Hedge Fund Manager Dan Loeb: “The Whole System Is Rigged”

September 1, 2010 by · Leave a Comment
Filed under: Opinion 

Dan Loeb makes a good point that I hope more people are already feeling or starting to realize.  He is correct that we are heading into a period of more government control and regulation because of the past excesses.  We had rules on the books to deal with these problems but we did not choose to enforce them.  If we did we would find that crimes were committed and people that are getting a slap on the risk should be going to jail and pay major fines.

We should hope that he is correct that we come back to basis of free market capitalism to allocate capital and decide winners and losers.  Lets quit interfering and picking winners and not letting the market do what it does best, even if a major corporation or two has to go bust in the process.

Yahoo Finance – The message, from the number of chunks of quotes Dealbook pulls out of Loeb’s letter is: I don’t trust the government to do what’s best for the economy, so I’m pulling out of companies that could be impacted by public policy.

Third Point’s most recent investment strategy reflects Loeb’s belief that banks, healthcare, and for-profit education companies are “overly exposed to unpredictable government regulation.”

In the startling conclusion, Loeb says:

“It is easy to see why so many people have concluded that the entire system is rigged.”

Here are the quote chunks we pulled from Dealbook’s analysis of the letter. Key points are bolded:

“As every student of American history knows, this country’s core founding principles included nonpunitive taxation, constitutionally guaranteed protections against persecution of the minority and an inexorable right of self-determination.”


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