Rewards for Failure

This post is not about the Ruling Classes (CEOs, government bureaucrats and politicians) who loot the public to get richer & more powerful while failing to deliver anything to the common man and woman.  This post is about the beefers, aka big, evil funds, mostly private investment partnerships also known as hedge funds, who led the hoard of financial vikings who looted the nation before and during the Panic of 2008 and its aftermath.  A new book shows that nearly the entire industry is a scam.  The hedge fund managers make plenty of money, but the investors get nothing cumulatively.  Remember that old book and adage about the financial industry during the Great Depression - "Where are the Customers' Yachts?".  The hedge fund industry is a reprise writ large.

A review of "The Hedge Fund Mirage: The Illusion of Big Money and Why It's Too Good to be True" [Simon Lack, Wiley] in the weekend Financial Times contains all you need to know.  "If all the money that's ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good."

More: "Never in the field of human finance has so much been charged for so little."

And:  "The prime purpose of the sector is to provide jobs and wealth creation for the industry professionals:  managers, consultants, allocators, prime brokers, and other service providers."

The total amount of money lost by hedge funds in the Panic of 2008  - "some $450bn-odd vaporised in a single year ... destroyed all the value that hedge funds ever created."

The managers made big money. "From 1998 to 2010, the cumulative split was just $9bn to investors versus $440bn to managers."  That is a breathtaking vision of pure greed and fraud.

The author has the numbers and data to back up every conclusion ... and every smirk of disgust at the hogs at the trough.  In the end, though, he blames the investors.  They are the stupid cows being milked and leeched by the parasites in the hedge fund industry.  They want to get ... more.  And they get what they deserve - less.

Your author, the Bunkerman, has been saying and writing this for years, to the smirks and jibes of various pontificating (and well paid) pundits and some hedge fund managers themselves.  It's nice to see Bunkerman proven right ... again.