HedgeFunder Says F**k You

Saw mention of this letter in the Los Angeles Time last weekend. Hedgefunder Andrew Lahde, who delivered a 866% return last year betting against the mortgage markets, bid goodbye to clients and colleagues with the below farewell letter. Note the last paragraph which addresses alternative food sources and energy:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.
So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don't worry about my employees, they were always employed by Mr. Springer's company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life -- where I had to compete for spaces in universities and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man's interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft's near monopoly. I believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won't see it included in BP's, "Feel good. We are working on sustainable solutions," television commercials, nor is it mentioned in ADM's similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let's stop the rhetoric and start thinking about how we can truly become self-sufficient.
With that I say good-bye and good luck.

All the best, - Andrew Lahde

Pickens & Palin

That One- I managed to catch portions of Senator Obama’s stump speech yesterday at the Indiana State Fairgrounds in Indianapolis. I was once again pleasantly surprised to hear Obama stress the correlation between renewables and job creation. Regarding investment in clean energy sources Obama said “I will invest $15 billion a year in renewable sources of energy to create 5 million new green jobs over the next decade -- jobs that pay well and can't be outsourced . . . jobs that will help us end our dependence on oil from Middle East dictators." His campaign in the current economic crisis sees the reality in energy technology and how this will guide all of our futures.

Picken Palin- Didn’t know if anyone caught the fact that “energy expert” Sarah Palin and Boone Pickens had a sit down in Dallas last week. The very disturbing thing is now Pickens is endorsing Palin as a real deal energy expert. According to Picken’s blog posting last Friday:
Met with Sarah Palin the day after her debate with Joe Biden. She came to our Dallas offices with her husband, Todd, to talk about energy and the Pickens Plan ...
Governor Palin comes from an energy state, and I'll tell you, she gets this energy situation. We talked about it like two oil and gas professionals.
When we sat down in our conference room, we talked about the debate and then, because I knew she was short on time, we got right into the business at hand -- energy, and the danger of continuing to import 70% of our oil requirements.

We spent some time talking about ANWR -- the Arctic National Wildlife Refuge. We didn't agree on how much oil is up there, but I told her I was all for drilling. You know what I say about this: I'm for anything American.

Her husband Todd sat in on the meeting. You know that he's a steelworker in the oil fields during the Alaskan summers, so he understands a good bit of this, too. He was interested in the concept of filling your vehicle in your garage overnight using the same gas line that goes to your kitchen range and hot water heater.

Governor Palin wanted to understand the idea that the federal government should lead the way in moving to vehicles fueled by natural gas. We also talked about how to make the biggest impact quickly: Moving over-the-road trucks away from diesel and onto natural gas. I told her that if we had one million trucks running on natural gas, we could cut our imports of foreign diesel by 40%.

These candidates travel with a big entourage of advance people, staff, press, and Secret Service, and after nearly an hour one of them came into the conference room to tell her they needed to get going. But Gov. Palin took the time to take a group photo with Todd and me sitting in front of my staff, which was very thoughtful of her.

I don't know who is going to win this election, but I do know whichever team wins they'll know about the Pickens Plan.

 Boone

I was totally suspicious of this guy’s motives, but now with him elevating Palin and basically degrading his knowledge of dirty fossil fuels to Palin’s level, seemingly Pickens is just another horny, doddering old man.


Hybrid Taxis Bad?- Auto manufacturers are running like mad away from certifying their hybrid models as safe for commercial taxi usage. Concerns like, when buckled in passengers may sustain major injury due to the divider between front and back cabin and whether these dividers impede the side air bags from deploying properly. The NYC TLC( Taxi & Limousine Commission) continues to list models without manufacturer certification like the Prius, Camry and Highlander. Somewhat disturbing news for us eco-friendly New Yorkers.

Redirect the Bailout to the Green Economy

“In my experience, never before in the history of capitalism has so much money been asked from so many people, to help so few that screwed up so badly”. – Robert Reich

ET- Thomas Friedman’s column in today’s NY Times ponders what results would be reaped if a similar $1 trillion bailout was directed toward the new clean economy versus the old school broken financial segment. In redirecting this money to the green economy, we could expect it to return benefits and jobs to this economy in extraordinary numbers. Definitely a must read.

Sanyo Salem- As proof of the above Sanyo announced it has chosen Salem, Oregon to construct a solar plant. The $80 million plant will employ 200 and be online by 2010. The State of Oregon’s Business Energy Tax Program will provide credits and subsidies for 50% of the plants costs.

