Looking at Yale’s current year return with their endowment, it definitely shouldn’t be “How To Invest In A Hedge Fund”. Hell, I’m sure that learning to run a HF in this economic environment may be somewhat like learning how to operate a nuclear power plant after it has been bombed to pieces.

Might be a good idea to know, but definitely not the time or place to exactly execute on that knowledge. Also, now that we are facing a Brave New World regarding the world of Finance, the old rules will not really apply. Sounds mostly like “How to make the sale” with the HF stuff as a setting in a play.

The only mistake is to expect more of the same.

The only mistake is to continue to be fooled by randomness.

(yes yes I know people like you always say it will change but when? it never does.)

You either have not lived long enough, not read enough history, or have your head buried firmly in the boob tube.

Sea change is coming.

Happy Holidays,
The Hen Haus and family

I agree, we have all been lining up at the trough in one way or another.

Can we blame the greatest generation for working so hard and saving, thus making life too easy for the boomers?

I do think the piece makes you think about the legitimacy of all the IBs, hedge funds etc. I do not want to defend Fuld et al, but nor do I want us all to start a relativist decent that can only lead to blaming capitalism broadly.

The entire concept of corporations is a legal entity to shield liability and thus encourage entrepeneurs to take risks. But as any person who has ever run a business knows there are conflicts of interest between lenders, stock holders, managers and employees. It is easy to feel there are solid lines of expected behavior, but in fact there are agrieved and tears in many ventures. Even criminal prosecutions are less than black and white. I can make a pretty compelling case that Kozlowski and Skilling were prosecuted in the grey areas of law, and they are mostly guilty of being unpopular.

What if I accepted a loan when I knew I was headed to bankruptcy? There is malice, but no fraud. What if I got people to invest in my hedge fund, and I was a bad investor? No malice or fraud. What if I got investors for project A, and then used the money for project B? Is this fraud?

A lot of latitude is given in capitalism to managers, and rightfully so. It is expected that investors will be careful in giving money to managers. We hope that money will police itself. If people were investing in Madoff or even Fuld, they have been adequately punished. Do we blame capitalism for the excess punishment given to investors unable to do their jobs? I guess you do if you want to protect the rich.

Or we can say, this is our Minsky Winter, that will teach another 2 generations of investors how to stear clear of danger. Its not like there wasn’t evidence of the trouble, just too few trained investors.

Merry Christmas to all…

So you’re American I take it. Are your hands clean? If not, what should you have done differently?

just the other day i saw a portion
of the sky littered with geese.
the -v- was being reevaluated.
yet one goose took the spearhead
and the others followed and
formed the wedge. nothing changes.
everything changes. good stuff.

I’m thinking of a pair of smug homeowners I talked to a couple years back who condescendingly advised me, and anyone else who would listen, why adding granite countertops was a great investment (”you get the most bang for your budget remodeling the kitchen!”) – but there were plenty like them I encountered in the last year of the Bubble. Dumb chatterers whose heads were filled with whatever thoughts cable TV filled them with.

The basis for the American dream is a foreign policy of pure evil, coated with a frosty icing of greed and wishful thinking for consumption back home.

Nobody’s hands are clean in this. Nobody at all. Not here in America.

But if it’s any consolation to you guys, I think of you ‘doomers’ who saw how f—ed up the economy was several years back as being the least culpable.

Well OK as an American you can say I haven’t learned anything. You are entitled to your opinion.

But when you have an inverted pyramid, where the borrower who fibs about his income is at the bottom and the banks that bet $50 trillion on whether he can make his mortgage payments at the top, I would allocate the blame as follows:

Banks 100%
Debtor 0%