"Welcome to Hedgistan," Land of Raping, Pillaging, and Betting
June 3, 2007 (LPAC)--In a set of articles on the front page today, Canada's Financial Post headlines the frenzied takeover operations and fin-de-siecle lifestyle of the "New Titans" -- the top hedge fund managers of Canada.
One article, "Welcome to Hedgistan," quotes a luxury jewelry merchant: "$100,000 watches are just flying out of the store, there's just so much money in the city right now." A clothing store man says "it is not uncommon for a guy to buy three Brioni suits for $5,000 apiece." The Post reports that "like almost everyone else on [ultra-ritzy] Bloor Street, that store's business is booming."
The 'pirates' clearly rape and pillage on Bay and then squander on Bloor.
The paper explains that "Bloor Street is one of those 'streets of dreams' in a place called Hedgistan, a borderless country run by, and for, a new breed of entrepreneur -- private equity magnates and hedge fund managers who have quickly made vast fortunes by breaking all the rules and conventions about how to run a business and how to invest in the markets. Fuelled by a seemingly endless supply of pension fund money, private equity's financial engineers are currently on a global spending spree, snapping up companies like Chrysler and America's largest real estate company. It seems no company is immune from these top-of-the-financial-food-chain predators. Some pundits talk openly and ominously about the death of the public markets. There is no question the private equity tycoons have the financial muscle to make good on the threat."
The Financial Post notes that a central strategy of hedge funds is the betting of large sums on the fall of companies and markets, including stock shorting -- through which unprecedented nominal profits are made off of the ongoing collapse of the financial system.