Battered Hedge Fund Managers’ Syndrome
My column today looks at the abusive relationship between Barack Obama and the hedge fund industry. He keeps taking their money. They keep getting publicly tongue-lashed. Looks like the cycle has ended. Last week, non-TARP lenders objected to the UAW-pandering Chrysler deal. This week, AQR Capital Management LLC hedge fund manager Cliff Asness — at considerable risk to himself and his business — issued a striking manifesto responding to the president’s self-serving demagoguery and flagrant disregard for the rule of law. You can find Cliff’s essay and his other invauable work at Stumbling on Truth.
Like the “Cory the Driller” open letter that resonated last year with small businessmen, Asness’s cri de coeur has touched a nerve. Let’s hope his peers on Wall Street listen and learn.
***
Battered Hedge Fund Managers’ Syndrome
by Michelle Malkin
Creators Syndicate
Copyright 2009
Greed is good – until it gets in the way of a union-friendly restructuring deal. President Obama, generous recipient of Wall Street largesse, angrily derided a group of hedge fund managers this week as “speculators.” The miffed president suggested that uncooperative firms were selfish for holding out on the government’s Chrysler bankruptcy plans and refusing to make “sacrifices” to benefit the United Auto Workers.
The “sacrifices” involved Chrysler debt holders agreeing to sell the debt to the government at prices determined by union-beholden bureaucrats instead of bankruptcy courts. The hedge firms balked. Obama sneered that the dissenters were looking for “unjustified taxpayer-funded bailout.” But the holdouts never took banking bailout funds from Washington. And the targeted financial executives were simply doing what good money managers are supposed to do: put their clients’ fiduciary interests first.
Obama’s corporate-bashing rhetoric should, of course, come as no shock. During the campaign and continuing through his first 100 days, he has routinely attacked the “ethic of greed.” When Sen. John McCain publicized Obama’s wealth redistribution comments to Joe the Plumber, Obama snarked that McCain was “fighting for Joe The Hedge Fund Manager” and was “in cahoots with Joe the CEO.” First Lady Michelle Obama also singled out hedge fund managers for scorn, urging young people to turn away from unrewarding work on Wall Street for more fulfilling jobs in the “helping industry.”
But behind the public lashings, the Obamas were all too happy to pass the plate around the pews of the Church of “Greed.” According to the Center for Responsive Politics, hedge funds and private equity firms donated $2,992,456 to the Obama campaign in the 2008 cycle. Obama, vocal critic of the campaign finance practice known as “bundling,” accepted more than $200,000 in bundled contributions from billionaire hedge-fund manager James Torrey, more than $100,000 in bundled contributions from billionaire hedge-fund manager Paul Tudor Jones and more than $50,000 in bundled contributions from billionaire hedge-fund manager Kenneth C. Griffin, chief executive officer of Citadel Investment Group in Chicago.
No less than 100 Obama bundlers are investment CEOs and brokers: nearly two dozen work for financial giants such as Lehman Brothers, Goldman Sachs or Citigroup. By comparison, Evil Republican Rich Guy John McCain received $1,699,525 from the industry.
Obama lambastes the “system and the culture” of the un-helping industry. But he is so much a part of – not apart from – the very climate he condemns. “Speculators” fill many of the top positions in the Obama White House. Hedge fund manager Larry Summers heads the National Economic Council. White House chief of staff Rahm Emanuel made millions as an investment banker at Wasserstein Perella. Vice President Joe Biden’s son, Hunter, made a comfy living in the hedge fund business until he got entangled into an ongoing mess with the shady Paradigm Capital Management involving fraud and giant Ponzi schemes.
Yes, there are rotten hedge fund managers who have squandered billions of dollars without accountability – not unlike the government bailout and stimulus fund managers in Washington who continue to throw good money after bad. President Obama demagogues the unpopular industry because it fits the popular narrative – Wall Street bad, Washington good. Like battered wives, most hedge fund managers who supported Obama have tolerated the abuse futilely hoping it will stop.
Until this week, that is. In an extraordinarily candid open letter to Obama, hedge fund manager Cliff Asness defended his industry from the president’s “backwards and libelous” charges. “Managers have a fiduciary obligation to look after their clients’ money as best they can, not to support the President, nor to oppose him, nor otherwise advance their political views,” Asness wrote. He has oversight of some $20 billion at AQR Capital Management, LLC , which is not involved in the Chrysler case.
