Hedge Hogs

Leveraged Commentary

By Cranford Chase

Embarkation - Discard to Regard

Through no known fault of my own, I was uprooted from a comfortable, perhaps complacent, office job in a Moonachie manufacturing company. I was tossed into the heartless job market at a pay rate that was going to be a stretch to replace in any environment that would be remotely bearable. I had some shots, some offers, some disappointment. 

From Quick Dis-Card to High Ree-Gard

I learned the value of cluelessness in the face of the relentless grind of life and daunting adversity. Ignore it, laugh it off, and consider yourself emotionally beyond it because frankly you are. Read voraciously and escapedly and ignore the incoming bills until the new paychecks arrive. Humiliate yourself with a trip to the unemployment office, which wasn’t so bad at all (you can do everything by phone!). The whole process was about a month-and-a-half, two months of ongoing hoots – a blast from an onrushing future. From the somber “Cranny we don’t need you no more,” of my old employers, to the hearty, “Cranny we love you welcome aboard!” of the new. From quick discard to high regard, as that annoying, adulterous reverend from Chicago would rhyme. Chant it with me brother now: “FROM QUICK DIS-CARD – TO HIGH REE-GARD!  FROM QUICK DIS-CARD TO HIGH REE-GARD!” Oh man can you feel the chills, if not, well, you ain’t been through what this brother has been through, the valley, the dells, ravines, the gutters…it’s inspiring, all of it. FROM QUICK DIS-CARD TO HIGH REE-GARD

Fate (and some fault of my own) has now landed me in a company which interacts with stock analysts and hedge funds here in the Financial Capital of the World. It’s a replay, a stroll down forgotten-memories lane as I have strode these blocks before, during my many years at Bank of New York. From my present 29th floor windows behind my desk, which face south, there’s a pleasing view of Ellis Island out in the harbor. But I can also look quite nearby and gaze down on the building where I toiled for many years as a mail clerk. The building, once occupied by the Dorothy Schiff-run New York Post before the Bank of NY moved in, is now – condos. Ms. Liberty, out there somewhere, is unfortunately obscured by an ever-rising concrete structure – more condos – at the south end of what I know as Battery Park City. That site could be called something else to suit the micro-neighborhood, but the west side of Lower Manhattan, it’s all Battery Park City to me. I remember quite distinctly when the very first residential buildings (more concrete) went up – Gateway Plaza – in, I gotta say, the very early ‘80s.

This south view from my workspace duplicates the south view from my boss’s office, while his west view, an expansive one, looks directly out over and across the World Trade Center site, commonly called Ground Zero but not referred to as such here. If and when something gets built at this site, and if I’m still here, me and my boss will have orchestra seats for the performance. The first if is more likely than the second, but they’re both hedgible.  Which means, don’t bet on or against either.

Hedge Funds

Hedge funds are presently the hottest “vehicle” into which supposedly only “rich” people can put their spare, say lose-able, cash. Hedge fund managers – especially “good” ones – are the first-cousins of the 80’s M&A investment banker invasion armies, and are getting as rich as the world-bestriding computer-industry tech icons. The hedge manager template is young, energetic, rich, smart, broad-laden, well-shod, hot-shotty, swaggering, and probably arrogant or self-important. After all, even richer and smarter and more important people are giving these managers lots and lots of money with very few strings attached. The hedge manager can pretty much put it where he wants, including his pocket without too much muss or fuss. 

Temple Secrets

I’m not sure just yet, but the deal is the manger gets a certain cut of the pie no matter what returns are generated, even if any. So the hedge manager isn’t judged too closely on performance because supposedly there’s a lot of risk of losing the money anyway. It’s play money for the rich investors, at least I think for now. But because the hedge funds are “hot” now, huge sums are seeking these heady shores. Everyone wants to say, “I’m in so-and-so fund” because to do so implies, 1) ya got the money to lose, and 2) you’re sort of the boss of the super-joe-cool hedge fund manager. It’s like, he works for YOU. And if the image of the hedge fund manger is joe cool, well, what does that make the image of his BOSS? Boss Joe Cool! And there’s arcane jargonia-speak I’ve overheard already: “alphas,” “betas”, “bogeys” “collars” “convertible arbitrage”; the kind of temple secrets which made the beneficent Christ himself mad enough to bust up and rampage. It makes people feel smart and when they can talk like that - they feel included. And if some dame overhears them and wants to join this smart conversation with these snappy tycoons, well, come on in girly girl! So in addition to the money, there’s that extraneous “me-da-man,” “in” thing going on. And that’s just as powerful an incentive, I think, as the money. To be affiliated even remotely with a big hedge fund - as an investor, the manager, or some trader - to drop that little phrase convincingly into the foxy money-tuned ear of some gullible broad in a bar, you’re lunging at some cache that might springboard you onto her springy-king-kinko mattress right away. That doesn’t count for a lot?

Having just entered this world, I cannot judge yet whether this blanket, and envious, appraisal is true. While you may not trust my judgment, I do. And I think I’m right because I think I represent what I would do if I were in those high-flying expensive shoes. Others, probably broads, would disdain this conclusion, but only because they know how many times they’ve been snowballed by a bogus hedge fund rap. Or even a real one that rode them on the short ride up, and tossed them for the ride down.

So isn’t it good I’m learning about this world? I don’t know. It’s not bad, but it’s not good in the sense of me necessarily acquiring money or cache. I’m not wired that way, I’m a drudge, and secretly proud of it, since otherwise I’d be self-destructively envious of the people around me, especially at work. I secretly disdain some because they’re way smarter, richer, and saner than me, they glide through life’s tornados – seemingly unappreciative of their wind-proofing. If that makes me fucked up, I won’t deny it. So let’s see how this one plays out.