Saturday, November 07, 2009

Hell to pay

Now that it looks like Steven Cohen's SAC Capital may get dragged bodily into the insider trading scandals, things could get interesting. If you think there's been an uproar over bonuses at AIG and Goldman Sachs, wait till the mainstream press starts chewing over Cohen's compensation ($1 bln in 2005) and lifestyle (35,000 square foot house in Greenwich, bought for $15 million but with jah knows how many improvements put into it). Jim Paulson may have made more in 2007-8 betting against housing, but at least it's pretty well understood how he did it. Cohen's modus operandi has always seemed dubious: being the closest to information, getting the first phone call from the broker.

Once its understood how much money hedge fund people made relative to investment bank people, main street people will be hopping mad. And it will be hard for Glen Beck to keep thumping Atlas Shrugged as if it were the Bible.

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