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(The New York Times)   How hedge funds lobby to use regulations to bring down companies they bet against. This obviously calls for more regulation   (nytimes.com) divider line 37
    More: Interesting, funds, lobbying  
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877 clicks; posted to Business » on 12 Mar 2014 at 12:11 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



37 Comments   (+0 »)
   
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ZAZ [TotalFark]
2014-03-12 10:19:11 AM  
Hedge funds lobbied the New York Times to put the exposé behind a paywall.
 
2014-03-12 10:24:44 AM  

ZAZ: Hedge funds lobbied the New York Times to put the exposé behind a paywall.


Not providing content is a bold business strategy for a content provider.
 
2014-03-12 10:31:32 AM  
Kindly explain how this is morally different that a dozen New Yorkers standing around watching a perp stab, rape and murder an victim on the street?
 
vpb [TotalFark]
2014-03-12 10:32:59 AM  

snocone: Kindly explain how this is morally different that a dozen New Yorkers standing around watching a perp stab, rape and murder an victim on the street?


You mean that one time 50 years ago?
 
2014-03-12 11:58:55 AM  

vpb: snocone: Kindly explain how this is morally different that a dozen New Yorkers standing around watching a perp stab, rape and murder an victim on the street?

You mean that one time 50 years ago?


That didn't actually happen the way everybody thinks it did
 
2014-03-12 12:23:30 PM  
Uh, is it really so hard to understand that not all regulation is the same?
 
2014-03-12 12:24:16 PM  
A mobster once phoned in a tip to the police that incriminated and ultimately brought down a competitor mobster.  Obviously the problem is we have laws.
 
2014-03-12 12:37:31 PM  

Arkanaut: Uh, is it really so hard to understand that not all regulation is the same?



Apparently yes, for many people. It's useful to turn things into abstractions and move them into the morality domain.
 
2014-03-12 12:41:23 PM  

phaseolus: Arkanaut: Uh, is it really so hard to understand that not all regulation is the same?


Apparently yes, for many people. It's useful to turn things into abstractions and move them into the morality domain.


Some people* can't understand the difference between regulations that protect the environment and/or the consumer and regulations that protect existing businesses from competition.

*usually mouth breathing, straight ticket GOP voters
 
2014-03-12 12:44:10 PM  
Hmm, billionaire hedge fund owner vs. Herbalife?

Whoever wins, we lose
 
2014-03-12 01:14:08 PM  
I'm always amused at people who think that regulation is some kind of magic fairy that will make everything better. Like everything the government does, regulations are created to game the system in favor of big political donors.
 
2014-03-12 01:18:53 PM  

DrPainMD: I'm always amused at people who think that regulation is some kind of magic fairy that will make everything better. Like everything the government does, regulations are created to game the system in favor of big political donors.


I'm always amused at people who think that all regulation is created to game the system.
 
2014-03-12 01:33:20 PM  

SacriliciousBeerSwiller: DrPainMD: I'm always amused at people who think that regulation is some kind of magic fairy that will make everything better. Like everything the government does, regulations are created to game the system in favor of big political donors.

I'm always amused at people who think that all regulation is created to game the system.


Not all of it, but there is a lot of regulatory capture going on.

Hell, just look at yesterday in N.J. -- a bunch of car dealers got together to prompt the state to regulate Tesla motors out of business there.
 
2014-03-12 02:02:28 PM  
And it worked. Herbalife just announced that it is getting investigated by the FCC. Shares were down ~13% when trading resumed.
 
2014-03-12 02:22:04 PM  

DrPainMD: I'm always amused at people who think that regulation is some kind of magic fairy that will make everything better. Like everything the government does, regulations are created to game the system in favor of big political donors.


Of course! If there were no rules, nobody would be violating the rules! It's like that State of Nature thing -- everybody loves nature, right?
 
2014-03-12 03:09:09 PM  
I think Herbalife is a pyramid scheme too, but that doesn't mean this guy should be allowed to use political connections to being down a rival company if it's only for his financial benifit.
 
