As the recession begins to bite deeper with every passing
day, millions of ordinary people face losing their homes, bankers’ profits are
taking a hit, tens of thousands are facing the dole queues, the world is on the
brink of economic recession, yet the super rich have never had it so good,
especially the hedge fund managers.
| hedge fund managers pocketed more than ever |
Last year, the top hedge fund managers pocketed more money
than ever before. Top of the bunch was John Paulson. His “earnings” last year
came to $3.7bn (£1.87bn). Steaming up behind him were George Soros and James
Simons. They made $2.9bn and $2.8bn a piece. Apparently, the least well-off
punter amongst the 50 top hedge fund managers made a measly $210m.
The list of these recession-proof high-flyers was compiled
by Alpha magazine. This was culled from firm’s balance-sheets. The figures even
shocked Alpha’s editors. This year’s table, they explained, "may well
prove to be the greatest display of individual wealth creation in any year in
the modern history of finance".
The reason for their success when all others are losing
their heads, is simply gambling. Who said capitalism was like a gambling
casino? All they needed to do was punt money on the favourite dog, sorry,
market trend, and wait for it to come in. It is just like being at the Romford
dog track on a Saturday night. You simply bet against some of the trends in the
financial markets and win. It is as easy as that. Paulson exploited the turmoil
in the sub-prime mortgage market, making a killing while several banks have
been devastated. How easy is it to make money these days! You don’t need to
work or toil, only gamble against the odds.
You don’t need to teach old dogs new tricks either. George Soros,
who famously made $1bn in a day when he forced the Bank of England out of the
European exchange rate mechanism in 1992, came out of retirement to return to betting.
He had spotted a “cert” in the turmoil in the markets. As a result, he collected
returns of more than 30%!
Eight of the top 50 earners are British-based, including
Noam Gottesman and Pierre Lagrange of GLG who made $350m each, and Hugh Sloane
and George Robinson of Sloane Robinson Investment Services who made $220m each.
The highest-placed British trader was David Slager of Atticus Capital. He made
$450m last year, placing him 13th on the list.
The existence of such fabulous gains as the rest of the
financial world sinks is bringing out the chaos and anarchy of the capitalist
system. Of course, it has produced some bleats from other capitalists. For
instance, the US Treasury secretary, Henry Paulson, talked of the need for
hedge funds to be more ‘transparent’, whatever that means.
Between them, the top 50 managers in Alpha’s list made $29bn
last year. Not bad for a day at the races! When Alpha began compiling the table
in 2002, Soros was on top with $700m – if he earned that amount today, he would
only be placed ninth.
Inequality of wealth is more extreme in the citadel of
world capitalism, America, today than for decades. According to Jared
Bernstein, of the Economic Policy Institute in Washington, the gulf is greater
than at any time since 1928, when a similar proportion of US national income –
23% – went to the top 1% of earners. That was a year before the 1929 Crash, the
greatest crisis in the history of capitalism – well, so far.
