'Merle Hazard' sings the hedge-fund blues
— -- Nashville singer Merle Hazard knows a thing or two about loss — financial loss, that is.
Hazard, a down-home country crooner — an "alter ego" of a Music City investment guru with an aptitude for price-earnings ratios, put options and financial leverage — is using the power of music and parody to tell a now-familiar modern tale of American tragedy: a risk-lovin' hedge fund manager who watches his beloved fund go belly up.
The song H-E-D-G-E (based on the tune D-I-V-O-R-C-E by the late, great Tammy Wynette) is spreading like a virus on the social-networking site YouTube. Hazard, clad in his Sunday best cowboy threads, dedicates the tune of hedge-fund heartache to "the hardworking men and women on trading desks all across America." (Watch it at www.youtube.com/watch?v=LtcnXLDnXvs)
Just as it went down on Wall Street, Hazard sings about how his once-wealthy hedge fund skidded into bankruptcy after bets on mortgage-backed CDOs (securities) with mostly borrowed money went bad. "I was leveraged 10-to-1," the singer croons. "But it should have been 2 or 3. Oh, how I wished I had a working H-E-D-G-E."
Hazard is the fictional brainchild of Jon Shayne, a button-down investment adviser and fan of Warren Buffett with a colorful past. In the early '80s, he penned some humor for The Harvard Lampoon, back when Conan O'Brien was in charge of laughs at the publication. More than 20 years ago, he also wrote songs and played keyboard for a local garage band, The Young Nashvillians.
Shayne, who runs Nashville investment advisory firm Shayne & Co. and is listed as Hazard's rep on the YouTube posting, admits — but only off the record (wink, wink) — that Hazard and he are one and the same. "Like Batman and Bruce Wayne," he quips, "we never appear in the same room together."
He says he came up with the name Hazard because it's a pun on "moral hazard" — the notion that if investors are bailed out on their bad bets, it would encourage more reckless risk-taking in the future.
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