Are you a hedge fund that’s made it a habit of doing right by your clients? Just barely justifying your fees? Doing your job? SEC director of enforcement Robert Khuzami is on to you. He knows the only way anyone could beat the market by 3 percent (or what he calls “aberrational performance”) is by being a genetic freak or criminal. So everybody just sit there with your hands in the air. You’re all suspect.

Recently, during congressional testimony, Robert Khuzami, the Director of the Division of Enforcement for the U.S. Securities and Exchange Commission (SEC), faced tough questions regarding the SEC’s response to the Madoff scandal. In response, Khuzami revealed an investigative initiative concerning hedge funds. Enforcement is now focusing on hedge funds that outperform “market indexes by 3% and [are] doing it on a steady basis.” Khuzami referred to such performance as “aberrational,” and stated that Enforcement is “canvassing all hedge funds” for such “aberrational performance.”

SEC Enforcement Division To Focus On Hedge Funds That Outperform The Market [MWE via Heidi Moore]

100 comments (hidden to protect delicate sensibilities)
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Comments (100)

  1. Posted by AmericanBandersnatch | March 29, 2011 at 3:08 PM

    Note to Khuzami: Selection Bias

  2. Posted by Anonymous | March 29, 2011 at 3:11 PM

    Have you been dropped on your head as a child? Do you have weight issues? Does that seventh nose ring make you feel youthful anger every time in pokes your septum? Well come on down and paRRRty – we’ll have DJ Freakazoid spinning in the parking lot!

  3. Posted by Thlayli | March 29, 2011 at 3:11 PM

    One can never underestimate stupidity. Especially those working for the government.

  4. Posted by Guest | March 29, 2011 at 3:16 PM

    That’s why it’s important to keep the returns low and steady at 1.25% a month. I never got caught that way.

    Love,
    Bernie

  5. Posted by Chuddy | March 29, 2011 at 3:20 PM

    Whew – we dodged a bullet there……….

    ~ Phil and his Pigs

  6. Posted by guest | March 29, 2011 at 3:23 PM

    I’m tired of financial service sector workers complaining. Just like every other industry in America, you’re either going to be regulated on the front end or face enforcement on the back end. Stop bitching about being subject to the law the same as everyone else.

  7. Posted by Go Away and Die | March 29, 2011 at 3:27 PM

    from the tone of this post, i presume you like it in the back end, no?

  8. Posted by John Mack | March 29, 2011 at 3:31 PM

    He’s talking to you, Fleece Head!!!!

  9. Posted by Richard Cripples | March 29, 2011 at 3:32 PM

    Khuzami went on to say “in order to make this type of manipulation more difficult, I, along with many of my colleagues, will be submitting our resumes to all suspect firms on a weekly basis. It is my belief that the sheer volume of resumes will overwhelm the administrative staff and not give them adequate time to create phony financial statements. In order for us to closely monitor the progress of this project I request that all true Americans (not employed by the SEC) immediately cease in submitting their resumes to any hedge funds for the foreseeable future. It won’t be easy, we will most likely have to interview at these firms as well in order to keep them as distracted as possible, but it is a sacrifice we are willing to make. Thank you, and God bless the USA.”

  10. Posted by Lewis Winthorpe III | March 29, 2011 at 3:33 PM

    Outperforming the market by 3% is the new getting killed by it.

  11. Posted by Lewis Winthorpe III | March 29, 2011 at 3:33 PM

    Outperforming the market by 3% is the new getting killed by it.

  12. Posted by guest | March 29, 2011 at 3:35 PM

    I’d actually prefer they tag team it. Heavy regulation on the front end, tax the shit out of the profits, then jail the crooks.

  13. Posted by guest | March 29, 2011 at 3:35 PM

    I’d actually prefer they tag team it. Heavy regulation on the front end, tax the shit out of the profits, then jail the crooks.

  14. Posted by Phil | March 29, 2011 at 3:41 PM

    I’d like to know if one can bank a -20% year and use it to offset 5 up 4% years?

