you can maybe develope a more targeted attack.
"haven't been to the comments section in a while and WOW."
I don't think you've been missed. I personally don't miss you. I've never read anything you've ever written and this isn't a good first impression. I'm really glad you think one comment on one post matters. But you have to engage me in a more intimate fashion. Listen long and hard to what I say and why I say it while I'm doing the same thing with you. But thanks for the half assed superficial attempt to margianlize me and make me feel irrelevant because I think this is boring. I've never been bored in my life so I'm not sure. But I think this is what boring feels like. Stop by if you're looking for something more intimate and long term.
I personally could care less. My point was that hedge funds are just another twist on the obsene casino that are the markets. Equity markets at one point in time were there as a source of capital for real enterprise. They qualified as "investments" What we have now is not a shadow of that original intention. It is a giant electronic casino replete with new games and new tables all designed to further the profits of the house.
Bullshit. Hedge funds are a way to make money.
Add to that, some strategies are more often than not the only disciplining force that restrains the printing-press command economy like we live in now.
Don't think for a minute that your senator or the Fed is aligned with your concerns.
traditional hedge-funds, as opposed to the hyperleveraged market-distorting garbage cans set up by the broker dealers, are far superior participants in the market place, adding value by being able to impact reason into relative values. Long-only ponzi bubble-blowers (think janus in 99) are the real scum, as well as the hyperleveraged bullshit created by the dirtbag banks.
Hedge funds allow pension funds/charities/foundations/endowments to increase their yield beyond market return rates; and therefore enable additional research, employment and security for the ultimate beneficiaries of those entities.
They are not significantly different than banks, mutual funds or dare I say, your hero Warren Buffet (providing out-sized returns for his shareholders).
Actually, it's attorneys that produce nothing and add nothing to society.
During a sane market, it can.
But if you look, MOST pension funds/charities/foundations/endowments are way down. Some are going to cut benefits soon.
Besides, when you hear 50 percent of all hedge funds could disappear in the next couple of years. How much of these pension funds/charities/foundations/endowments.........
....will WISH for market returns when their pension goes to basically 0.
Hedge funds do have a purpose, and can be run right. But when greed gets involved, it screws it ALL up.
A non-greedy hedge fund. One that keeps the screwball honest= good hedge fund
A greedy hedge fund that will speculate on anything, use insider information, and
Besides this whole economic crisis = derivatives. Nothing else. Everything we see, is the result of the crashing of the derivatives market. Instead of providing the liquidity that made our bull run of the last 20 years...instead of doing that, it's sucking the life out of the world now because it's crashing.
We never really had a bull market the last 20 years, it was all fantasy, fantasy in real world terms, but fantasy nonetheless. Just one big derivative imbalance on the market. That's it. Little actual wealth creation, just casino bets, whose margins would provide liquidity to every other part of the market.
I'm not going to say, 'end hedge funds', because if you did that, you better end all the imbalances, or you will make it worse.
But if you think they actually provide something, then you are as a cuckoo as coco puffs.
Besides who wins in the hedge funds when armageddon in the markets hits. We all know it's coming, at last time was just the hitter warming up before the ballgame.
Some want to say this is over, (not many here), I say we're in the 2nd inning, maybe still first.
This won't end until we switch the system out. So 5 years? 20 years?
I would be optimistic about recovery, but no one in wall street or the gov't seems to get that we're only wasting time and making things worse. Debt based monetary system is finished, never to be fixed. How long before everyone gets it? Alexandar Hamiltonian American Credit System is our only way out.
Remember the market can stay irrational longer than you can staqy in business. As I've stated, we're at the END of one large experiment, or imbalance, started by Nixon and our floating exchange rates, followed by tax cuts every few years to prevent recession (creating an imbalance and fake inflation because nothing could clear), followed by the derivatives that not only was the sole reason we came out of the 1987 crash, but also provided the FAKE FAKE FAKE FAKE liquidity that now everyone ASSUMES is naturally there. It isn't, it never was supposed to be there. So guess what happens when it's pulled away?
That's what we've been watching this past year+ (something I was telling everybody YEARS IN ADVANCE). Hedge funds? More of a problem than a solution during this time, because they were on top of alot of this, and propelled it forward. Again, hedge funds shouldn't neccessarily be shut down, but if you take away certain things, you'd find that most of the hedge funds profitability are based off these things, and after taking them away....why be in them?
That's right banks aren't that different. So how many of them are really profitable? NONE! They're basically all bankrupt, not by 10 percent, but by 1000-10000%. How many are worth 50 billion (rather than -50 to -200 billion from Mark to fantasy) who all still besides that have CRE that are fading fast, and many of the big players have around 50 trillion in derivatives exposure that WILL blow up at some point during this crisis.
Warren Buffet is an old idiot, and a liar. A bet on America recently? Bull, a bet on CHINA! Whatever he had, it's gone. He's living off his past investment, and the sheeple just keep treating him like GOD, rather than the old guy who knows d*ck.
Attorneys smack down the corporations which say, hmmm, we'll make 100 million if we do it this way, and kill 10 people. How much can we expect to pay out after killing 10 people? Only 10 million? Okay it's plus 90, do it!
Why do we have attorney's, and why musn't there every be dollar limits? To prevent the above from getting out of hand.
Bopal India anyone?
Think if that happened here, the people would still be living in huts, without medical treatment? Nope, because we have attorney's.
