Saturday, March 31, 2012

Jobs Act Removes Limits To Hedge Fund Marketing Put In Place In 1933

Republicans have just introduced another bill gutting a regulation set up in 1933 .  This now means private investment firms, aka hedge funds, will now be allowed to market their products to the mainstream investor. 

This development is consistent with two long term theses we have held on here.  One, that the hedge fund industry will go the way of the Dodo Bird as this cycle ends and two, the investor class will be obliterated.  What better way to help create that dynamic than by allowing investors to place their assets in schemes that rely on methods unproven beyond the rise of Frankenstein finance.  Ahem.  There is a reason the hedge fund bubble is a recent phenomenon.  And why similar previous schemes ended unfavorably.  We have crucified Wall Street’s voodoo incarnations endlessly on here. 

A fool and his money soon part ways.   Investors and society as a whole oftentimes need to be protected from their own ignorance.  Private betting schemes will now be marketed to the investor class unencumbered by protections.  (Marketing in today’s world is fancy word for outrageous claims and propaganda in most industries.)

UPDATE:  Hedge Funds Review pulled the link to the story.  Updated is a working link.

Title link here.

posted by TimingLogic at 4:50 PM

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