Green Jobs Now! A Day To Build The New Economy

With a reeling economy, soaring gas prices and rising fears of a global climate crisis, more than 100,000 people rallied at events across the country to urge leaders to jump start the clean energy economy. The events, "Green Jobs Now: A Day to Build the New Economy," urged policy makers to think beyond the short-sighted distraction of drilling and, instead, create real energy solutions that build a new green economy strong enough to create millions of green jobs and lift people out of poverty.
"We can't drill and burn our way out of this economic crisis. We can -- and must -- invest and invent our way out," said Van Jones, founder and president of Green For All. "600,000 jobs have been lost this year alone. We need to free ourselves from our dependence on foreign oil, and instead invest in jobs in sustainable industries -- wind and solar, among others. Only then will we be able to fight poverty and pollution at the same time."
With over 650 events and well over 100,000 participants in all 50 states, the events represented one of the largest and most diverse days of citizen action focused on economic issues and global warming in American history.
"With over 650 communities, spanning every state in this country, rising up to say they are ready for bold solutions to the economic, energy and climate crises, it's time for our leaders to step up to the plate and tackle these challenges head on," said Gillian Caldwell campaign director of 1Sky.
"America is ready for the green jobs that a commitment to 100% clean electricity within 10 years will bring -- jobs that can't be outsourced, jobs that reassert America's commitment to opportunity, innovation, and environmental protection for all," said Alliance for Climate Protection CEO Cathy Zoi. "This is what it means to Repower America."
Rally participants from across the country were urged to sign the Green Jobs Now (www.greenjobsnow.org) petition to send the message to political leaders. The petition states:
I'm ready for green jobs now. I urge our elected officials to invest in creating millions of green jobs and a Clean Energy Corps. We can't drill and burn our way out of the current crisis. We can invest and invent our way out. We can create new pathways out of poverty and curb global warming at the same time. We will do this by retooling our factories, rebuilding our communities, and repowering America with 100% clean and renewable electricity. It's time to build an inclusive green economy strong enough to lift people out of poverty.
Source: PR Newswire

Peril & Hope

Wall Street Scam- The financial sector bailout soap opera kicked into high gear yesterday. Some highlights: McShame taking his ball and going home after suspending his campaign…House Republicans doing in their own President’s plan…Comrade Bernanke stating we can not pay “fire sale prices” for Wall Street’s toxic junk being purchased by taxpayers, meanwhile Warren Buffet gets Grade A shares of Goldman Sachs and a 10% dividend on his investments.

Green Economy & Jobs- The United Nations Environment Programme in association with The Worldwatch Institute and Cornell University Global Labour Institute issued a report on “green” jobs in a new clean energy world. I will render my comments once I have had the time to read thoroughly, but you can read for yourself here:

The report “Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World” produced in the framework of the UNEP/ILO/IOE/ITUC Green Jobs Initiative assembles evidence - quantitative and conceptual - on existing green jobs.

The report Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World is the first comprehensive and authoritative report which provides an overview of the complexity and policy relevance of global environmental challenges —climate change— and employment.

It gathers data on employment on different sectors —renewable energy, energy efficiency in buildings, sustainable transportation, and organic agriculture— and draws conclusions and recommendations for policy makers, business and industry, workers and trade unions in the context of the transition towards a low-carbon economy, which may yield a real potential, and yet is faced with formidable challenges

The pace of green job creation is likely to accelerate in the years ahead. A global transition to a low-carbon and sustainable economy can create large numbers of green jobs across many sectors of the economy, and indeed can become an engine of development. Current green job creation is taking place in both the rich countries and in some of the major developing economies.

The report emphasizes the need for increased investment to create green jobs, facilitate the just transition from traditional to low-carbon economy, and further analyses the major shifts in employments and skills patterns

The Report makes an important contribution to the wider economic, social and environmental research communities and NGOs and others, including local authorities interested in these issues.

Green Gym- A new gym in Portland, Oregon has some of it's cardio equipment, which includes remanufactured machines hooked up to a generator so you create your own energy in powering a LCD TV, laptop and the gym's stereo. Entreprenuer Adam Boesel opened the Green Microgym last month. Additionally, the club will be installing wall-mounted solar panels and claims its best feature is being a neighborhood gym where none of its customers drive.
Source: NY Times

Rocking the Casbah with Komissar Paulson

Words Of The Week- Treasury Commissar Hank Paulson unleashed the term of the week “illiquid assets”. Illiquid is defined by Merriam-Webster as 1 : not being cash or readily convertible to cash 2 ; deficient in liquid assets. Another interesting term attributed to the bailout program is “clawback-provision” which ascertains that the Commissar would have the powers to force companies to recoup previous payments to executives of the companies involved in the government bailout. It is definitely proving to be a Safire week as we try to comprehend the “official speak” and word choices of this latest bailout. Commissar Paulson insisting on a “clean” bill being passed by Congress; “clean” in this context pretty much meaning no strings attached. What is beginning to happen to this 3-page bailout bill, is full on lobbying by the finance industry. Initially, it was to bailout only bad mortgage debts, but somewhere during the weekend “all financial instruments” were added. Additionally, this program was to only rescue US firms since it is funded by taxpayer dollars, but now any financial firm can be added. So American taxpayers could very well be bailing out foreign-owned firms. I ask all of you to pay close attention as Commissar Paulson continues to consolidate the means of production into the government’s hands while trying to jam through this 3-page document with no provisos for oversight of how he intends to spend nearly a trillion dollars of taxpayer’s monies.

