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Tuesday, June 09, 2009

David P Goldman: The Mother of All Incumbent Advantages

Independent hedge fund managers, e.g. Raptor last week, are following me out of the business. In a market in which the government tells everyone what things are worth, the fine judgement of bond analysts is worthless. I used to manage a department with dozens of high-paid credit analysts trying to figure out the price of seniority or subordination down to the last basis point. After Chrysler and GM, the issue is moot. But there is money to be made, and it will be made by money managers tied to the federal government, through TALF and similar subsidies. As a matter of fact, the only sort of money that anyone will make in the US economy will come from things that the government subsidizes, or approves, or funds, or otherwise sponsors.


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