09-20-2009, 04:48 PM
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So Fucking Lame
Industry Role:
Join Date: Jun 2009
Location: St. Petersburg, FL
Posts: 12,158
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HA! The financial crisis summed up...
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O.K., students: Jack the Hedge-Fund Manager is running $250 million from the Yahoo City Municipal Employee Pension Fund. He paid a 1 percent transfer fee to the placement agent who steered the money to him through a feeder fund; he takes 2 percent to manage the money and 20 percent of any profit he makes with it. Now, if Jack buys ?puts? on shares of triple-leveraged short-financial-index exchange-traded funds (E.T.F.?s) and Brazilian-coffee-futures options while he sells calls on shares of double-long agriculture-index exchange-traded notes while buying AAA-rated high-yield commercial-debt obligations, which he margins to purchase discounted tranches of B-piece positions in securitized mortgages, and he hedges all of this with options on a portfolio of gold-producer stocks?and does all of this in Sri Lankan rupees?precisely how much does this leave in Frank the Phys-Ed Teacher?s I.R.A. account when the market tanks and the hedge fund blows up? Bonus question: If you managed to follow all of this, would you care to explain the difference between investing with Jack and plunking your entire life savings down in a Las Vegas sports book on a pony with a 50-to-1 shot in today?s third race at Hialeah?
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http://www.vanityfair.com/online/pol...-and-more.html
That about sums up what got us here...
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