Back in The USSR? Just A Boomer Memory? Ask the Financial Industry!

finger3When it comes Chrysler the hedge fund managers were asked to take one for the Obama team.  Fortunately, for their investors they did their job, as they should have, and took one for their own team!  Hedge funds hold approximately $1 billion in Chrysler bonds.  It was those hedge fund managers that refused the government’s offer to take approximately thirty cents on the dollar.  Obama turned around and accused them of holding out “for the prospect of an unjustified taxpayer-funded bailout.”  The only things “unjustified” in this case are taxpayer-funded bailouts to begin with and for a U.S. President to criticize financial business managers for doing their job!

Financial Industry Outraged and Fearful

Many in the hedge fund industry have been outraged but not many have spoken out publicly. There are even questions about whether the Obama administration threatened to ruin them if they did not agree to his plan.  The industry is genuinely afraid in the face of Obama’s power.  

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 wrote the following in an open letter:

  • “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.”

He admitted himself he was “fearful writing this”.  Clifford Asness is exactly right!  “It is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can”.  For more on Cliff Asness (click here)

We Still Live in the USA

Why, in the United States of America, should anyone be afraid of the government  for doing their job legally and properly or worse yet be afraid to express their honest opinion?  Isn’t that and legalizing marijuana what liberals fight for?  Something is drastically wrong.

In a historical move President Obama removed the CEO of General Motors for not doing his job!  Never in U.S. history has the President of the United States removed a CEO from a publicly held company.

Simple Business Question: “What are you here for?”

An Investment Managers obligation is to his investors.  If you ask someone working for Chrysler or GM the simple question, “What is Chrysler or GM here for?”  Many would say “to build automobiles”.  Wrong!  Wrong!  Wrong!  It is to make money!  Building automobiles and selling them is only a means of making money; exactly the same as any other business; exactly the same as an investment manager or hedge fund manager.  Their job is to make money.

By not yielding to the Presidents threats these hedge fund managers are doing their job!  If any of these hedge fund managers yield to the Obama pressure they should not only be fired, but they should be prosecuted for theft.  If my investment manager accepted such a deal I would be pursuing the real law, not Obama’s.

That is not a threat to my Investment manager!  It is a damn promise!!!

This is still the USA!!!  At least for now!!!  Papa B.

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