Wall Street hedge manager, David Tepper, took $1,057,692 an HOUR in 2012 -- that's as much as the average American family makes in 21 years!
The top 10 hedge fund managers made $10.1 billion in 2012, which is more than enough to hire 250,000 entry level teachers or 196,000 new registered nurses.
Overall, hedge fund managers make 50 to 100 times more than top athletes, movie stars, CEOs, lawyers, writers, doctors and celebrities.
In a capitalist society your value is determined by what the market says you're worth. The market is not supposed to pay you billions unless you're producing enormous amounts of value for the economy. Bruce Springsteen makes millions because people like his songs, buy his records and attend his concerts. We give him money, he gives us entertainment.
It is also possible to lie, cheat and steal your way to riches without producing any economic value at all.
Hedge funds are investment vehicles for the super rich -- for "sophisticated" investors and institutions who have the resources to gamble for ultra-high returns. How is it possible for hedge funds, most with fewer than 100 employees, to make more money than corporations with tens of thousands of employees?
Hedge funds make their money through illegal insider trading. U.S. Attorney Preet Bharara has convicted about 70 hedge fund managers for obtaining illegal tips. The billionaire Raj Rajaratnam tried, found guilty and put away for nine years. And the third richest hedge fund earner in 2012, billionaire Steven Cohn, is watching as several of his high-level employees succumb to federal indictments. He could be next. It's very hard to indite someone for insider trading. So the odds of ever getting caught are slim given that there are 9,000 hedge funds. "Given the scope of the allegations to date, we are not talking simply about the occasional corrupt individual. We are talking about something verging on a corrupt business model." explained Preet Bharara.
We know for certain that hedge funds colluded with big banks to create mortgage-related securities that were designed to crash and burn, so hedge fund investors could bet against them. In fact, the hedge fund designed the bets by assembling the worst mortgages they could find to place into the securities. Goldman Sachs, JPMorgan Chase and Citigroup have paid over a $1 billion in SEC fines for misleading investors about these shoddy deals. But their hedge fund partners made billions on the insurance and didn't have to pay any penalties.
You can set off rumors, offering the financial medi information that is designed to assist your betting strategies. For instance, give reporters phony info about a particular bank's solvency while you're betting against that bank. If you can help set off a bank run, so much the better, because then you can really win big. However, rumor mongering violates the law...if you're caught. Jim Cramer, over a decade ago he ran a very successful hedge fund. Years later he admitted during an online interview that he fed false rumors to his comrades at CNBC so Cramer's hedge fund could cash in on them.
In high frequency trading you set up your ultra-high-speed computers right next to the stock exchanges so that you get the feed a few nanoseconds before the rest of the world. Then with the help of expert programmers you use that information to automatically jump in ahead of normal investors, so that you buy stocks that others want, jack up the price a little bit and then sell them back to these normal speed buyers. This means that when the rest of us hit the buy button on E-Trade, a high frequency algorithm has probably jumped in there before us, bought the stock we want, and is selling it back to us for a few pennies of profit. They do this millions of times a minute, racking up from $5 to $20 billion a year. It's like a hidden private sales tax that goes into the pockets of high frequency traders. Pension funds and 401ks are fleeced as well.
And the list goes on and on. Some maneuvers are ethically challenged but legal. Other's are borderline. And some are flagrantly in violation of law. But in any event, most Americans would call it cheating. And to add insult to injury, hedge funds have a special tax break called "carried interest" which allows the richest of the rich to pay a lower tax rate than the rest of us.
The whole system of capitalism is designed to scam (steal) from the rest of us. The more bubbles, the greater volatility, the more they are able to steal. It is in their interests to manipulate markets, control access to markets, etc. They destroy value rather than create value. Their criminality won't be challenged or ended.
Taken from here
The top 10 hedge fund managers made $10.1 billion in 2012, which is more than enough to hire 250,000 entry level teachers or 196,000 new registered nurses.
Overall, hedge fund managers make 50 to 100 times more than top athletes, movie stars, CEOs, lawyers, writers, doctors and celebrities.
In a capitalist society your value is determined by what the market says you're worth. The market is not supposed to pay you billions unless you're producing enormous amounts of value for the economy. Bruce Springsteen makes millions because people like his songs, buy his records and attend his concerts. We give him money, he gives us entertainment.
It is also possible to lie, cheat and steal your way to riches without producing any economic value at all.
Hedge funds are investment vehicles for the super rich -- for "sophisticated" investors and institutions who have the resources to gamble for ultra-high returns. How is it possible for hedge funds, most with fewer than 100 employees, to make more money than corporations with tens of thousands of employees?
Hedge funds make their money through illegal insider trading. U.S. Attorney Preet Bharara has convicted about 70 hedge fund managers for obtaining illegal tips. The billionaire Raj Rajaratnam tried, found guilty and put away for nine years. And the third richest hedge fund earner in 2012, billionaire Steven Cohn, is watching as several of his high-level employees succumb to federal indictments. He could be next. It's very hard to indite someone for insider trading. So the odds of ever getting caught are slim given that there are 9,000 hedge funds. "Given the scope of the allegations to date, we are not talking simply about the occasional corrupt individual. We are talking about something verging on a corrupt business model." explained Preet Bharara.
We know for certain that hedge funds colluded with big banks to create mortgage-related securities that were designed to crash and burn, so hedge fund investors could bet against them. In fact, the hedge fund designed the bets by assembling the worst mortgages they could find to place into the securities. Goldman Sachs, JPMorgan Chase and Citigroup have paid over a $1 billion in SEC fines for misleading investors about these shoddy deals. But their hedge fund partners made billions on the insurance and didn't have to pay any penalties.
You can set off rumors, offering the financial medi information that is designed to assist your betting strategies. For instance, give reporters phony info about a particular bank's solvency while you're betting against that bank. If you can help set off a bank run, so much the better, because then you can really win big. However, rumor mongering violates the law...if you're caught. Jim Cramer, over a decade ago he ran a very successful hedge fund. Years later he admitted during an online interview that he fed false rumors to his comrades at CNBC so Cramer's hedge fund could cash in on them.
In high frequency trading you set up your ultra-high-speed computers right next to the stock exchanges so that you get the feed a few nanoseconds before the rest of the world. Then with the help of expert programmers you use that information to automatically jump in ahead of normal investors, so that you buy stocks that others want, jack up the price a little bit and then sell them back to these normal speed buyers. This means that when the rest of us hit the buy button on E-Trade, a high frequency algorithm has probably jumped in there before us, bought the stock we want, and is selling it back to us for a few pennies of profit. They do this millions of times a minute, racking up from $5 to $20 billion a year. It's like a hidden private sales tax that goes into the pockets of high frequency traders. Pension funds and 401ks are fleeced as well.
And the list goes on and on. Some maneuvers are ethically challenged but legal. Other's are borderline. And some are flagrantly in violation of law. But in any event, most Americans would call it cheating. And to add insult to injury, hedge funds have a special tax break called "carried interest" which allows the richest of the rich to pay a lower tax rate than the rest of us.
The whole system of capitalism is designed to scam (steal) from the rest of us. The more bubbles, the greater volatility, the more they are able to steal. It is in their interests to manipulate markets, control access to markets, etc. They destroy value rather than create value. Their criminality won't be challenged or ended.
Taken from here
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