Leopold - How to Make a Million Dollars an Hour

Contents

Copyright 2013 by Les Leopold. All rights reserved

Jacket Design: Wendy Mount

Jacket Photograph: John Kuczala/Getty Images

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Library of Congress Cataloging-in-Publication Data

Leopold, Les.

How to make a million dollars an hour : why hedge funds get away with siphoning off Americas wealth / Les Leopold.

p. cm.

Includes bibliographical references and index.

ISBN 978-1-118-23924-7 (cloth); ISBN 978-1-118-43814-5 (ebk);

ISBN 978-1-118-43811-4 (ebk); ISBN 978-1-118-43812-1 (ebk)

1. Hedge funds. 2. Investment advisors. 3. Wealth. 4. Income distribution.

I. Title.

HG4530.L423 2013

332.64524dc23

2012025744

With love to Frank ,

Alvina, and Darlene Szymanski

Introduction

So, you want to make a million dollars an hour? Who wouldnt? Just think of what you could do. Work ten minutes and buy yourself a Ferrari. Work another half hour and retire. Or tough it out for just one day and make as much as the average family makes in 179 years!

Youre about to learn the secrets that enabled Americas top hedge-fund managers to pull down astounding sums in the space of minutes.

Maybe youre a little hesitant, though. You have a few questions you need answered first. Like, what would you have to do, exactly? What is a hedge fund, anyway? How does it make so much money? And do you have to be Einstein to get that rich?

If youre a do-gooder, you might also want to know whether running a hedge fund does any harm. Does it suck blood from the poor around the world? Does it rob widows and orphans? Does it profit from arms smuggling or global warming?

If youre really righteous, you wont worry just about the damage done. You will also ask whether hedge funds do any good for anyone other than those hauling in a million an hour. You might even worry about whether, as a newly minted hedge-fund billionaire, you might be undermining democracy itself. Thats a heavy loadso heavy, in fact, that it might keep you from concentrating fully on making a million an hour. We understand. No one wants to be accused of wrecking society.

Well, dont fret. Weve got you covered on all fronts. As youll soon see, Im obsessed with these questions. Im especially worried about whether the million-an-hour crowd produces anything positive at all for our society and economy.

Its a perverse question, I know. Most people (and economists) assume that if hedge funds make piles of money, they must be creating value. The more they make, the more value they produce by definition. Who cares what value hedge funds actually produce or whether the activity is socially useful. Those guys are rich, and we wanna be, too!

A lot of people, including most people who write books about hedge funds, just cant stop gushing about these financial elites. Theyre the best of the best of the best, and they deserve every billion they get. So what if a couple of the big guys get busted (think Bernie Madoff, Raj Rajaratnam, and Allen Stanford)? So what if a couple of the big hedge funds were primary instigators of the greatest financial crash since the Great Depression.

If you want to know what hedge funds really do, however, youll soon discover that a straight answer is hard to come by. Mostly, these guys (and yes, they are nearly all guys) keep their efforts well hidden from view. Trade secrets and mystical lore shroud their every move. Neither regulators nor the public have any idea how so much money is minted.

So, who is our ideal target audience for this book? You. Im thinking about average workers who havent seen a real raise for years, who dont know whether their jobs will be there next week, who watch health-care deductibles rise higher and higher while coverage shrinks, and who see their retirement funds going nowhere. Im also thinking of teachers, firemen, police officers, and other public servants who serve as piatas for self-promoting politicians and pundits, only because they still have decent jobs with reasonable benefits. Meanwhile, because of the Wall Street crash, those jobs and benefits are being cut, cut, cut. And, of course, Im thinking about their kids, who are struggling to pay for college, who get saddled with enormous debts, and who then search for jobs that dont exist.

What about professionals? Dont worry, Im thinking about you as well. When the top money managers make twenty thousand times more per year than the average pediatrician, youve got to wonder whats up. You work hundred-hour weeks tending to sick children, while some snot-nosed kid in a hedge fund makes more in one hour than youll earn in ten years .

So, all you production workers, nurses, school teachers, cops, students, and professionals, welcome aboard. You must be damn curious about how these hedge-fund honchos are making so much, doing God knows what. You may even wonder if you can get there, too. After all, this is America! At the very least, Im sure you want to know whether their hedge-fund wealth comes from picking your pockets.

We can find the answers, but it requires that you join us in a walk on the wild side of fantasy finance. Please follow our twelve-step guide to accumulating vast riches. This book is all youll ever need to peer into the million-an-hour club and maybe, just maybe, become a member, or, at the very least, a fierce opponent.