The Billion-Dollar-A-Year Hedge Funders Under the Spotlight

On Capitol Hill today…the latest installment of ‘why are we in such a financial mess?’

5 hedge fund managers were called to testify.  On average, the group makes more than 1 billion dollars a year.  That works out to nearly 3 million dollars A DAY.

Reminder — hedge funds are pretty much un-regulated entities that enjoy special tax breaks. 

Here’s how the AP reports the day:

"Two fund executives, Citadel Investment Group Chief Executive Kenneth Griffin, and Philip Falcone, senior managing director of Harbinger Capital Partners Funds, said they support the creation of public exchanges or clearinghouses to provide transparency for credit default swaps.

"An open and transparent market for these transactions would reduce confusion and improve understanding" of trading in complex derivatives such as credit default swaps, Falcone said in testimony prepared for the hearing.

Credit default swaps, a roughly $60 trillion worldwide market, played a large role in the credit crisis that brought the downfall of Lehman Brothers Holdings Inc., a government rescue plan for giant insurer American International Group Inc., and Merrill Lynch & Co. selling itself to Bank of America Corp."

You can read some of their prepared remarks here: http://blogs.wsj.com/deals/2008/11/13/hedge-funds-on-the-hill-key-statements-from-the-congressional-hearings/