Those former masters of the universe have a hard time waking up to a different world…
Virtually unregulated, getting unprecedented tax treatment (really reversing Robin Hood), almost (nakedly) shorting the banking system and half the world economy with it out of existence, and now screaming and shouting because they won’t get their Chrysler money back.. There is a word for it, you can read it in the title.
Cliff Asness, whose firm manages some $20 billion of assets, has written an open letter blasting President Obama for his attack on the hedge fund industry in the wake of the Chrysler bankruptcy.
As you’ll recall, hedge funds, which hold approximately $1 billion in Chrysler bonds, refused the government’s offer to take approximately thirty cents on the dollar. Obama accused hedge funds of holding out “for the prospect of an unjustified taxpayer-funded bailout.”
These comments have enraged many in the industry but few have spoken out publicly. Asness, whose firm doesn’t hold Chrysler bonds, says the industry is genuinely afraid in the face of Obama’s power. Stating that he himself is “fearful writing this,” Asness still pulls no punches:
* “Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing.”
* “The President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out. Find me a hedge fund, even a failed one, that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along.”
* “The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to “sacrifice” some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power.”
Henry discusses the controversy with hedge fund manager Jeff Matthews, of Ram Partners. (He’s also author of the popular blog Jeff Matthews Is Not Making This Up.) Matthews says it’s no surprise that Obama would favor unions over hedge funds and that there’s no use in crying foul in the court of public opinion. But, says Matthews, expect the Administration’s tactics to be challenged where they should be: the court of law.
Here’s the full text of Asness’s letter, via Zero Hedge http://zerohedge.blogspot.com/
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Question: Why shouldn’t we favour unions, or working people for that matter over masters of the universe, for once?