Friday, February 23, 2007

What do You Say About a Punt?

Several people have emailed me to ask why I haven't commented on that hedge fund thing that was released yesterday by the President's Working Group on Financial Markets. The reason is pretty simple: what do you say about a punt?

The study essentially says that everything is OK and that "market discipline" is all hedge funds need to stay in line. It did suggest some non-binding guidelines on transparency and stuff.

So in other words, the study group decided to pass this entire subject to future generations, for better or worse. That's not necessarily a bad idea. However, the next time a fund goes belly up, will there be a bailout as there was with Long-Term Capital Management, or will the response be, "Why not let the market determine what happens to you guys?"

© 2007 Gary Weiss. All rights reserved.


Wall Street Versus America was published by Penguin USA on April 6.
Click here for its listing and here for more information on the book, from my web site.


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