Hedge Fund Gamblers Earn the Same In One Hour As a Middle-Class Household Makes In Over 47 Years

[marmar]

AlterNet / By Les Leopold

Hedge Fund Gamblers Earn the Same In One Hour As a Middle-Class Household Makes In Over 47 Years
How do they make so much money? Where does it come from? How can hedge fund firms with fewer than 100 employees make as much profit as firms with thousands of employees?

April 11, 2011 |


We live in a very, very rich country. Yet we seem to be utterly consumed by a collective hysteria that we’re about to go broke. Historians are certain to look back at this period and wonder why the richest country in history consumed itself in a struggle over how many teachers to fire.

How rich are we?

Just take a look at the latest reports on what the top hedge fund managers haul in. In 2010 John Paulson led the list with a record $4.9 billion in personal earnings. That’s a whopping $2.4 million an HOUR. Here’s a factoid to make you wretch: It would take the median US household over 47 years to earn as much as Paulson pocketed in just 60 minutes. And, every hedge fund manager pays a lower tax rate than the average family.

The top 25 hedge fund earners took in $22.07 billion in 2010. Thanks to a generous tax loophole these billionaires will pay a top tax rate of 15 percent instead of 35 percent. Closing that loophole on just those 25 individuals – just 25 guys who wouldn’t miss a penny of it -- would raise $4.4 billion, which is enough to rehire 126,000 laid-off teachers. ..............(more)

The complete piece is at: http://www.alternet.org/economy/150570/hedge_fund_gamblers_earn_the_same_in_one_hour_as_a_middle-class_household_makes_in_over_47_years/

[dkf]

1. Not all hedged funds made money.

Quite a few of them crashed and burned during the earlier downturn. Their partners don't even get paid if they dont make money.

[mod mom]

4. as the commercial says..they make $ whether you make or lose your investment $.

[GillesDeleuze]

7. No. They can still take a percent fee of principle, annually.

1% of several hundred billion is still a lot of money, even per minute.

[dipsydoodle]

2. The reason is that they are

gamblers.

[Demeter]

5. They are skimmers and cheats

[liberal N proud]

3. Mostly at the cost of those middle class workers.

[Starry Messenger]

6. And if we're not nicer to them, they might leave!

:sarcasm:

[raouldukelives]

8. Gambling with your money pays well

Either way, you lose. If they do make money it's probably from something you would vehemently oppose if you faced it in your daily life anyway. You know, MIC, big oil, health insurance corps, child labor. Better to be broke than make your money from misery.

[Jefferson23]

9. Worse than the mob, as their actions impact is devastatingly far worse. See Stiglitz

and hedge funder Hugh Henry. ( This is from a little more than a year ago)




Watch Hedge Funder Hugh Hendry Fight WIth Joe Stiglitz And Say He Wants Greece To Collapse



Joe Stiglitz and Hugh Hendry duked it out last night on BBC's Newsnight.

Stiglitz says that betting on a default is absurd. Hendry is betting on exactly that happening in Greece.

From Hendry's opening line you can tell this is going to be a good fight:

"Um hello? Can I tell you about the real world?"

Then the BBC anchor asks (at 7:28): "So you want to see Greece tumble and the Euro currency tumble?"

Hendry: "Absolutely."

He goes on to say that it's recognizing the unsustainable debt and then Stiglitz cuts him off:

"That's absurd."

Watch the video after the jump. Here's a bit more transcribed:

BBC anchor (around 5:00): "But isn't the truth, Hugh Hendry, that if Greece defaults, that you, that hedge funds like you, make millions?"

"...Some hedge funds make millions. Yeah, the hedge funds who - hedge funds, speculators, and independent central banks are what stands between an economy and hyper-inflation.

"It's very hard to create inflation when you have free markets. When you have the discourse and dissemination of information.

"Look what happens - you get into difficulty and these guys over here say, "hey we don't like it."

"Suddenly the truth hurts! Suddenly we want to abandon the truth. Suddenly speculation becomes a pejorative term!"

Casajuana: "No no no, we don't want to abandon the truth. We admit we have a problem..."

Video at link:

http://www.businessinsider.com/watch-hedge-funder-hugh-hendry-say-he-wants-the-euro-and-greece-to-tumble-fight-with-joe-stiglitz-2010-2

[plumbob]

10. That industry needs to be outlawed. They produce nothing and steal

from those who do.

Predatory parasites.

[GillesDeleuze]

11. hedging, yes. but a total ban on derivative products

would actually reconsolidate risks into primary and secondary markets and investment vehicles. every tick in the stock market could be fatal.

[plumbob]

12. Insurance is a moral hazard; it promotes risky behavior. If the risk were

actually taken, the volatility of the current gamblers' casino would have to reduce. The stock market as an actual reflection of the real economy should be much more sluggish and boring than is the case. Then capital could flow to actual industries which make real products.

The current wave of artificial investing is killing the real economy.