Our new money!

[iLander]

He didn't earn his money the way you describe, iLander. That's absolutely the case.

Did I forget to mention he's in the closet and I'm not and I know he's in the closet and he knows I know? Oops!

Then you definitely should pity him! When you're around he squirms!

That has got to make you laugh on some level.

 

[Imdanny]

He didn't earn his money the way you describe, iLander. That's absolutely the case.

Did I forget to mention he's in the closet and I'm not and I know he's in the closet and he knows I know? Oops!

Then you definitely should pity him! When you're around he squirms!

That has got to make you laugh on some level.

I can laugh about it now. At the time it was really awful.

 

[NovemberBride]

iLander, you mean that guy from Solomon Smith Barney was lying when he said, "We make money the old fashioned way. We earn it."?

OMG! No! My illusions have all been shattered!

Yes, I'm judgmental. I think the finance industry has its place. I think most of the people who work in banking are good, honest people working for a living. But I will not excuse the mess the financial industry has made of its own accord and for its own greed such that today we have the Fed printing $2 trillion in paper (QE) and giving via the back door to the banks to buy their toxic assets the risk of which was their responsibility to manage in the first place. When you've got 20 hedge fund managers last year each being "paid" 1 billion in a year, it doesn't take a genius to figure out that the financial system has gotten out of control. It was regulated in 1933. It should have stayed regulated. This whole country is in for a very hard time now.

Agree 100%.

I don't understand who pays these hedge fund managers? They take home up to 20% of ASSETS, not profit or growth. If you invest $100, you pay them $20 per year, even if he doesn't make a penny for you! In 4-5 years, you can be completely out of money, but hey, the hedgie is sure happy. Who, exactly, says "Sign me up for that"?

The reason we are in such a bad state, is that the hedgies will do ANYTHING to make money. They will lie and cheat. They make up "investments" that they sell long to Grandma and then sell these "investments" short as soon as Grandma is outside the building. The problem is that Wall Street is broken; the system of competitive back-stabbing that these guys go through to get to the top is Draconian. They fight and step all over each other, and their bosses encourage that. "A few lies" are not a big issue in their minds. The big macho fight to the top, is all they are about. Of course they parsed the same bad mortgage 5 different ways. They have no integrity and no guilt. And they are all still working away in their offices as we speak.

To come back around to their lack of common sense: a friend of mine had a Harvard MBA Hedgie-in-training in her apartment. This guy had gone to the top prep schools and college, he had been on his way to the top at Wall Street for his entire life. There was a pigeon nest on her fire escape. The hedgie was amazed that pigeons come from eggs.

True story.

I am sorry, so much of this is just untrue. I am not sure why you hate people in the financial industry so much, but you sure seem to have a grudge against them. Since I am one of them, I feel compelled to keep responding to these ludicrous assertions and put the facts out there.

1. I know of no hedge fund that charges a management fee of 20% of assets and I have read the prospectuses for hundreds of hedge funds throughout my career. The only people who invest in hedge funds are high net worth individuals, and they would never pay a 20% management fee (and if they did, I am not sure why you care, it's not as if it's your money). Hedge funds typically structure their fees in two parts. Part 1 is a management fee that is typically an annual fee of between 1-3% of assets under management. This covers their operating expenses. Part 2 is called a promote or incentive fee and is a % of earnings, usually over a certain hurdle. For instance, a typical fund ,might charge a 2% management fee (on total assets under management) and then an incentive fee of 20% of any earnings in excess of $20 million. Again, this is all money of high net worth individuals. To be clear, no hedge fund received any government bail-out money.

2. On what basis do you say that hedge fund employees lie and cheat as a general rule? Do some of them lie and cheat? Sure, so do some doctors, plumbers, teachers, etc. But to say they all have no problems with lying and cheating is absurd unless you personally know all or a large portion of them - which I doubt you do. Also, you seem to think they are all males - if you actually knew the industry you would know that there is an ever increasing number of women in high positions throughout the financial world. Are hedge fund managers and others in the financial industry ambitious and competitive - sure, you have to be to get into a job that requires you to work around the clock and basically put your job before everything else for at least a few years.

3. Hedge fund managers don't sell anything to grandma unless grandma is a multimillionaire. Hedge funds are unregulated - in order to stay that way they can only allow investors who are high net worth individuals. That means you must have at least $1 million in assets not including your primary residence. So please don't act as if these guys are running around ripping off retirees because it's just not true.