Wednesday, October 15, 2008


Civilization, in fact, grows more and more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.

— H.L. Mencken, In Defense of Women

It amuses me to think that the financial markets have taken on some of the aspects of late-stage democracy, as Mencken described it 90 years ago. Supposedly seasoned, sophisticated hedge fund investors are clambering all over each other like rats scurrying out of the bilges of a sinking ship.

It must be reassuring to their limited partners to discover that so many of them have been running portfolios so little correlated with US equity market performance:

“We continue to see a vortex of selling, led by a levered, scared hedge fund community stepping on each other trying to get in front of the other guy to liquidate, based upon the real investment losses that they’ve experienced, coupled with the threat of year-end redemptions,” says Doug Kass, president of Seabreeze Partners.

I guess a lot of these Big Swinging Dicks really are just little girls, after all.

© 2008 The Epicurean Dealmaker. All rights reserved.