All over the news today is a story about two Bear Stearns hedge fund managers who were indicted on charges that they defrauded investors. According to the Times, prosecutors are building their case on e-mails between the two men who were arrested today. “I think we should close the funds now,” wrote Matthew Tannin to Ralph Cioffi (they plead not guilty) before telling investors it was a good time to put money in their funds that were heavily invested in the subprime mortgage market. One allegedly withdrew his own money while investors lost about $1.6 billion, “setting off a financial chain reaction that has rattled global markets, led to more than $350 billion in write-downs, cost a number of executives their jobs and culminated in the demise of Bear Stearns itself,” the Times reports.
I argue in Slackonomics that it could very well be up to Generation X to bring the economy back from the brink. First, do we kill all the Hedge Fund managers? Not necessarily. In this week’s New York magazine is a profile of 39-year-old Hedge Fund manager David Einhorn, a very successful AND highly principled manager of Greenlight Capital. I almost wrote “but” instead of “and” as if successful and principled are mutually exclusive, but that is in fact my point — they aren’t! Putting these two ideas back together is one of the challenges facing Generation X as we move into positions of leadership.