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My Two Cents

Hedge fund absurdity

Chris Farrell May 1, 2009
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I was going to write an article about how ridiculous it was for the hedge funds that played hardball with Chrysler’s debt–and lost–to complain about how unfair the government acted toward them. One of the Wall Street financiers that lost out is Joseph Perella. He was once half of the dynamic duo at First Boston that threw hundreds of thousands of workers out of a job during the 1980s mergers and acquisitions mania. They destroyed many a managers career along the way, too. (The other half was Bruce Wasserstein, now head of Lazard.)

But Steven Pearlstein at the Washington Post got there first with this column.

There may be nothing more pathetic than a hedge-fund manager worked up in a moral lather, complaining that he hasn’t been treated fairly.

Since when did any of these guys ever worry about fairness?

Certainly fairness was not an overriding concern of hedge-fund managers when they threatened to move even more of their operations to the Cayman Islands if forced to pay a regular tax rate on their exorbitant management fees.

Nor do I recall receiving even a single e-mail from a hedge-fund manager complaining about how unfair it was that the government stepped in to bail out creditors and counterparties of Citigroup, Bear Stearns and AIG.

But now that these hedgies are looking at the butt end of a government-imposed cramdown that would give them only 30 cents of each dollar owed by Chrysler, suddenly they’re all about fairness and the rule of law.

What you need to know about these vultures is that their idea of fairness is throwing 100,000 people out of work and denying retirees their pensions and their health benefits just so they can liquidate the company and maybe squeeze an extra 15 cents on the dollar from their Chrysler debt.

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