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Tuesday, November 11, 2008

Obama chief Rahm Emanuel is hedge funds' pal

 Obama chief of staff-designate Rahm Emanuel, who's been an Illinois congressman, Democratic Party House leader,Wall Street investment banker (Wasserstein Perella), Clinton aide, and director of the failed mortgage-lending federal-bailout giant Freddie Mac,  is also a loyal ally of the troubled, highly-paid hedge fund industry, and has worked to keep taxes on their fat fees low, writes HedgeWeek admiringly. 

 Emanuel "was the top House recipient in the House of Representatives of campaign contributions from hedge funds, private equity firms and the wider securities and investment industry during the 2008 election cycle. He played a part in derailing efforts last year to have carried interest taxed as income rather than capital gains, going so far as to write a memo offering several options on how essentially to preserve the tax advantage. However, he also sponsored a bill that would have prevented hedge fund managers from deferring taxes on offshore compensation.

  "The appointment of Emanuel suggests that Obama's presumed hostility to the hedge fund industry may have been exaggerated and that the sector will get a fair hearing as the new administration begins the process of reforming US financial sector regulation. At a time when hedge fund managers feel particularly friendless, it cannot hurt to have someone who understands their business in the heart of the White House." Full story (it's not much longer) here.

  Hedge funds are the favorite investment of Harvard, Yale, Princeton, and the Pennsylvania State Employees' Retirement System. They've been mauled in the market lately, though not so badly as stocks, maybe: Hedge funds, like private equity, have done a good job convincing their clients to cover up actual losses for the next few months, in hopes they'll snap back. But if they do need a protector on high, they'll no doubt call on Emanuel, his energy, his connections, and his potty mouth.

Posted by Joseph N. DiStefano @ 9:00 AM  Permalink | 7 comments
Comments   
  • 0 like this / 0 don't   •   Posted 12:53 PM, 11/11/2008
    Too many people are reading way too much into the selection of Emanuel, and they really should know better. Just because Obama picked Rahm doesn't mean he magically changed his positions to what Rahm has said in the past.
    — Politburo
  • 0 like this / 0 don't   •   Posted 1:04 PM, 11/11/2008
    hmmmmmmmmmm.....what happened to the anti Wall street message of the campaign....hard to belive another politician misrepresented his position in the serch of votes in his anti bush-in-bed-with wall street rhetoric.....just another way they will all lie to get elected....don't worrry sheep there is more to follow in the next 100 days.
    — nuggett
  • 0 like this / 0 don't   •   Posted 1:20 PM, 11/11/2008
    Why don't you at least wait until there is an Obama administrAs the average American is taking the a hit on our 401K, the reliable Bush administration snuck through a new IRS ruling (Notice 2008 - 83) that allows banks to right off losses due to mortgage losses of banks they acquire. Expect to see the money that these banks received for freeing up credit to be used to acquire other banks and the mortgage losses will be written off their taxes. The Bush administration was the most big business driven administration in history.
    — MikeP
  • 0 like this / 0 don't   •   Posted 2:45 PM, 11/11/2008
    obama was in bed with fannie and freddie as well. politics as usual.
    — democratsruinedthecity
  • 0 like this / 0 don't   •   Posted 4:29 PM, 11/11/2008
    Not a surprise. Obama and other democrats did nothing but blame bush but the blood caused by Freddie and Frannie is on the Democrats hands especially the most guilty Barney Frank and Chris Dodd. They blame Bush for deregulation but when the issue of Freddie and Frannie came up they made sure they were excluded because they were all on the payroll...Obama included. We'll see what happens with hedge funds. Obama and Biden talk about being American and paying taxes but somehow hedge funds avoid being American. We'll see what type of change there really is. So far Obama seems to be surrounding himself with people who have been in Washington since the Sixers championship back in '83.
    — ResponsibleAmerican
  • 0 like this / 0 don't   •   Posted 8:34 AM, 11/12/2008
    When is everyone going to get mad enough to say "No more!!" to this fleecing of America by professional politicians?
    — Joe Gonnelli
  • Comment removed.


7 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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