Speaking of hedging, I just read an article in The Washington Post that revealed the massive incomes generated by several hedge fund managers that bet big on subprime mortgage securities going south.
John Pualson personally earned $3.7 BILLION with a capital “B” last year. Now if that isn’t absolutely killing it, I don’t know what is. He’s not alone either. Quite a number of other fund managers completely cleaned up betting on everything from the subprime mortgage collapse to the rising cost of commodities. These guys made billions.
The Post goes on to quote Daniel Strachman, a former hedge fund manager and author:
“It’s clear somebody has to win and somebody has to lose,” he said. “It’s not pretty at all because people say, ‘Oh my God. Look how much money these guys are making while people are losing their homes and are complaining about the cost of eggs and sugar.’ But so what? We don’t live in a society that is pretty all the time. That’s why it’s capitalism.”
You know, as much as I hate seeing the little guy (that’s you and me) lose as a result of the current economy, I have to agree with Strachman. Not everybody wins. That’s life and that, indeed, is capitalism.
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