We have soldiers to protect us from other soldiers. We have attorneys to protect us from corps. (among other things)
The hardest thing to realize in this 'new market', is that all the supply-side, tax cut, lassiez-faire approach to things did nothing but create an imbalance. That imbalance is going away, and the hardest thing to realize.....nothing you learned was really true, and you're starting to see that decoupling, and all your strategies, and beliefs, will be found to be faulty, and are downright lunacy. It worked when it worked, because of the imbalance. Now it won't work, because the imbalance is going away. So have fun realizing everything you learned about the market (pretty much) over the last 35-40 years was a lie. Prepare to live by that rule. Prepare to invest or lose by that FACT.
I don't want to be right, but there is no way I'm wrong. So I say the above with all the respect you all deserve, and truly hope you end up on top rather than crushed. Good luck.
I absolutely agree. I used to work in the "real economy" as an engineer for 15+ years and then several years ago switched into the interesting field of investing. I ended up working for a hedge fund for many years (recently layed off). There is no doubt that the narcisistic traders in hedge funds (and probably others in investment manaagement) have alot of disdain for those who actually work their asses off accomplishing much more for the economy while earning <20% of what a master of the universe commands. It is quite sickening. Something bad has happened to our society.
Capitalism! Groups of goons with gobs of money! But hey, I can't not get behind that. That is, banding together to invest. Who are we to restrict anyone from lawful conduct!
It goes sour when they have insider knowledge and can skirt the laws.
Capitalism works as long as everyone that breaks the rules goes to jail. DO NOT collect a fat bonus. DO NOT get interviewed on CNB.S.
The sheeple think corruption is capitalism these days. We have a problem with enforcement; not a lack of laws. New laws tighten the screws of corruption.
"The more corrupt the state, the more numerous the laws."
I loved the quote.
well then...let's do this. you will now be requested to limit your investment activity to buying and selling stocks and bonds only, how would you like that? your stmt is nonsense. inherently your suggestion is similar to stemming innovation. we would still be using punch cards with our computers if even that with thinking like that. successful fund managers are the best in our craft. the govt is the reason for the mortgage meltdown when it created the GSE. market manipulation imo is with the buying of investments, not the selling of them.
Given the huge run-up of late, those returns are horrible.
I have maintained for many years that at its best, Wall Street is a giant skimming operation.
At its worst, it is outright thievery and fraud.
Hedge Funds at their best are the most egregious and brazen of the skimmers ("two and twenty").
A generalization. But again, it's up to the individual to invest.
Having said that, Hedge Funds are about absolute returns. Regardless of how they go about doing it, they attempt to provide absolute returns. Mutual Funds just try to outperform the benchmark. Benchmark down 99%? Well, it's great news if the Mutual Fund is down 'only' 89%. 10% outperformance!
The biggest scam is the regulated mutual fund industry, which convinces you that so long as you don't lose as much as the next guy, you've made money. Hedge funds, at least, make it or break it. As long as there's no theft (Madoff) or illegal activities, Hedge Funds garner more respect from me than Mutual Funds, that's for sure.
It's amazing the amount of hedge fund nonsense out there; as if the Fed wasn't scary enough, you need more bogeymen? Each hedge fund is different and unique; using mass generalizations to describe them are for lazy intellects, and reveal just how little you know. Are they risky? Sure, but this past year we saw just how much more risky big banks are. Hedge funds were painted as the villain so many times, yet I don't remember even one getting a bailout, or causing a crash, or being too big to fail. I like hedges because there's still a lot of independence out there, and that's a good thing. But as always it's investor beware.
Are investment partnerships bad?
Just a thought but if managers are closing out books for the year, won't that lead to dollar buying?
It's the dumb, "Anonymous" comments that really bug me.
I like hedge funds because they are basically a few soon to be rich con men stealing from a bunch of lazy rich aholes
What a bunch of timewasters in this thread.
A hedge fund is a fund company structure, kids. Nothing about a hedge fund is inherently anything more than an exemption to traditional filing requirements for accredited investors. You're buying active management; congratulations on your wise choice not to count on asset price bubbles to sustain ever-growing index valuations.
If you can't separate branding from fact then what are you supposedly doing here in the first place? Something tells me that fairly few of the gold-buying sheepies fantasizing about a derivativeless marketplace in their extravagant whines are anything more than irrationally jealous of hedge fund "cachet." Congratulations on your insight that the Fed is printing money almost as fast as the 2/20 set. Boo hoo and baaaa.
unfortunately these hedge funds will steal from any source available. not just rich assholes. if a crime known, is allowed to continue, that makes everyone an accessory. pension funds have been hit disproportionately,
I would have to agree with the few posters who point out the lack of intellect from the naive sheeple that say things like, "hedge funds are all crooks, serve no purpose, blah blah"...before forming an opinion, be informed. Compare your index funds thru bull AND bear cycles against some of these folks (such as PTJ, Maverick, etc) and tell me exactly why it is a bad thing that pension funds put a portion of their assets with these fund managers? Perhaps it has something to do with the fact that 1) you don't have the net worth/assets to invest with hedgies, or 2) you're like much of the masses that just gets pissed because others do well for themselves, and you would rather they step down to your level.
The argument against hedge funds is that they introduce instability into the financial system. The Investment Company Act of 1940 was introduced after the Great Depression to make investment vehicles more stable. Hedge funds are exempt from the act and are not regulated. LTCM back in 1998 showed that they can introduce systemic risk but the industry expanded unchecked.
Performance adjusted for leverage on and off-balance sheet is not impressive. But the main point is, what would happen if a failure like LTCM were to put the system at risk? Most likely the losses will be contained by the Fed and Treasury, so we end up with the main issue facing us today: moral hazard and socialization of losses.
This not theoretical, investment banks morphed onto hedge fund type financial structures, so Bear and Lehman are already two fresh cases. And I would also add the cowboys of AIG FP, Howard's bad DNA. It's just a matter of time before more blow ups, the structure is unstable.
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