2014-03-12 03:24:55 PM  
He bet against a company running a pyramid scheme?

Where did I put my outrage? I can't seem to find it.
 
2014-03-12 03:36:57 PM  

dsmith42: And it worked. Herbalife just announced that it is getting investigated by the FCC. Shares were down ~13% when trading resumed.


How is this legal again?
 
2014-03-12 03:38:48 PM  

Wendy's Chili: He bet against a company running a pyramid scheme?

Where did I put my outrage? I can't seem to find it.


The outrage should be that he lost.

I don't know if multi-level marketing schemes should be considered the same as pyramid schemes though, because there is a key difference; in a pyramid scheme the participants are relying on the company / investment vehicle to pay them, whereas in a MLM scheme the company has no such liability, meaning the participants bear the full risk of failure. From what I've heard MLM companies even make the "employees" pay for training and for attending corporate conferences.
 
2014-03-12 03:53:05 PM  

Arkanaut: Wendy's Chili: He bet against a company running a pyramid scheme?

Where did I put my outrage? I can't seem to find it.


The outrage should be that he lost.


Did you see the grudge match between him and Carl Icahn on CNBC? He was calmly explaining why Herbalife was a bad business while Icahn called him names. I knew it would be a while before his short paid off just from the reaction from the traders in the background.

Ackman: "They don't make money from selling supplements, they make money by selling distribu--"

Icahn: "You're nothing but a crybaby Jew-boy!"

Traders: "Woooo! Yeah! Kick his ass, Carl!"
 
2014-03-12 04:15:35 PM  

drunk_bouncnbaloruber: I think Herbalife is a pyramid scheme too, but that doesn't mean this guy should be allowed to use political connections to being down a rival company if it's only for his financial benifit.


So it would be OK to use political connections to being down a rival company if it's not only for his financial benifit?
 
2014-03-12 04:38:28 PM  
this is great in so far as it exposes what hedge funds actually do ( to large companies, and worse.. to nations and currencies).

they place bets, and profit on movement.  the more movement, the more profit.

they usually bet for huge falls...
because they can't easily make a price balloon up.. but they can collapse it.

it's easy to chop down a tree... difficult to invent a way to make it grow faster. it's easy to break a vase.. difficult to create one.

so they make huge bets that the vase will break.. and then they break the vase... and profit (hugely).
bonus.. they don't have to own the vase.  it can be anyone's vase.
 
2014-03-12 04:48:01 PM  

Arkanaut: Wendy's Chili: He bet against a company running a pyramid scheme?

Where did I put my outrage? I can't seem to find it.

The outrage should be that he lost.

I don't know if multi-level marketing schemes should be considered the same as pyramid schemes though, because there is a key difference; in a pyramid scheme the participants are relying on the company / investment vehicle to pay them, whereas in a MLM scheme the company has no such liability, meaning the participants bear the full risk of failure. From what I've heard MLM companies even make the "employees" pay for training and for attending corporate conferences.


Which is because you've never read the outcome of the case against Amway, brought by the detergent companies. As long as everybody is paid based on sales, nobody gets paid for recruiting new distributors, and the distributors are free to set their own prices then it is legal.

As for "paying for their own training" well yeah. Lots of people have to do that. When I got my insurance license it was on my own dime. When I went to conferences they could be thousands of dollars. Had to pay for my continuing ed classes as well, and the various thing like CMS certification.

Had to do the same thing when I got my CDL. That cost me $3,000. College, same thing. Half of the college degrees these days are mostly to acquaint the student with buggy, proprietary software used in the workplace so that companies don't have to train new employees.

That is a bit of misplaced outrage. And the business world loves MLM. Some of the textbooks used at business schools have glowing reviews of the efficiency of the model. Big investors love them. Prepaid Legal Services is another publicly owned one. Avon is another. Pampered Chef was bought by Buffett when Amway's owners refused to sell to him.

