Everything I know about hedge funds, etc.

As many who know me can attest — and many who do not can imagine — I lack even a rudimentary comprehension of economic theory, fiscal policy, or any other discipline associated with money. I’ve survived seventy-three-plus years on the good graces of friends, the sufferance of family, and an occasional smile from Fate.

I am not, however, unfamiliar with certain other features of societal interaction. I have encountered and — usually at some cost — have learned to recognize swindles, sleaze, and bullshit. So while I cannot analyze the what of our current crisis, I have some understanding of the who and the how and the why. Permit me to offer my observations.

I begin with examples. Let us — because the term is used even more commonly than it is misunderstood — call them metaphors. Two will be enough to make my argument.

Stop at a news stand. Hand the clerk a dollar, and receive, in return, a copy of the daily newspaper. The newspaper is real; it was on the shelf, and now it is in your hand. The dollar is real; it was in your pocket, and now it is in the cashbox.

Visit your friendly neighborhood magician. Ask him if he has a dollar. He will gesture hypnotically beside your head, seem to pull what seems to be a dollar bill from your ear, and seem to put it in his pocket. The dollar bill may or may not be real. It may or may not be in the magician’s pocket. It was never in your ear.

For the second example, I am indebted to history. This anecdote I heard attributed to Abraham Lincoln. I cannot vouch for its authenticity, but such attribution adds color to the narrative.

Q: If you call a dog’s tail a leg, how many legs does the dog have?

A: Four. Calling a tail a leg does not make it a leg. It is still a tail.

From such evidence as this, surely at least as reliable and valid as that presented by the various paper-shuffling con artists who precipitated our crisis, I conclude the following.

  • Money which seems to appear from an improbable source probably came from someplace else.
  • If its origin is uncertain, its present location may also be uncertain.
  • It may never have been money in the first place.
  • Calling a piece of paper a valuable asset does not establish or increase its value.
  • Until proven otherwise, it is only a piece of paper.
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