Republicans Abandon Free Market In Droves: Principles Disappear Quicker Than Investment Banks

“I fear the government has passed the point of no return, we have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams.”- Ron Chernow, financial historian-New York Times 9/18/08

Bailout Bonanza Detroit- Seems like Mssr. Wagoner, Mulally and Nardelli have been charming the pants of members of Congress the past two days. Lawmakers seem to be swayed into agreeing to $25 billion in subsidies for automakers. Nancy Pelosi gushed: “We see this as a way to strengthen the technological base of America,” “We consider this a major investment in innovation”. Allen Mulally, the chief executive of Ford, had this to say: “It was a great day.” When asked about the perception of the bailout Mulally replied gleefully, “I would characterize it as an enabler.” Wow, he got that right. He is the enablee of the enabler. Presidential election years continue to prove just too grand.
Source: New York Times

344:1- This is the current ration of CEO pay to worker pay. Nick Kristoff’s column in today’s NY Times perfectly lays out the reason any new government regulation after this weeks mess, needs to begin with CEO compensation. This is a must read column for all us worker bees.

Respect- Phillip E. Clapp 1954-2008

Freddie, Fannie & Mary Kate

Freddie & Fannie Again- Today we learn that chief executive Richard Syron of Freddie Mac was ignoring warnings from his internal risk management officer of the pending mortgage crisis. Syron was warned as far back as 2004 to start cutting risk and ignored these pleas. On top of this he was compensated with $38 million over the past 5 years. His peer at Fannie Mae, Daniel Mudd who shockingly is a Ph.D. wielding economist claims that they are victims of circumstance. Meanwhile, Mudd collected $42 million in pay. Additionally, these two quasi public organizations are so damaged that it’s impossible to find candidates interested in replacing these two knuckleheads. So they will continue to be well compensated, with I assume taxpayer monies, for their ignorance in driving Freddie & Fannie to the verge of collapse. If this doesn't cause people to take to the streets, I really don't know what would. I suppose since 80% of the people should not have qualified to own homes and benefited under this scam, that there is little reason for these people to protest.

GOP Redeployment- Voter registration rolls in 26 States so far this year show an increase in Democratic registrations by a net total of nearly 215,000 and a decline in Republican registrants to the tune of 1,400,000. Wow, this is only half the States and the Dems have a 1.2 net advantage. Increasing registrations to Independent have made this basically a third party in many states with each splitting the registrants 1/3, 1/3, 1/3. I can only hope that some of these gains go to the Green Party.

More EcObama- I wanted to add to yesterday’s post that conservation and efficiency alone could help this country toward energy independence. Both these tools we already have available to us, and applied with any cohesion would provide enormous savings. Check out Bob Herbert’s NYT column today.


What’s with this Mary-Kate Olsen refusing to speak to federal investigators and demanding immunity before she does? Seems to me if one of my “good friends” died of some kind of overdose with some of the drugs being prescribed illegally that I would cooperate with zero conditions. This definitely makes one further wonder of what Olsen’s afraid of in sitting with investigators. Doesn’t seem like natural behavior to me.

Greenspan & Girls Gone Child

Greenspan Speaks – Wow, Alan Greenspan speaking of Fannie Mae & Freddie Mac labeled both as “unstable”. The former Fed Chief actually admitted that having Fannie & Freddie structured as private/public entities, whereas “profit is privatized and loss is socialized” as a poor idea. Looks as though these two organizations could be heading toward being obsolete or at the very least reorganized. When someone of Greenspan’s supposed stature admits this, we can count on something thankfully changing.

Girls Gone Child- I was reading Maureen Dowd’s column in today’s NYT and she was mentioning how Obamania was still meeting with disgruntled Hillraisers. The senator has got to stop wasting his time in these meetings. Hillaryites are damn near insane. So either, just put Hillary on the ticket or get beyond it and start ignoring these lunatics. I dare these nuts, once in the voting booth, to cast a vote for McShame.

McShame Music- As a follow up to my earlier post regarding the McShame campaigns inability to license any pop music, along comes the talented John Rich. It seems John, who is just coming off his anti-gay marriage and somewhat homophobic remarks last year, has penned a song for McShame titled “Raising McCain”. John is so talented, but it seems as though he needs some life lessons from his less offensive and lovely partner, Big Kenny.

It’s Local Stupid- With the continuing increase in the cost of energy, the notion of the global economy may be hitting a roadblock in growth. This notion of products traveling thousands of miles just for our convenience is becoming both antiquated and too costly. If I need to go without Kiwi in the winter due to my residing in the Northeast, so be it. We all need to adjust our consumption in purchasing and eating more locally produced goods.

Yankees Slide- The Yankees finally won a game yesterday against the Anaheim Los Angeles Orange County Disneyland California Angels after faltering the past week. Mike “Moose” Mussina threw a near perfect game. I can’t believe that I now look forward to Mike starting again. He is hot as lava. I never realized he has a degree in economics from Stanford too. Too my relief (pun intended) I will never have to look at Kyle Farnsworth is pinstripes again. I am so relieved he was traded away as he was a bullpen waste of space.