Hedge Fund Regs...So Yesterday... --What About Bank Regs?

The whole hedge-funds-need-to-be-regulated talk is losing steam...

From the WSJ, "Policy Makers Ease Push to Raise Fund Oversight" April 16, 2007: "Some policy makers in continental Europe are toning down their calls to step up oversight of hedge funds, given U.S. and U.K. resistance."

And also from the WSJ, "Bernanke Says Don't Regulate Hedge Funds Too Heavily," April 11, 2007: "WASHINGTON -- Federal Reserve Chairman Ben Bernanke warned against heavy regulation of hedge funds, saying the current market-based approach is working."

But in all the flurry about hedge funds have we lost our common sense? Hedge funds don't act on their own. If they did, i'd have a hedge fund too...

Hedge funds need money like everyone else, and investors or BANKS are the typical sources. Investors are fickle and difficult, but banks, man; banks will do anything for hedge funds. And what better toadies to have around than american banks. they have serious dependency issues, i swear. it's like they want to be part of the 'cool' crowd, so they'll do anything to be on the inside -- even if it means putting billions at risk...

For example - Banks are geniuses. --> let's lend money to hedge funds so they can pay out a big dividend when the hedge fund goes public!
From the WJS on April 17, "Executives Hedge Their Own IPOs":

"Here is how it works: Wall Street's investment banks loan these private firms significant sums of cash as the companies consider initial public offerings of shares. The loan money then is used to pay fat dividends to top stakeholders, typically senior executives in the companies, and can be paid down later with IPO proceeds or management fees and the like."

..."Last year, Fortress Investment Group, the New York money manager that recently became the first U.S. hedge fund to sell shares in an IPO, borrowed $750 million from a consortium of lenders, freeing up $250 million that it put toward a dividend to five key executives in the process. Blackstone Group, which announced plans late last month to undertake a roughly $4 billion IPO by selling a 10% stake of the company, is also contemplating a similar dividend, according to people familiar with the matter."

. I mean, why not? don't hedge funds print money? isn't this a risk free investment? yeah, yeah,...course....(cough - Amaranth - cough).

STOP THE MONEY MADNESS AT THE SOURCE! Yeah that means you Goldman...

OR at least make things equal. 14th amendment, yo. -- hey banks! yeah, i'm talkin to you; i need a 47 million dollar loan stat! i'm totally in love with this LBO idea, and you know i know your weakness for givin' money for nothin'....