On 3/23/07, Charles Brown <[EMAIL PROTECTED]> wrote:
We have to challenge the legitimacy , the generally accepted notion , that
it is appropriate to compensate hedge funders, for example, on the scale
that they are compensated for their activities.
When you say hedge-funders I assume you mean the wealthy individuals who
invest in these vehicles and not the managers themselves? The managers may
be overpaid but they are milking rich fatcats, so why should we care?
(Unless of course said "fatcats" are pension fund managers gambling with
workers money.)
I found this podcast from the Chicago business school ("Warren Buffett is
wrong, money managers deserve huge paychecks") which is perhaps a good
summary of the "other" view point. It says exactly what you'd expect that
hedge funds make important economic contributions by providing liquidity to
the financial system and making sure that capital is allocated to the most
productive ventures. And the managers compete in a free market, therefore by
definition they deserve whatever they are paid.
http://www.chicagogsb.edu/news/2006-04-11_pricetheory/02-TalentMarket.aspx
-raghu.
