I was reading the following on CBC.
Although four banks holding 70 per cent of the debt had agreed to erase it for $2 billion, the hedge funds were holding out for a better deal.
After allowing talks to continue late into the night Wednesday, the U.S. Treasury finally ended negotiations after the hedge funds were unable to come to an agreement, the person said, asking not to be identified because the talks were private.
Folks, I work for a hedge fund, and I am part of this industry. But the fact that these hedge funds are holding out for a better deal is plain ol’ludicrous. The CAW, UAW, other lenders, government, and Fiat all gave. Yet here are a bunch of hedge funds saying, “hey lets put this in bankruptcy court and see how we fare…”
If there ever will be a pitchfork moment by the people against hedge funds this will be it.
Obama has said that this might go to bankruptcy and it might go fast, but I wonder. It all depends if the judge overrides the smaller hedge funds. And here is where I wonder. If the smaller hedge funds feel that confident could it not imply that the judge might make the bankruptcy a longer winded process? Will it really be that fast? It might be, and if so then these hedge funds will look really stupid. But if this stunt results in job losses and uncertainty then you can all be assured that hedge funds as they are today will get wiped out by the G20.
Though does this mean the death blow to hedge funds? No, but the smart ones will move completely offshore. And by offshore I mean completely offshore, and not the hogwash where the company is offshore, but the people are onshore. The people will have to move offshore!
The only country that I think will be against this is the UK since they have many hedge funds. The US will not care that much since there is regulation already, and the big funds will not disagree. The cynic in me might even say that they want this too happen since it will kill off competition.
Do I care? Not really because we are already offshore. The entire team is offshore! In fact we welcome this new legislation…