There's lots of fly-by-night operations that are scams, that do illegal things or sell products that the suppliers know are fraudulent. The biggest problem with MLMs is the human factor. People get drawn in by "simple" and equate it with "easy". So most people either burn out quickly or end up talking with people trying to run a con game, using a legit MLM in illicit ways for a fast payday against the terms and conditions.
 
2014-03-12 05:10:26 PM  

BolloxReader: Which is because you've never read the outcome of the case against Amway, brought by the detergent companies. As long as everybody is paid based on sales, nobody gets paid for recruiting new distributors, and the distributors are free to set their own prices then it is legal.


We may be talking past each other a bit, but I didn't say it wasn't legal (although maybe it shouldn't be because the practice is predicated on misleading its participants). In fact that was kind of the point of my post -- to point out the differences between MLM and activity that is commonly regarded as a fraud perpetrated against investors. And my goal in highlighting the expenses to the salesperson is to point out how few expenses the company has, or one might say how "safe" it is.
 
2014-03-12 05:37:38 PM  
This explains TF?
 
2014-03-12 06:20:35 PM  

BMFPitt: drunk_bouncnbaloruber: I think Herbalife is a pyramid scheme too, but that doesn't mean this guy should be allowed to use political connections to being down a rival company if it's only for his financial benifit.

So it would be OK to use political connections to being down a rival company if it's not only for his financial benifit?


In my opinion...yes.

If he hadn't already bet against the company, first of all it wouldn't be a rival, but he would be considered an expert raising ligitimate concerns, and maybe be hailed as a whistleblower. Instead, he now comes across as a rich bastard using political connections to have Washington weight thrown at Herbalife for his own benifit; who cares if he's right (and I do believe he is right)? This is one of the (many) stuff that gave birth to OWS.
 
2014-03-12 06:32:04 PM  

drunk_bouncnbaloruber: BMFPitt: drunk_bouncnbaloruber: I think Herbalife is a pyramid scheme too, but that doesn't mean this guy should be allowed to use political connections to being down a rival company if it's only for his financial benifit.

So it would be OK to use political connections to being down a rival company if it's not only for his financial benifit?

In my opinion...yes.

If he hadn't already bet against the company, first of all it wouldn't be a rival, but he would be considered an expert raising ligitimate concerns, and maybe be hailed as a whistleblower. Instead, he now comes across as a rich bastard using political connections to have Washington weight thrown at Herbalife for his own benifit; who cares if he's right (and I do believe he is right)? This is one of the (many) stuff that gave birth to OWS.


In other words...exactly what was said in the boobies of the other thread.
 
2014-03-12 07:07:05 PM  
A system is being abused by certain people, is the solution to:

a) Try to regulate the system to prevent abuse and punish the abusers.
b) Burn down the whole system!
 
2014-03-13 01:53:41 AM  

DrPainMD: I'm always amused at people who think that regulation is some kind of magic fairy that will make everything better.


Let me explain to you very quickly something about YOUR standard of living:

It didn't come about through generosity or honesty but through tragedy, misery, confusion and death. A lot of very tragic things had to happen to a lot of people to get to where we are today. When tragedy struck, regulations were put in place to prevent them from happening again.

Almost every regulation we have today came about because somebody died. Every right, privilege, and comfort you enjoy is the result of someone dying or being exploited. Regulations enforcing tolerance, dignity and respect for all peoples (but especially minority classes) did not become a functional component of modern Democracies until the empowerment of women and state-mandated standards on living, health, work and welfare (ie: 20th century).

Before then, the vast majority of the working populace lived in appalling conditions.

So go on, please explain to me how regulations don't make things better.
 
2014-03-13 06:53:35 AM  

Ishkur: DrPainMD: I'm always amused at people who think that regulation is some kind of magic fairy that will make everything better.

Let me explain to you very quickly something about YOUR standard of living:

It didn't come about through generosity or honesty but through tragedy, misery, confusion and death. A lot of very tragic things had to happen to a lot of people to get to where we are today. When tragedy struck, regulations were put in place to prevent them from happening again.

