'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.

Unlike the bearish lyrics to H-E-D-G-E, the reaction to Hazard's YouTube performance has been bullish.

"It's been like a light bulb going off," says Shayne.

One online poster chimed in: "Take this show on the road … we need a little humor with this market …"

Communication with humor, Shayne agrees, is a powerful way to get a message across.

"It shows that a spoonful of sugar makes the medicine go down," says Shayne.

Even medicine as painful as this lyric in H-E-D-G-E: "I bought a couple of mortgage-backed CDOs, and the prices took a fall. Now I'll tell you what happened when I got my final margin call. My H-E-D-G-E F-U-N-D went bankrupt today."

The success of Hazard's foray into singing about money all but guarantees that his creator is planning the release of another single aimed at the masters of the universe who run Wall Street. Stay tuned.