The post I wrote on September 26th told a story about Brian Hunter, a young energy trader at Amaranth that lost the investors’ 6 billion US dollars after his bets on the natural gas prices went the wrong direction. Nonetheless, it seems that some have different opinions.
Jim Cramer, the current CNBC “Mad Money” host, (the show is really driving people crazy!), writing for the New York Magazine, said Hunter was “the wrong guy” to blame. Instead, Jim offered a guilt list, quite an interesting list, to the public about this financial disaster.
First, Jim pointed the finger at Amaranth’s clients. He said the Amaranth’s clients “simply don’t have the sophistication and experience to properly assess and monitor hedge funds’ performance.”
The second target on the guilt list was Wall Street investment banks, such as Morgan Stanley, Bear Stearns, and Goldman Sachs. These “fawning brokerages, of course, have no incentive to tell the clients that a firm like Amaranth is wrong to take down tons of borrowed money to bet on dubious strategies like the totally unknowable weather patterns that determine the direction of natural-gas futures.” Jim wrote.
The last category of the list is the hedge-fund consultants as well as managers of funds of hedge funds. “Most funds-of-funds people would not be smart enough to run hedge funds, yet they’re happy to take the money of those who want to invest in them.” Jim told the public.
Sounds funny, right? The guy who lost 6 billion dollars is innocent!
Basically, Mr. Jim Cramer wants to warn Americans: though the loss was directly caused by Brian Hunter, we all contributed something to this event.
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