  15. Posted by revolution capital | March 29, 2011 at 3:42 PM

    I have no concerns

  16. Posted by revolution capital | March 29, 2011 at 3:42 PM

    I have no concerns

  17. Posted by Seaman Bodine | March 29, 2011 at 3:46 PM

    This is actually true, of AUM is > 10bn. That’s what SAC is headed for the Hershey Highway.

  18. Posted by Seaman Bodine | March 29, 2011 at 3:46 PM

    This is actually true, of AUM is > 10bn. That’s what SAC is headed for the Hershey Highway.

  19. Posted by 5th grader | March 29, 2011 at 3:47 PM

    Have you ever heard of alpha, skewness, kurtosis, fat tails, assymetric payoffs or leverage you closet indexing government douche?

  20. Posted by TWATHAMMER | March 29, 2011 at 3:48 PM

    Just like your cocksucking, ass lapping, ball licking, pussy eatging mother.

    Just sayin’.

  21. Posted by Go Away and Die | March 29, 2011 at 3:49 PM

    you are obvioulsy new here and have no idea what i meant by ‘liking it in the back end’

    again, please jump out the nearest window

  22. Posted by Chuddy | March 29, 2011 at 3:50 PM

    I have heard people refer to me as fat tailed

    - Maria

  23. Posted by Chuddy | March 29, 2011 at 3:51 PM

    looks like someone is studying for Level I of the CFA exam!!!!

  24. Posted by Go Away and Die | March 29, 2011 at 3:53 PM

    you suck your dad’s balls with that mouth?

  25. Posted by guest | March 29, 2011 at 3:55 PM

    No, I knew what you meant – you obviously didn’t understand by my playful reply that they “tag team it”.

    Maybe I’ll go back over to Above The Law.

  26. Posted by Fund Manager | March 29, 2011 at 3:56 PM

    Note to self, change hurdle rate and make performance fees variable.

  27. Posted by AmericanBandersnatch | March 29, 2011 at 4:06 PM

    I had to see Dr. Van Nostrand about a bad case of kurtosis.

  28. Posted by Guest | March 29, 2011 at 4:16 PM

    They’re not focusing on a certain size. It’s ANYONE doing over 3 percent.

  29. Posted by CT | March 29, 2011 at 4:30 PM

    he clearly understood it, you dumb shit, which is why he told you his sexual preference is to be fucked from both ends. but congrats on thinking ‘liking it in the back end’ was some kinky move only you and your boys know about.

  30. Posted by FrankBarney | March 29, 2011 at 4:39 PM

    I think this will go down as one of those brilliant government quotes, such as “Fannie and Freddie are adequately capitalized”

  31. Posted by AspiringSEClawyer | March 29, 2011 at 4:41 PM

    Gundlach has been outperforming, where can I get a job monitoring his internet traffic?

  32. Posted by STAR | March 29, 2011 at 4:42 PM

    Whirrrrr
    Beeeeep
    Bloooop

    OH SHIT, STAR ADVISES STAR MANAGERS TO PUT ALL UBS DRIVES INTO THE MICROWAVE – AFTER PIZZA POCKETS ARE DONE.

  33. Posted by BigTrannySurprise | March 29, 2011 at 4:44 PM

    In response, Khuzami revealed an investigative initiative concerning SEC employees. Enforcement is now focusing on employees that outperform “normal on-the-job porn consumption by 3% and [are] doing it on a steady basis.” Khuzami referred to such viewing habits as “aberrational,” and stated that Enforcement is “canvassing all employees” for such “aberrational viewing habits.”

  34. Posted by BigTrannySurprise | March 29, 2011 at 4:44 PM

    In response, Khuzami revealed an investigative initiative concerning SEC employees. Enforcement is now focusing on employees that outperform “normal on-the-job porn consumption by 3% and [are] doing it on a steady basis.” Khuzami referred to such viewing habits as “aberrational,” and stated that Enforcement is “canvassing all employees” for such “aberrational viewing habits.”