Asness minced no words: “The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him…Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power.”
Business as usual in the Era of Hope and Change. Perhaps demonized entrepreneurs will finally learn that when the dog you feed bites your hand, you don’t roll up your sleeve and give him your arm. You get a new dog.
Malkin is the author of the forthcoming “Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies (Regnery 2009).
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You’re wrong. Little old ladies don’t invest in hedge funds. Not unless they are billionaire little old ladies. Only the very wealthiest people are allowed to invest in hedge funds.
Here’s a link for you, from Ace of Spades.
An “influential Democrat” who also happens to be one of the ten highest paid hedge fund managers in the world.
It pays to buy political influence.
Put me down as not liking Warren Buffett either. Besides his being an Obama supporter, which is bad enough, he keeps harping on this death tax as a great thing. Look, my assets don’t come close to any taxable limit for inheritance taxes, but, dang it, that money is mine. I earned it, and I want it to go to my kids. If Buffett is so upset he is not going to be taxed enough when he dies, then he can pull out his checkbook at any time and write the Treasury a nice, big, fat check.
Like him or not, he is perennially the biggest individual taxpayer in the US, an honor he boasts about and can change if he wanted to. That is a statement of fact.
How much income did “W” declare every year? Anyone remember John Kerry’s disclosures in 2004? Negative net worth? Really?
Before rushing to an opinion, make sure you understand the difference between wealthy versus someone who just happens to fall into the highest middle-class bracket of earned income. The wealthy can get their political buddies to insert tax code that only applies to them, code that only known to the citizen in question, his tax attorney and his pal in Congress.
Mr. Asness can kiss his business goodbye. He will be lucky if he comes out of this in one piece. When does the bus tour of his home start?
Amazing. I suppose it would be impossible for you to provide an example for us…
’cause then you’d have to shoot us.
How did you come by this information?
I repeated all of theloneranger’s comment as it’s exactly what I believe is happening. BHO is a puppet. He was groomed… I wonder who all are pulling the strings too.
A wonderful question.
My personal favorites are Shellie Obama (FLOTUS and James Brown look-a-like), who I think is a very, very angry, mean person and a radical ideolog; G. Soros, master puppeteer, America hater, and very scary individual.
Tracking the story about the White House threatening a hedge fund (Perella Weinberg), this portion of a Business Insider article (May 5) grabbed my attention:
To be fair, we survived Tricky Dicky, but can we survive Madman Barack?
To be fair, we survived Tricky Dicky, but can we survive Madman Barack?
I understand your concern JJMurthy, but you have to understand that taxing more the affluent Americans could yield up to $100 billion more revenue that could be used to expand health coverage to the nearly 50 million people who either don’t have any coverage or are underinsured. If Al Franken wins (which looks likely) we will have a filibuster-proof majority in the Senate, and soon after we can go ahead and overhaul our nation’s health system. We need to have mandatory health insurance for every person who lives in this country (including the undocumented people). A recent study comparing the quality of the U.S. system with western European countries found that the U.S. ranks last on performance measures of quality, access, efficiency, equity, and healthy lives. The U.S. stands out as the only wealthy country that does not ensure access to health care through universal coverage, and we need to change this. So guys, stop whining, there is nothing you Cons can do to derail President Obama’s plans.
PUT.
IT.
UP.
So you are saying that America must provide health insurance for the entire planet? Because that is what giving it to the “undocumented people”, aka illegal aliens, comes down to.
By all means, explain why we need to change it.
So, it sounds like the US is a beacon of diversity, and a refuge of choice.
WOW
I just read the the article and I have not read a better summation than that.
http://www.316Christianstore.biz
Tell ya what, edelwuss,
go ahead and have your paycheck (that is if you have a job) direct deposited to the bank of the United States government, and let them decide how much you should keep of it, and how much some illegal with the sniffles should get in healthcare costs. Pretty soon, unless you’re a complete idiot (which doesn’t seem too unlikely), you’ll realize that working just isn’t worth it anymore since the government is giving everybody what they need. Now, mulitiply yourself by millions, and there you have it: a country completely dependant on the government, which is the antithesis of our constitution. But nevermind that silly piece of paper. It’s just a guideline…
/sarc off
Paid for Obama-Clinton for King/Queen
I would support National Health Care if politicians were given Medicaid coverage only. Reminds me of the doofus in Congress who lived on a food stamp budget for a month. It’s easy when lobbyists buy you 3 squares a day.
