For several years, the little person had to sit by and watch the rich get richer because the rich were invested in hedge funds. These hedge funds were making billions -via naked shorting. Now consider that Wall Street has some very smart people who are very good at playing dumb after the money is gone. The people running the hedge funds had to have known that their constant skimming of billions would eventually take a serious toll on the markets. Knowing their hedge funds would eventually come under attack as the source of the problem and chaos, executives knew -something needed to be done. Inviting the little person to play and invest in a public hedge fund became the answer. Create an IPO of a hedge fund, make billions on the IPO, walk away with mega-wealth, and let the little person take the loss when the time comes where the markets crash and the rules are changed which takes away the billions easily stolen by the hedge fund. Now, you must ask yourself, was the slew of recent hedge fund IPO’s done to lure the little investor into the upcoming implosion while the founders and top clients escaped with IPO billions on top of the billions they already sapped from the markets using naked short trades? One thing is for sure, if the rules change and the SEC enforces naked shorting, it will become much harder for hedge funds to post multi-billion dollar profits. The little person now invested in a public hedge fund will probably lose significant value. To date, many of these recent publicly traded hedge funds are trading at levels well below their offering price, giving the impression that the smartest of the little people investors have figured it out -they bought a dying star. The hedge fund masterminds pocketed billions and billions of dollars with their naked shorting and IPO offerings of hedge funds that will now wither if the SEC does its job. It’s pretty clear that naked shorting has been pegged has the problem, the source of billions missing, and billions lost by those who are FORCED to play by the rules. If naked shorting is not dealt with, the implosion will be far worse than anybody can imagine. Right now, Paulson and Bernake are merely placing beams against the ceiling and bailing water coming in from the stress fractures. Soon, the weight will become too much, and old Uncle Sam will be buried in the bottom of that mine.
I’d like to think that they went public to increase their ability to leverage themselves further. But I have a certain feeling that hedge funds dumped on Lehman just like they did BS. They were trying to do the same to MS but were finally stopped.
It’s always doom and gloom with you, LVG.
LVG - I think you need to go get a lesson from some hedge fund treasury guy. Naked short-selling may happen in the very short term but nobody is “constantly skimming billions” with naked short selling. I’ve been risk manager of two multi-billion dollar hedge funds doing huge volume and we have never done a delivery failure due to a naked short. Not once. You just can’t run a decent and sustainable business doing that stuff. Naked short-selling absolutely happens but it just can’t be the foundation of anyone’s business. If you run a hedge fund, you spend your life convincing people that you have a sustainable, honorable, and scalable business plan. Abusive short-selling doesn’t fit any of those categories.