  35. Posted by BigTrannySurprise | March 29, 2011 at 4:44 PM

    In response, Khuzami revealed an investigative initiative concerning SEC employees. Enforcement is now focusing on employees that outperform “normal on-the-job porn consumption by 3% and [are] doing it on a steady basis.” Khuzami referred to such viewing habits as “aberrational,” and stated that Enforcement is “canvassing all employees” for such “aberrational viewing habits.”

  36. Posted by Jason | March 29, 2011 at 4:51 PM

    Annoucing a new fee schedule.
    Mgmt Fee= 0%
    Incentive Fee= 100%
    Hurdle Rate = Bmark + 2.99%

  37. Posted by Oswald Gruebel | March 29, 2011 at 4:53 PM

    maim yourself

  38. Posted by Oswald Gruebel | March 29, 2011 at 4:53 PM

    maim yourself

  39. Posted by STAR! | March 29, 2011 at 4:56 PM

    Whirrrr
    Beeeeep
    run returns.exe
    run headline.exe

    zirrrrp
    bing

    report: STAR over calculated in intial run. No valid reason for Greenberg to worry. Greenberg may continue his hunt for best tea bagging.

  40. Posted by STAR! | March 29, 2011 at 4:56 PM

    Whirrrr
    Beeeeep
    run returns.exe
    run headline.exe

    zirrrrp
    bing

    report: STAR over calculated in intial run. No valid reason for Greenberg to worry. Greenberg may continue his hunt for best tea bagging.

  41. Posted by STAR! | March 29, 2011 at 4:56 PM

    Whirrrr
    Beeeeep
    run returns.exe
    run headline.exe

    zirrrrp
    bing

    report: STAR over calculated in intial run. No valid reason for Greenberg to worry. Greenberg may continue his hunt for best tea bagging.

  42. Posted by General Disarray | March 29, 2011 at 4:57 PM

    I’m going to gather from your posts that you are a middle-class at best worker with no real concept of how real life works. And if you went to college (presumably a liberal arts college from your leftist leanings) you did not bother to take economics. So let me simplify this as much as possible. Assuming you aren’t running your own business, your job is entirely the result of the highest income workers not being taxed to death. Government salaries? Paid by the taxpayers. And oh by the way, the people earning in the top 1%? They pay 40-50% of the tax receipts in this country. Those jobs provided by the private sector? They exist because the wealthy had the money to either expand their business or invest, directly or indirectly, in other businesses and ventures. If you tax the wealthy beyond reason, they will allocate money away from the United States and into higher-growth, lower-tax countries and you will eventually lose your job to people who don’t whine like you.

    And if you want to look at the effect of regulation and taxes, simply take a look at mainland Europe and, more recently, the UK. Innovation is stifled, because you cannot enjoy the fruits of your labor. Money flows to tax-friendly countries like Switzerland, as is the case in the UK. People pay hefty sums to find ways of dodging taxes. So, since 1990 to about 2008, Western Europe saw population growth that outstripped GDP growth by about 2% a year. This means that by and large, Western Europe got poorer per person for almost 20 years. And the business left for Eastern Europe and Asia, so unemployment was structurally high at 10-15% a year during peak employment years and was largely financed by heavy government borrowing.

    Your way means failure. Not even joking, your tiny, narrow-minded, uneducated, and overall poorly thought out world view results in huge long-term structural unemployment (while unemployment is high right now, it’s largely temporary), poor growth, and the overall rise in poverty per person. So shut up. Go back to watching left-wing commentators telling you exactly what you want to hear and leave the real world opinions to people who know better.

  43. Posted by General Disarray | March 29, 2011 at 4:57 PM

    I’m going to gather from your posts that you are a middle-class at best worker with no real concept of how real life works. And if you went to college (presumably a liberal arts college from your leftist leanings) you did not bother to take economics. So let me simplify this as much as possible. Assuming you aren’t running your own business, your job is entirely the result of the highest income workers not being taxed to death. Government salaries? Paid by the taxpayers. And oh by the way, the people earning in the top 1%? They pay 40-50% of the tax receipts in this country. Those jobs provided by the private sector? They exist because the wealthy had the money to either expand their business or invest, directly or indirectly, in other businesses and ventures. If you tax the wealthy beyond reason, they will allocate money away from the United States and into higher-growth, lower-tax countries and you will eventually lose your job to people who don’t whine like you.