Say…Wonder what congresspeople pay for their Gold-plated coverage ? Let us buy it for the same price. Sounds fair.
Lordy! Lordy! Sooner or later this has got to backfire. When and how would be interesting if it weren’t so scarey. This Prez must be studying under Hugo and company. Power gone to his head and getting worse. Round and round, where will it stop?
We’re not going to have to, little mountain flower. His plans are so far left that people in his own party a starting to back away.
BTW, there were these people in 1917 that thought it was a good idea to kill off the czars and go a ‘progressive’ way. It didn’t turn out so good.
There is no way you’re a med student – at least not an even adequately informed one – as every competent member of the Allied Health field has resoundingly denounced the nationalized rationing of healthcare as morally unconscionable and an insurmountable detriment towards quality care.
Health insurance is one of the incentives towards acquiring the skills and education necessary to obtain the type of jobs that offer such coverage.
Having the government usurp this incentive is a negative on education, national production and self-direction, and will only lead to greater government dependence, with less revenue to meet those additional obligations.
So…..at least Urkel recognizes bailouts are unjustified. What excuse does he have for flinging money every direction in his other bailouts?
As for fiduciary duty, what would happen if a client went to a government regulator with a story of a manager ripping off the fund, or allowing it to be ripped off by some other private entity? I expect the government would come down on the manager like a ton of poo.
I also expect the manager would be wide open to all kinds of lawsuits from clients for not carrying out their duty.
But when a thug like Urkel is doing the ripping off, they just need to suck it up?
Dictatorial Marxist!
No it won’t; the rich will just stop investing – remember, they’ve already made their fortunes and have them tucked away in safes and banks around the world, well beyond the reach of US taxation.
The surest way to remove the Democrats from elected office, is to give complete ownership of it for a time; Americans do not like one party government, as was proven on 1994 and 2006.
Unless you’re an Obamite – you bend over and let the dog bite you in the butt.
Well, I think the gov’t is on the verge of being able to find your money anywhere, so long as you reside in the US. Some, however, are relocating overseas, ala Jim Rogers, who now resides in Singapore, well beyond the current US wealth destroyers.
It is true, however, that so long as the gov’t taxes only income and not wealth, people can indeed hide their money from taxation. The use of corporations makes it easy, as long as your corp doesn’t show much of a gain each year.
Ignore the little mountain flower. She lives in some sort of dream world where everybody is running through the alps singing and dancing without a harsh care in the universe. Its painfully obvious she’s never had to pull herself through life for even an inch.
The operative word here is could.
Twelve million plus undocumented visitors and their children are included in that figure and many of the Americans included are young people who choose not to have health insurance to save money (sometimes even when they have the option they will take the cash rather than the benefit). Many states, like Wisconsin, already have government health care (used widely by undocumented visitors and their children, the poor, the indigent, and people who just don’t want to have to pay their own way). States who have these programs love the idea of Federal Government Health Care because that will put more dollars in their state’s coffers (because the programs are a sink hole for $ and are creating budgets from, well you know). We have a federal health program to ensure that children get medical attention. Why does anyone over the age of 18 need a babysitter?
So, even if I would choose not to have health insurance I must have it. Even if I have it the government must make sure I am not “underinsured”. That $100 billion (along with the more than $600 billion already earmarked for health care) is chump change. Medicare is bankrupting US right now. What will universal health care for all who live here (inclucing undocumented people) do to US?
More on the subject; greed can be a very good thing. Greed makes people strive for more. When greed is combined with power, especially absolute power, it is a very dangerous thing. In my opinion, power is the ultimate in bad motivators. The government and this administration seek to tax the rich because they want the money to consolidate their power and because they can, they will.
Cliff’s essay was a good read. Most of us who agree with it already believed this. Many people now are drunk with the idea that the rich are being punished, some think they themselves will benefit, many don’t care if they themselves benefit as long as no one else has more than they do. I am absolutely sure that these policies will bring suffering to all of us. The scary thing is that this is the result that will satisfy many people.
Is this insane or what?
