[tcostell]

You cite the LTCM collapse and Bear Stears as if these events support your argument, but I don't believe they do. Not every problem can be solved by passing a law against it, and telling the government what was going on at these institutions wouldn't have made anything better for anyone. On the contrary it almost certainly would have made things worse because it would have reinforced the illusion that government was "handling" things and that they understood what was going on. But in fact there is simply no way for that to happen. Leverage alone isn't the problem, and government CANNOT understand what the actual problem is. Government is too crude a tool, with a feedback and correction mechanism that is far too slow even when it works at all. If they hired someone who could understand the numbers they'll be seeing, they wouldn't be empowered to do anything about it.

You say the issue is disclosure, but the question really is who is entitled to that disclosure. You seem to feel that the government is entitled to it. I vehemently disagree. If you were arguing that the investors in the hedge funds are entitled to it, then I might be more persuaded, but they entered into a contract with the hedge fund. That's the time they should be talking about disclosure, and they often are, so they don't need the government for that either.

Seriously ... go find another bogeyman.

[shrinkermd]

When LTCM and BS failed, they required intervention by the Fed. Apparently, the current view is they have their privacy but we have the responsibility if they fail.

Sooner or later someone will hold a hearing on the Hill and information will begin to flow. Then there will be enabling legislation designed to make hedge funds more transparent. Again, there need not be actual regulation.

Finally, someone will work up the courage to wonder, for example, how much George Soros and others save on corporate and personal income taxes by locating their businesses off shore. Not only the taxes, but is it really possible with no reporting requirements for our financial system to avoid periodic failure engendered by hedge funds?

Take some guts. Both parties have been subsidized by big time hedge fund contributors.

I might not know much, but I know I need to know more but transparency is completely lacking.