Almost every regulation we have today came about because somebody died. Every right, privilege, and comfort you enjoy is the result of someone dying or being exploited. Regulations enforcing tolerance, dignity and respect for all peoples (but especially minority classes) did not become a functional component of modern Democracies until the empowerment of women and state-mandated standards on living, health, work and welfare (ie: 20th century).

Before then, the vast majority of the working populace lived in appalling conditions.

So go on, please explain to me how regulations don't make things better.


My standard of living came about because, back in the late 1970s, I realized that software engineering would be a very lucrative field. I also had the balls to start my own software business. Regulations had nothing to do with it.
 
ZAZ [TotalFark]
2014-03-13 08:22:21 AM  
If you think most regulations are driven by deaths, you don't spend enough time reading the Federal Register. Today's issue is a slim 213 pages so at least it's possible for one person to read it before the next comes out.
 
2014-03-13 09:50:04 AM  

DrPainMD: My standard of living came about because, back in the late 1970s, I realized that software engineering would be a very lucrative field. I also had the balls to start my own software business. Regulations had nothing to do with it.


You couldn't start that business without regulations.
 
2014-03-13 09:59:11 AM  

ZAZ: If you think most regulations are driven by deaths, you don't spend enough time reading the Federal Register. Today's issue is a slim 213 pages so at least it's possible for one person to read it before the next comes out.


Every law we have is an attempt to prevent somebody from doing something that might hurt other people. That's what laws are for.

In time, people find loopholes, exceptions, and workarounds to the laws. This can't be helped -- it doesn't matter how elegant you make the rules, someone will always find a way to game the system or play in a way that the rules were not designed for or do not specify. This gives them an incredible advantage while circumventing prosecution, and sometimes they hurt others. So additional laws are created closing these loopholes, adding sections, articles, corollaries, standards and regulations to the bloated law books on a per need basis.

The laws we have are supposed to get longer, bigger and larger as time goes on. That's usually a good thing -- it means we are refining the process of lawmaking and it is getting harder for people to find ways around them.

So always be weary of anyone who seeks to simplify the regulations or the laws. Whoever does so isn't interested in fairness, freedom or opportunity, what they really want is to put themselves in the tactical position of hurting others without consequence.
 
2014-03-13 11:16:57 AM  

DrPainMD: My standard of living came about because, back in the late 1970s, I realized that software engineering would be a very lucrative field. I also had the balls to start my own software business. Regulations had nothing to do with it.


Wow, that's some weapons-grade ignorance right there.
 
2014-03-13 06:42:11 PM  

Ishkur: DrPainMD: My standard of living came about because, back in the late 1970s, I realized that software engineering would be a very lucrative field. I also had the balls to start my own software business. Regulations had nothing to do with it.

You couldn't start that business without regulations.


Sure I could. I did. If there were any regulations, I didn't know about them or comply with them; I just solicited customers and wrote software.
 
2014-03-13 06:43:01 PM  

imashark: DrPainMD: My standard of living came about because, back in the late 1970s, I realized that software engineering would be a very lucrative field. I also had the balls to start my own software business. Regulations had nothing to do with it.

Wow, that's some weapons-grade ignorance right there.


I'm pretty sure I know more about what created my success than you do.
 
2014-03-13 09:01:26 PM  

DrPainMD: Sure I could. I did.


No. You didn't.

DrPainMD: If there were any regulations, I didn't know about them or comply with them; I just solicited customers and wrote software.


Uh huh. And where did the standards for the syntax and semantics of the computer protocols, languages, hardware and software that you based your business on come from? You didn't come up with Assembler yourself. Someone standardized it for you, they codefied it, they developed hardware that could understand it, software that could compile it, computers that could run it, and it all works. You didn't build any of that. A regulatory body of technical laws and rulesets laid down the framework by which you and every other tech company must adhere to in order to succeed. That is the very essence of regulation: To establish an industry of compliance.

Nothing you do exists in a vacuum. Everything that you enjoy, that helps you succeed, is because you are standing on the shoulders of giants.
 
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