Is this just a test for what world government would be like? The only way to govern globally is to keep people terrified and needy. You can’t just go into global government without experience. Is that what this is? Global warming, asteroids, pandemics… Is that what the UN is now about? Silly, ignorant people from the Stone Age sensing a path to world domination?
There sure are some strong parallels between WHO and our Department of Homeland Security aren’t there? Childish incompetence being top of the list. Ignorance being next and arrogance close behind. They’re actually bunched up pretty close at the top.
How long until these battered hedge fund managers are labeled as terrorists and kept under the watchfull eyes of Homeland Security? Maybe they already are.
Excuse me–but all you socialists that want government health can kiss my grits. I’ve got great health care and don’t have a government screener and don’t have to wait for an appointment or surgery. Go to Canada or to the Brits if you want a government nanny. Your quality of life will decline and you can wait your turn. Leave the rest of us alone. How does the kool aid taste.
Ive been doing research over the past year or so and some heavy soul searching this week. And I have come to some conclusions (and none of this includes violence).
) I am giving myself until June 1st to wrap things up and then I am wiping my current personae from the internet. (no symbolic meaning just a deadline)
) The Republican party, in its form today, has betrayed us and I will do everything I can to destroy its old guard and bring a new (old school) generation to the GOP. blah, blah, blah, vote republican because Dems are bad. Whatever…. Drug addicts need to hit bottom before they will save themselves.
) I shall become a chameleon and tout the Green Mantra while doing eveything in my power to reclaim my tax dollars from the government. Perhaps there should be a sudden flurry of 501(c) and fed/state Grant applications. Cant beat ‘em, join ‘em and control them.
)I will then do everything I can to destroy the next generation of the Democratic party from within and without.
) Domestic Violence emergencies are the worst calls that a police officer can respond to. Thats because if you try to arrest, lets say a husband/boyfriend, you can almost be certainly guaranteed that the wife/girlfriend/sister is going to jump back into the fight also. So just because Texas may talk of secession, dont think that another country ‘attacking’ California or Massachusetts or our government interests will not receive the full response of the southern states. (He’s not heavy, he’s my brother)
) Research the Harvard Business School and other graduate programs. Theres an interesting class – ‘Dynamic Markets’ that was tailored to those joining Hedge Funds.
) Theres always a solution to a Gordian Knot but that does not necessarily mean that Occams Razor is it.
) Our system had been taken over by corruption – not ideology. Education and research by everyone, is the way to take back the power. Its time to pay the piper, but one doesnt pay the ferryman until he gets you to the other side (ok, that was just gratuitous)
Im going snowboarding now, please talk amongst yourselves for the rest of the weekend.
When the wealthy stop investing the market will crash and 401k holders will be up the creek. It won’t matter much, univeral health care will end up lowering the life expectancy. The wealthy people put Obama in power, and it is not as if he did not tell them what he was going to do. I can’t believe they have the gall to be upset about it now.
Then there’s the 30-35 billion he kicked in to Gates’s foundation…
Well, that was hilarious…!!!!
The Telegraph
So, THE ONE DOES believe in trickle-down theory, and knows it works.
He just doesn’t approve…
OK,
Want a story about government helathcare – here’s one:
Last week, my knee started to give me trouble. So, I went to the doctor assigned to me by the wonderful government of the European Country I live in. The Doc (a very professional, well educated individual) looked at my knee (no x ray) and said I had osteoarthritis, handed me a cane and said there was nothing more to be done.
Let’s break this down to reality:
- No X ray (No reason to spend that extra money)
- No treatment (take a cane).
There are two reasons for these actions, the first is that penny pinching civil servants administer the health care system and the second is that the “cane” means I would be disabled. Getting the “cane” would mean that my monthly benefits check from the government would go up enough that I could quit working. The doc handing me the cane, for most Europeans, would be like winning the lottery.
Luckily, I am not European. Being an American, I do not consider a little pain in my knee to be a disability. That would be an insult to people who are actually disabled.
So, I got on the phone, called an Orthopedist in the USA who will do whatever medical tests are necessary to determine my actual condition and the causes, attempt to heal the problem and give me advice on how not the have a recurrence. It’s going to cost me some money – including a plane ticket – but, hey, I will actually receive helathcare instead of administration.
Anyone who thinks Euro-style healthcare is a better system has never lived here.
I swear I previewed my rant twice before posting..
Thanks for ranting…!