    And if you want to look at the effect of regulation and taxes, simply take a look at mainland Europe and, more recently, the UK. Innovation is stifled, because you cannot enjoy the fruits of your labor. Money flows to tax-friendly countries like Switzerland, as is the case in the UK. People pay hefty sums to find ways of dodging taxes. So, since 1990 to about 2008, Western Europe saw population growth that outstripped GDP growth by about 2% a year. This means that by and large, Western Europe got poorer per person for almost 20 years. And the business left for Eastern Europe and Asia, so unemployment was structurally high at 10-15% a year during peak employment years and was largely financed by heavy government borrowing.

    Your way means failure. Not even joking, your tiny, narrow-minded, uneducated, and overall poorly thought out world view results in huge long-term structural unemployment (while unemployment is high right now, it’s largely temporary), poor growth, and the overall rise in poverty per person. So shut up. Go back to watching left-wing commentators telling you exactly what you want to hear and leave the real world opinions to people who know better.

  44. Posted by General Disarray | March 29, 2011 at 4:57 PM

    I’m going to gather from your posts that you are a middle-class at best worker with no real concept of how real life works. And if you went to college (presumably a liberal arts college from your leftist leanings) you did not bother to take economics. So let me simplify this as much as possible. Assuming you aren’t running your own business, your job is entirely the result of the highest income workers not being taxed to death. Government salaries? Paid by the taxpayers. And oh by the way, the people earning in the top 1%? They pay 40-50% of the tax receipts in this country. Those jobs provided by the private sector? They exist because the wealthy had the money to either expand their business or invest, directly or indirectly, in other businesses and ventures. If you tax the wealthy beyond reason, they will allocate money away from the United States and into higher-growth, lower-tax countries and you will eventually lose your job to people who don’t whine like you.

    And if you want to look at the effect of regulation and taxes, simply take a look at mainland Europe and, more recently, the UK. Innovation is stifled, because you cannot enjoy the fruits of your labor. Money flows to tax-friendly countries like Switzerland, as is the case in the UK. People pay hefty sums to find ways of dodging taxes. So, since 1990 to about 2008, Western Europe saw population growth that outstripped GDP growth by about 2% a year. This means that by and large, Western Europe got poorer per person for almost 20 years. And the business left for Eastern Europe and Asia, so unemployment was structurally high at 10-15% a year during peak employment years and was largely financed by heavy government borrowing.

    Your way means failure. Not even joking, your tiny, narrow-minded, uneducated, and overall poorly thought out world view results in huge long-term structural unemployment (while unemployment is high right now, it’s largely temporary), poor growth, and the overall rise in poverty per person. So shut up. Go back to watching left-wing commentators telling you exactly what you want to hear and leave the real world opinions to people who know better.

  45. Posted by General Disarray | March 29, 2011 at 4:57 PM

    I’m going to gather from your posts that you are a middle-class at best worker with no real concept of how real life works. And if you went to college (presumably a liberal arts college from your leftist leanings) you did not bother to take economics. So let me simplify this as much as possible. Assuming you aren’t running your own business, your job is entirely the result of the highest income workers not being taxed to death. Government salaries? Paid by the taxpayers. And oh by the way, the people earning in the top 1%? They pay 40-50% of the tax receipts in this country. Those jobs provided by the private sector? They exist because the wealthy had the money to either expand their business or invest, directly or indirectly, in other businesses and ventures. If you tax the wealthy beyond reason, they will allocate money away from the United States and into higher-growth, lower-tax countries and you will eventually lose your job to people who don’t whine like you.

    And if you want to look at the effect of regulation and taxes, simply take a look at mainland Europe and, more recently, the UK. Innovation is stifled, because you cannot enjoy the fruits of your labor. Money flows to tax-friendly countries like Switzerland, as is the case in the UK. People pay hefty sums to find ways of dodging taxes. So, since 1990 to about 2008, Western Europe saw population growth that outstripped GDP growth by about 2% a year. This means that by and large, Western Europe got poorer per person for almost 20 years. And the business left for Eastern Europe and Asia, so unemployment was structurally high at 10-15% a year during peak employment years and was largely financed by heavy government borrowing.

