The crisis wasn't the fault of hedge fund managers. It was the fault of insurance companies and bankers who had no clue what they were doing.
hedge funds said, "What are you doing? Don't you realize that will cause a crisis? Your bonds are not AAA--- they're worthless!!" (Michael Burry of Scion capital)
Bankers "Nobody cares what you think, deregulation allows us to do all sorts of loony things to make money, even though we can't tell you what a CDO, really"
Burry " Okay, I will bet on the market collapsing, because I know what's going to happen"
Michael Burry made 6 billion USD predicting the entire crisis, because as he said, he knew Wall Street was crooked and just profited handsomely off that.
Hedge fund managers didn't cause the crisis. They saw it coming and profited hugely off it. And then later they said the banking industry in the US is broken... which it is. Funny how some people are still defending Wall Street. large portions of the bailouts were actually used to award bonuses (for IB firms, bonuses are usually six figure on top of normal salary... which is usually also six figure)
· 8 years ago