Washington Yesterday

The House Committee on Oversight and Government Reform trotted in some very fine hedge fund managers yesterday to ask showy questions about some very populist topics. They apparently are demanding the following small things from the hedge funds, or at least asking why they hadn't thought of doing some of this before things melted down:

• higher taxes
• more disclosure
• more regulation

Since things like the tax code don't change based on what happens in one meeting, the hedge funds boys kind of smiled and nodded and made nice and it was a pretty uneventful meeting.

The Wall Street Journal printed the following sentence today, which I find very ironic:

"[T]hey (the hedge fund managers) maintained that such funds, which cater to the wealthy and big investors such as pension funds, can play an important role in a recovery, lending money where banks won't and buying up toxic assets like mortgages that others won't touch."

These particular funds don't cater to anyone. They are the vehicle in which the boys who were under the gun yesterday can maximize their profits. I suspect that the important role that they will play will be making a killing buying up CDOs at some point, sooner rather than later.

I still like capitalism, though.

I am getting tired of the volatility.