Despite The Mortgage Crisis, Hedge Funders Are Still Raking It In

[Hissyspit]

http://www.alternet.org/workplace/60833

Despite the Mortgage Crisis, Hedge Funders Are Still Raking It in

By Sarah Anderson, AlterNet. Posted August 29, 2007.

The little guys may be hurting, but fear not for the titans of capital.

You've probably been staying up nights worrying about how hedge fund managers are going to weather the credit crunch stemming from the subprime mortgage storm. These men are expected to really suffer since they borrow so heavily to finance their gambling in global financial markets. Many were also stuck with piles of mortgage-backed securities when these paper assets plunged in value. A few funds have already stumbled, and Moody's credit raters have warned of a 50-50 chance that one of the big ones will crash soon.

For these troubling times, some reassuring thoughts:

He'll always have the pictures

Kenneth Griffin, head of Citadel Investment Group, chose Versailles as the site of his nuptials a few years ago and last year made a sum that would have made even Marie Antoinette's eyes pop: $1.2 billion. Now that heads are rolling from the mortgage meltdown, the image of the finance world's royals has lost a bit of its luster. And yet, unlike the ill-fated queen and and her Louis XVI, Griffin is expected to survive and maybe even come out ahead. He has already swooped in to take over the assets of one collapsed rival and is busily buying up the stocks of other battered companies. Go, Griffin!

Steven Cohen's SAC Capital fund dropped 6 percent during the first three weeks of August, reportedly one of its worst months ever. On top of that, Cohen now has to worry about a move afoot in Congress to cut off mortgage-interest tax deductions for mansions. Under the flimsy guise of "combatting climate change," Rep. John Dingell, D-MI, is going after owners of homes larger than 3,000 square feet. The size of Cohen's Georgian mansion in Greenwich, Conn.: 31,600 square feet (not including the ice skating rink, tennis court and beauty parlor). At least Cohen was able to enjoy his $1.2 billion windfall from last year while he could. On one spending spree, he picked up an Andy Warhol image of Marilyn Monroe, "Turquoise Marilyn," for an estimated $80 million.

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[tanyev]

1. Oh, thank goodness. I was really worried about them.