    Your way means failure. Not even joking, your tiny, narrow-minded, uneducated, and overall poorly thought out world view results in huge long-term structural unemployment (while unemployment is high right now, it’s largely temporary), poor growth, and the overall rise in poverty per person. So shut up. Go back to watching left-wing commentators telling you exactly what you want to hear and leave the real world opinions to people who know better.

  46. Posted by Had 2 | March 29, 2011 at 4:57 PM

    you. kill. self.

  47. Posted by Had 2 | March 29, 2011 at 4:57 PM

    you. kill. self.

  48. Posted by Had 2 | March 29, 2011 at 4:57 PM

    you. kill. self.

  49. Posted by Had 2 | March 29, 2011 at 4:57 PM

    you. kill. self.

  50. Posted by Guest | March 29, 2011 at 5:00 PM

    Actually I refer to you as platykurtic
    -LEH Quant

  51. Posted by Guest | March 29, 2011 at 5:02 PM

    Is that paved with the regular or almond?
    -AIG Quant

  52. Posted by Guest | March 29, 2011 at 5:04 PM

    Our models have the necessary sophistication to offset the risk of “aberrational performance”

    -D.E. Shaw Analyst

  53. Posted by Spanishmoon | March 29, 2011 at 5:37 PM

    “SEC tranny porn experts have informed us that Repo 105 is still legal” – Dick Fuld

  54. Posted by guest | March 29, 2011 at 5:42 PM

    Yeah, you don’t know shit.

    Those high-growth, low-tax countries aren’t actually a viable option for most businesses to fully relocate to. There is little rule of law, narrowly defined property rights, general instability in government, and little-to-no infrastructure to make it a one-to-one proposition to move operations offfshore.

    High-growth, low-tax countries are simply a red herring when it comes to real threats to poach high earning Americans looking to escape high taxes. The comparison to the UK is as far as our current financial situation is apt, but hardly the only option for US policymakers to follow.

    A more desirable and equitable option is to follow the model of Northern European nations like Denmark, Norway, Finland, and most importantly, Germany. Those nations have higher tax rates on individuals, a VAT for corporate taxes, and unionized fairly compensated workforces.

    America has to play by the same rules as everyone else. High-growth, low-tax is oxymoronic in developed economies with heavy social welfare responsibilities; it is impossible when you factor in our federalist system, corporate welfare subsidies, and military industrial complex.

    Go back to UChicago.

  55. Posted by Go_Back_to_the_Onion_Peasant | March 29, 2011 at 6:00 PM

    You misspelled “Chicago” silly

  56. Posted by Guest | March 29, 2011 at 6:01 PM

    They don’t need to fully relocate to those countries. You can have manufacturing in China, R&D in Korea, IT/OPS/legal in India, upper management in Aus/HK/Singapore (or any non-wealth-absconding sufficiently comfortable country), and only $10/hr order pickers/packers in the US (in right to work states thank you very much). Its called a global supply chain.

    Take your worthless Fordham law degree and go back to Above the Law where you can bitch about how hard it is to get pussy on your associates offer deferral of 50k/year at some second rate firm that will be put out of business by e-discovery in 5 years anyway.

  57. Posted by Anonymous | March 29, 2011 at 6:04 PM

    If taxes have no effect on growth, why is it that American states with lower tax burdens generally have lower unemployment rates than those with high tax burdens?

    I’d also say that Germany is a special case in that they absorbed their very own home-grown third world nation in the form of the DDR…

  58. Posted by ExtraOrdinaryPopularDelusions | March 29, 2011 at 6:13 PM

    “And oh by the way, the people earning in the top 1%? They pay 40-50% of the tax receipts in this country.”

    They also happen to own about 40% of the assets. Meanwhile, the bottom 40% owns 1% but pays 3.3%. You understand the difference between 50:40 and 3.3:1, right?

