Recent Hedge Funds Rally…Don't Get Fooled Again!!!

As I listened to the talking heads on Squawk Box this morning drooling all over themselves as they stated that almost all of the major hedge funds were at or above pre-recession levels, I had a flash back to my teenaged years. My friend and I, sitting on his living room couch listening to his father give us the don’t drink or smoke speech as he spilled Budweiser on his chest and sprinkled cigarette ashes into the air with every wave of his arm. The hypocrisy of both events was palatable to me.

The hedge funds are higher not because they are such great investment packages. They have increased in value because the same bankers who a few years ago were knowingly selling us the weak interest only mortgage loans and worthless sub prime mortgaged based securities with the bogus AAA ratings are taking what little public investment capital is out there and slowly purchasing these funds. They want to gain mass appeal and lure us into re-investing in these long term hedge finds with the warm and fuzzy news that all is well and the recession seems to be on the mend. They want us to re-invest so they can collect their brokerage fees.

With the unemployment rate still at historically high levels, job seekers to available jobs still “posted” at over a 6 seekers to 1 job ratio, companies slashing permanent jobs and hiring temp workers, American families on average earning hundreds of dollars less per month than they need just to pay bills, the economy is far from on the mend. I have a little news for the fund managers…there is nothing left, you took it all the first time.

At least my buddy's gin soaked old man was an unselfish hypocrite. Looking back, he just wanted his kid to avoid the demons that had consumed him.