patrick.net

We've had many posts on Laissez-Faire, anarchic capitalism vs. regulated markets here before, and I'm sure we'll have more in the future. Just saw this gem today (nod to Ben Jones) and wanted to share it with you. Here is a succinct real-world example of why I believe that some government regulation of credit/capital markets is necessary and good for the economy, and why private firms cannot always be trusted to "self-regulate" all the time.

Fund manager's fun sailing away

John Devaney, the CEO of United Capital Markets, a fund that specializes in buying and selling bonds that are backed by the mortgage payments, particularly adjustable rate subprime mortgages, has put his 142-foot yacht "Positive Carry" up for sale, according to a yacht broker's Web site.

Devaney's fund has run into trouble lately. A spokesman for the firm told Reuters on July 3 that it had stopped honoring request from some of its investors for redemptions, or withdrawal, of investments

"The consumer has to be an idiot to take on those loans," he said. "But it has been one of our best-performing investments."

Discuss, enjoy...
HARM

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