Tuesday, May 5, 2009

One Brave Hedge Fund Manager Speaks Out Against Obama Bullying

According to the New York Times:
Clifford S. Asness is not afraid to defend himself against attacks from the Obama administration. The outspoken managing partner of AQR Capital Management, a $20 billion hedge fund in Greenwich, Conn., has written a scathing letter striking back at President Obama for his harsh words blaming hedge funds for Chrysler’s bankruptcy.

Here is an excerpt from the letter:
The President has just harshly castigated hedge fund managers for being unwilling to take his administration’s bid for their Chrysler bonds. He called them “speculators” who were “refusing to sacrifice like everyone else” and who wanted “to hold out for the prospect of an unjustified taxpayer-funded bailout.”

The responses of hedge fund managers have been, appropriately, outrage, but generally have been anonymous for fear of going on the record against a powerful President (an exception, though still in the form of a “group letter,” was the superb note from “The Committee of Chrysler Non-TARP Lenders,” some of the points of which I echo here, and a relatively few firms, like Oppenheimer, that have publicly defended themselves). Furthermore, one by one the managers and banks are said to be caving to the President’s wishes out of justifiable fear.

However, Clifford S. Asness is fearless:
The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to “sacrifice” some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power. Read the full letter here.

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