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Beating the system with Hedge Funds: this makes me sick

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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:44 PM
Original message
Beating the system with Hedge Funds: this makes me sick

http://online.wsj.com/article/SB120036645057290423.html?mod=todays_us_nonsub_page_one


<snip>
On Wall Street, the losers in the collapse of the housing market are legion. The biggest winner looks to be John Paulson, a little-known hedge fund manager who smelled trouble two years ago.

Funds he runs were up $15 billion in 2007 on a spectacularly successful bet against the housing market. Mr. Paulson has reaped an estimated $3 billion to $4 billion for himself -- believed to be the largest one-year payday in Wall Street history.

Now, in another twist in financial history, Mr. Paulson is retaining as an adviser a man some blame for helping feed the housing-market bubble by keeping interest rates so low: former Federal Reserve Chairman Alan Greenspan. (See article.)
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Hydra Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:47 PM
Response to Original message
1. Ironies abound
I bet Greenspan warned him about the coming crisis- "smelled trouble" indeed.
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:49 PM
Response to Reply #1
4. i konw a few people who bet against the boom
including some who lost because they mistimed their bets. Goldman Sachs, for instance, is making money off this, since they bet on collapose
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:04 PM
Response to Reply #4
13. And they had the benefit of the other
Edited on Tue Jan-15-08 04:22 PM by malaise
Paulsen. Funny how they escaped unscathed. Makes you shake your head and wonder.

Sp.
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:19 PM
Response to Reply #13
19. well, I was smart enough
with no financial training at all, to understand that rates were going up, and that I couldn't afford the ARM I was offered last year, so it's not that tough. I am much more shocked by those that thought the bubble was going forever.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:23 PM
Response to Reply #19
20. Valid point
but you didn't make billions betting on it.
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:56 PM
Response to Reply #20
21. well, I didn't have billions to bet
but I made thousands betting on an interest rate hike, and saved myself thousands more by not taking a mortgage I would, very soon, be unable to afford. had I known how badly banks were exposed to this (I certainly didn't) I would have shorted their stocks.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:58 PM
Response to Reply #21
22. Good for you n/t
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 05:01 PM
Response to Reply #22
23. thanks
I missed out on the tech boom and the housing boom, gotta be ahead of the curve once, right?
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:52 PM
Response to Reply #1
5. That is what makes me sick
These men work all sides don't they?
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sam sarrha Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:56 PM
Response to Reply #5
8. i would too if could even pay the F'n rent..
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Hydra Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:57 PM
Response to Reply #5
9. Yeah, the biggest joke in the world:
"Insider Trading"

Unless of course you are Martha Stewart.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:01 PM
Response to Reply #9
11. Bingo n/t
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The Backlash Cometh Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 05:35 PM
Response to Reply #1
24. Greenspan guilty of insider training? I would be shocked!
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Hydra Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 06:09 PM
Response to Reply #24
25. Yeah, I bet
:evilgrin:
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The Backlash Cometh Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 06:26 PM
Response to Reply #25
26. hee-hee. How did you like my freudian slip?
I meant to say insider trading.
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Hydra Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 06:30 PM
Response to Reply #26
28. That was pretty good!
Greenspan doesn't need to inside trade- he can print his own money. He takes care of his friends, though, apparently.
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CorpGovActivist Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:47 PM
Response to Original message
2. K&R n/t
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wtmusic Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:49 PM
Response to Original message
3. Why?
Paulson isn't making the market go down. If anything hedge fund managers create a check against runaway optimism.

More power to him if he can make some money in this lousy market.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:53 PM
Response to Reply #3
6. I have a problem with Greenspan being an
adviser.
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sam sarrha Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:54 PM
Response to Original message
7. and i bet he didn't pay 1 cent in taxes on it.. unlike the common man who wins the lottery...we pay
the big taxes up front before we get the money..no loopholes
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Lou Syffire Donating Member (28 posts) Send PM | Profile | Ignore Tue Jan-15-08 06:29 PM
Response to Reply #7
27. No, he paid a business friendly 15% tax on it
because it was profit on a transaction.

You, who were a liberal arts major OTOH, paid 33%.
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sam sarrha Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 07:28 PM
Response to Reply #27
29. that is before the loop holes, etc. bill gates paid the same amout of taxes as a worker making $80K
Edited on Tue Jan-15-08 08:13 PM by sam sarrha
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Gman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 03:58 PM
Response to Original message
10. Poor Greenspan
He was a super-human god in the late 90's during the tech boom. His name was mud when the bubble burst. He was a wonder-boy when interest rates were low and investment was going crazy. His name is mud again since it all collapsed.

I don't know if he's a good guy or a bad guy.
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elizfeelinggreat Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:09 PM
Response to Reply #10
17. He is married to
Andrea Mitchell. Does that help?
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jgraz Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:02 PM
Response to Original message
12. What's really sick is that we'd be bailing him out had he bet wrong
God forbid those rich people should actually lose money.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:05 PM
Response to Reply #12
14. Yep taxpayers always lose n/t
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gateley Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:06 PM
Response to Reply #12
15. Yep, THEY lose their money, WE bail them out.
And we have no say in it. nt
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elizfeelinggreat Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:08 PM
Response to Original message
16. interesting
Interesting that they are reporting this when they didn't report that financial hedging around 9/11. I remember reading about it and not getting any details, does anyone else remember that? short selling or something?
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 04:13 PM
Response to Reply #16
18. Very good point
There were lots of details here. The dungeon may be a good place to look.
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high density Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 07:33 PM
Response to Original message
30. After you "reap" $3-4 billion, why the heck don't you retire?
:crazy:
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sam sarrha Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-15-08 07:52 PM
Response to Reply #30
31. cause theyre mentallt ill, the suffering they profit from goes way past OCD, THEY NEED INTERVENTION
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