<p>These are private funds…getting non-public information…</p>
<p>Really builds confidence in the markets… ;)</p>
<p>Many of the hedge fund managers worked for Goldman Sachs earlier in their careers… :).</p>
<p>Even if hedge fund managers did not trade FNM and FRE after the meeting…they could have traded other issues based on the non-public information. Or as one manager did…the manager stopped buying FRE…or was it FNM…doesn’t matter.</p>
<p>So these guys are taxed less…and get better info…</p>
<p>"At the time Paulson privately addressed the fund managers at Eton Park, he had given the market some positive signals – and the GSEs shares were rallying, with Fannie Maes nearly doubling in four days.
William Black, associate professor of economics and law at the University of Missouri-Kansas City, cant understand why Paulson felt impelled to share the Treasury Departments plan with the fund managers.
You just never ever do that as a government regulator – transmit nonpublic market information to market participants, says Black, whos a former general counsel at the Federal Home Loan Bank of San Francisco. There were no legitimate reasons for those disclosures.
Janet Tavakoli, founder of Chicago-based financial consulting firm Tavakoli Structured Finance Inc., says the meeting fits a pattern.
What is this but crony capitalism? she asks. Most people have had their fill of it.</p>
<p>Thanks for sharing this, dstark.
H and I were discussing last night that Bloomberg has requested testimony (publicly available by law) of Fed during bailout period…</p>
<p>I can’t agree…because then I am out of business. ;)</p>
<p>I think we should have a little more honesty…which isn’t a high bar to reach.</p>
<p>I think we should treat people a little more equally…
I think we should look at taxing short term gains as short term gains…instead of taxing some of these gains as long term gains… (this would hurt me a little too).</p>
<p>And giving tax breaks to hedge funds is ridiculous.</p>
<p>Performersmom…I think Bloomberg is doing a great public service by trying to get information released to the public.</p>
<p>I’m interested in knowing how I could take a short-term gain and have it be classified as a long term gain. I haven’t been able to find that technique, although maybe I haven’t looked hard enough.</p>
<p>That article is absolutely sickening. And Paulson did nothing illegal! He can legally disclose nonpublic material information to his buddies as long as he does not profit or benefit from the disclosures. It is his friends who break the law by trading on the information, but conveniently:</p>
<p>Can someone explain to me why hedge fund managers pay a top tax rate of 15% on their income? That’s even better than long-term capital gains rates. Do they somehow call their income dividends?</p>
<p>Three Greenwich hedge fund managers have just won $254 million in the CT lottery:</p>
<p>“Just last week, the Wall Street Journal reported that there was a group of “well-connected investors and analysts with access to top Federal Reserve officials who give them a chance at early clues to the central bank’s next policy moves”<em>that knew the details of the Fed’s Operation Twist in August, over a month before its announcement in September. By that time, the chance to make profits off 10-year Treasury bonds, which soared after Twist was publicized, had long passed.
The WSJ pointed out the reasoning behind the sharing:</em>
Conversations are important to both sides, making it difficult for the Fed to completely close its doors to traders and analysts. Fed officials want to know how investors might respond to changes in monetary policy and to avoid surprising markets. Investors, meanwhile, reveal developments that might pose unseen dangers to the U.S. economy, say people familiar with the matter.
Just browsing through<em>Treasury Secretary Timothy Geithner’s schedule from 2010, which was obtained through a Freedom of Information Act back then, contact between the regulator and top financiers seem commonplace. We noted one day (May 7) where he received and made calls to Morgan Stanley’s James Gorman, Goldman Sachs’ Lloyd Blankfein, JP Morgan’s Jamie Dimon and Blackstone’s Larry Fink.
The WSJ noted a similar list of contacts for New York Fed President William Dudley:
Over the past two-and-a-half years, Mr. Dudley has had dozens of private meetings, according to his calendar, which lists SAC Capital Advisors, Citadel Investment Group, Duquesne Capital Management, and Tudor Investments, among others.</em>Lloyd Blankfein, chief of<em>Goldman Sachs Group</em>Inc., and Mr. Fink, of BlackRock, also had private meetings, according to Mr. Dudley’s calendar.”</p>
<p>I think this is just nonsense…especially these private meetings with hedge funds. </p>
<p>These meetings should be shown on something like CSPAN.</p>
<p>And Bernanke talks about giving the people transparency. What bs.</p>
Don’t you agree dstark?</p>