One of the more odious parts of an unregulated financial system are what are called Hedge Funds. These funds solicit large investments from very wealthy people and from large institutions like pension funds and create complex investments that generally return only a small return to the investors but a large return to the sponsors. They serve no real economic purpose except to enrich a tiny number of people, most of whom then use that money to lead a lavish life style and promote Conservative causes.
creating a small cadre of very wealthy people, and it is starting to import
the excessives of the very wealthy. It
has just announced that it will allow foreign Hedge
Funds to operate in the country. China
The reform, called the Qualified Domestic Limited Partner programme, invites hedge funds to apply for licenses to register in
two people said. One person said that only the world’s biggest hedge funds,
with at least $10bn assets under management, would be allowed to participate at
Laurie Pinto, chief executive of North Square Blue Oak, a London-based investment bank that focuses on China, said that hedge funds were already queueing up to apply for licenses, even though the programme had not been formally announced.
“There’s an amazing distribution potential in
and an amazing need for this product,” he said. “Everyone wants to be in this,
but it’s complicated and it’s China .” China
Of course “everyone” does not include the vast majority of the population of
where the average income is still only a few thousand dollars a year. And yes China will now have to learn how
greedy fund managers rake in huge profits while leaving most (but not all)
investors with meager returns over the long term. (Yes, we are talking about you John Paulson).