Democracy and Capitalism

The House of the Rising Sons blog voices an important concept:

Democracy is not an outgrowth of free markets. Democracy and capitalism are antagonistic entities.

More on this is said and is worth reading. The same post also quotes a successful hedge fund manager who, not trusting banks anymore, has suspended operations. He has critical words for the financial elite and governing class. For example:

legislation was repeatedly brought forth to Congress over the past eight years, which would have [reined] in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it.

The establishment is out of control. It is a historic moment in which informed people need to step up and recognize the other thing stated in that blog entry:

Democracy, like individualism, is not based on personal gain but on self-sacrifice.

Image Credit: GDAEman on DeviantArt

Hedge Funds: The New Dot-Com

Hedge funds and private-equity firms today are like the dot-coms in 2000: Ask for money and you'll get it. They bid up the prices of everything. The amount of money flowing is almost out of control, and it's making everything overvalued. A client of mine said it's like there are 11,000 planes in the sky and only 100 good pilots -- an accident is bound to happen.

—Ray Dalio of Bridgewater Associates, quoted in Barron's, May 26th 2007 edition

Sources:

The Hedge Fund Implode-O-Meter quote of the week.

Campbell Co. on Wrong Side of Carry Trade

According to the Hedge Fund Implode-O-Meter, reporting August 19, 2007 from Bloomberg as the original source, Campbell & Co. is feeling some stresses.

This Towson, MD-based fund run by Terri Becks is said to be hurting as a result of the breakdown of the Yen carry trade, as well as the ensuing credit crunch in general. The "completely" computer-driven fund is down 10-12% as of the end of July, according to a source. The fund reportedly deals in futures, stocks, and bonds.

Once again, we cannot help but be amused as a fund claiming to be "hedged" for volatility is showing signs of sickness upon encountering some actual rough seas.