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.
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Labels: hedge funds