Wednesday, April 01, 2009

Where we went wrong?

I have written earlier this week about my doubts as to the value-added by stockbrokers and other financial administrators.
While this data may be a little old, it may support my impressions that too much money is going to too few people, making the system inherently unstable.
In 2005, there were over 9,000 hedge funds, with over $1 trillion in assets. The managers earn 2% of the assets per year, plus 20% of any profit. Given the performance for those years, that's over $4 million per manager per year. The top three incomes reported in New York Magazine were all for hedge fund managers, with Edward Lampert topping the list at $1.02 billion.
It's what farmers used to call eating your seed corn.

1 comment:

dearieme said...

The only ones who make any money from me are the ones I can't avoid - the gate-keepers to tax relief.