Hedge fund managers, will they survive?
September 1, 2007 by Dusty
We all know that people are losing their homes faster than you can say “Rove has left the building”. If you thought for one minute that the folks running those friggin hedge funds were going to take it in the shorts, think again…according to this writeup at Alternet..no such thing will happen. From the Alternet writeup:
Kenneth Griffin, head of Citadel Investment Group, chose Versailles as the site of his nuptials a few years ago and last year made a sum that would have made even Marie Antoinette’s eyes pop: $1.2 billion. Now that heads are rolling from the mortgage meltdown, the image of the finance world’s royals has lost a bit of its luster. And yet, unlike the ill-fated queen and and her Louis XVI, Griffin is expected to survive and maybe even come out ahead. He has already swooped in to take over the assets of one collapsed rival and is busily buying up the stocks of other battered companies. Go, Griffin!
My goodness, the man sure knows how to make hay whilst the sun shines doesn’t he? Next we have Steven Cohen:
Steven Cohen’s SAC Capital fund dropped 6 percent during the first three weeks of August, reportedly one of its worst months ever. On top of that, Cohen now has to worry about a move afoot in Congress to cut off mortgage-interest tax deductions for mansions. Under the flimsy guise of “combatting climate change,” Rep. John Dingell, D-MI, is going after owners of homes larger than 3,000 square feet. The size of Cohen’s Georgian mansion in Greenwich, Conn.: 31,600 square feet (not including the ice skating rink, tennis court and beauty parlor). At least Cohen was able to enjoy his $1.2 billion windfall from last year while he could. On one spending spree, he picked up an Andy Warhol image of Marilyn Monroe, “Turquoise Marilyn,” for an estimated $80 million.
Well, thank God he is still afloat, right? Alternet also has some words of wisdom regarding the hedge fund managers:
Even if their earnings decline, hedge fund managers will likely still be able to take advantage of a convenient loophole that allows them to be taxed at a lower rate than common folk. That’s because a substantial portion of their income is in the form of a cut of their funds’ profits, which is treated as capital gains and taxed at 15 percent, rather than the 35 percent rate that applies to ordinary income. Some cranky class warriors in Congress are trying to plug this loophole. But luckily for the hedge fund managers, there is strong opposition, including from some Democrats. Whew!
So, don’t worry about those guys..they will survive just fine…the folks losing their homes..not so much. But, who gives a shit about the ‘little people’?
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In addition to filing for bankruptcy, a hedge fund is suing its own investors to recover the profits that were paid out. Should investors who thought they were investing in a legitimate operation be forced to give back what those funds paid out if the payments were based on fraudulent numbers? Who is to blame?
If you had to guess, where would you say the hedgies spend most of their money? Electronics? Mansions? Private islands? Jewelry? This wouldn’t be the first time someone was interested in the spending habits of the disgustingly “rich.” DealBook, a blog from the New York Times, has the story.
t tuns out that hedge fund professionals spend their income on fine art. Art, on which they spend $3.99 million, beats the second item on the list (yachts) by a very wide margin. Only $430,000 is spent on yachts.
Fine art among hedge fund millionaires: wise investment for the fabulously rich with enormous expendable income, a true appreciation of art for art’s sake, or extravagant spending indicative of a bubble of some sort?
extravagant spending indicative of simply having too much money to spend.
the growing income inequity in this country makes me sick. and you can call this socialist or communist or whatever the hell you want to call it: no one needs to make a billion dollars a year. no one. there is simply no call for it. none.
when everyone in this country has enough to live on, a roof over his or her head, plenty of (healthy, wholesome, nourishing fresh) food to eat and health care, plus a means of retiring with some degree of dignity and security, then go on and make your billion a year. i applaud you.
in the meantime, this makes me sick. sick. a financial community that operates on the premise of “IBG,YBG” (I’ll be gone, you’ll be gone, let’s do the deal and screw the little people) should be regulated and taxed. I say “taxed” because there are essentially a million ways for wall street’s emperors to escape any taxation at all. Tax the bastards and if they’re crooked? seize their assets.
Way to go Belle…but you’ll have to take that up with Georgie because he is responsible for making this people the vast sums they are buying the art with. His tax breaks to these guys is monumental…and he’ll do even more of it if they just let him. Sure the Congress did…it benefited them also. They’re all crooks and liars. And you were absolutely right about people not needing billions. They should take care of their fellow man if they have that much. Taxing the rich…will never happen…because those in power want to keep theirs!