Let hedge funds manage taxpayer money?

October 28th, 2007 | Category: Stocks, Newspapers, Mutual Funds, Management

In a New York Times column dripping with sarcasm, the brilliant Ben Stein wonders whether we should give top hedge fund managers some taxpayer dollars to manage:

Supposedly, a number of wizard managers consistently earn more than 40 percent a year for their hedge funds. Yes, I know that that conflicts with every bit of investment and market theory — or nearly every bit. I know that such a thing should be impossible. But, supposedly, magicians like Steven A. Cohen, founder of SAC Capital in Stamford, Conn., can regularly earn 40 percent a year — often more — on their capital.

But why waste our moment on envy or

disbelief? Let’s put Mr. Cohen to work for the greater good. Let’s have the federal government issue about $10 trillion in Steven A. Cohen National Debt Retirement Fund Bonds. After interest is paid on the bonds, whether Mr. Cohen makes 40 percent on the money, the fund will return 36 percent a year. That means that in only two years, he will have made roughly $10 trillion for the taxpayers, with which he can pay off the entire United States federal debt.

Continue reading Let hedge funds manage taxpayer money?

Original post by Zac Bissonnette

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