    “Paid by the taxpayers.”

    But if it’s a public to private subsidy it doesn’t count, right? After all, there’s no possible way private enterprise could possibly be subsidized when the government plops down $800bil in infrastructure, defense, etc., spending, right?

    I hate to break it to you, but truly private enterprise is only about 30% of the economy if you bother to calculate how the subsidies actually pan out. (45% military + 25% government) Your notion of what is actually “private” is about as juvenile as See Spot Run.

    “This means that by and large, Western Europe got poorer per person for almost 20 years.”

    Have you bothered to graph US avg purchasing power since, say, 1973?

    Leave these discussions to the adults, please.

  59. Posted by Gossip_Girl | March 29, 2011 at 6:21 PM

    1) See Spot Run was a good Movie.

    2) Sources? (Wikipedia does not count)

  60. Posted by Guest | March 29, 2011 at 6:44 PM

    Trying to use government expenditures and crony capitalism examples to illustrate that the money really doesn’t come from private taxpayers is naive. The private economy doesn’t have to be 100% private for it to be true that that is where the wealth and value is generated.

    For instance, if the government bails out a bank or gives a contract to a defense contractor, that doesn’t mean that the government created that value and so the existence of the bank or defense contractor is predicated on government the way the existence of gov. union parasites is predicated on private taxpayers. The government is merely redistributing private wealth from its generators (wealthy individuals) to its politically favored constituencies (whether those are banks or unions is inconsequential).

    In the US purchasing power may have stagnated but employment participation has gone way up (feminist movement/anti discrimination etc). Contrast that with Europe where the combination of participation and purchasing power paints a much more moribund picture.

    Germany is a success because they 1) export to high growth low tax countries 2) their industrial workers have realized what is coming for them and agree to draconian wage and benefit freezes in order to keep their jobs which combat the otherwise growth dampening forces active in Europe.

    There is nothing “adult” about clinging to a world view that has been proven wrong over and over again in practice simply because it makes your soul feel good to “help the little guy.”

  61. Posted by n.marcus | March 29, 2011 at 6:55 PM

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  62. Posted by n.marcus | March 29, 2011 at 6:55 PM

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  63. Posted by n.marcus | March 29, 2011 at 6:55 PM

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  64. Posted by n.marcus | March 29, 2011 at 6:55 PM

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  65. Posted by n.marcus | March 29, 2011 at 6:55 PM

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  66. Posted by n.marcus | March 29, 2011 at 6:55 PM

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  67. Posted by Harvard_PhD | March 29, 2011 at 7:04 PM

    you da man

  68. Posted by Texashedge | March 29, 2011 at 7:26 PM

    “the model of Northern European nations like Denmark, Norway, Finland,”

    You mean countries with tiny, homogeneous populations and huge long-life oil reserves in the North Sea? You might as well have said we should follow the example of Qatar.

  69. Posted by Guest | March 29, 2011 at 7:56 PM

    People who work at the SEC most hate their life.

  70. Posted by Guest | March 29, 2011 at 7:56 PM

    People who work at the SEC most hate their life.

  71. Posted by Guest | March 29, 2011 at 8:41 PM

    It is great to hear individuals with an undergraduate business background discuss political economics as though they understand it. Let me preface where I am coming from by saying this (some condescending words to address your condescending words): an undergraduate business degree is something I would equate to a trade school degree focusing on the use of financial calculators and excel. You basically take half-assed versions of many different studies (business math, business economics, etc) then claim you understand pure economics or mathematics. Face it bro, you understand neither hard mathematics nor advanced economics, and you did not study a field with a large emphasis on political economics. In other words, you do not know what you are talking about and should avoid discussions of international tax theory. Go back to prancing about declaring which private school you attended and watching cable news programs in an attempt to pick up arguments to pass off as your own.

    As for the international competition to attract business (and the need to keep taxes low to avoid losing business to foreign countries), solid theories along the lines of your argument do exist, but your explanation is exceedingly simplistic and ignorant. As our friend points out, it is not feasible for most businesses to move abroad. First, unlike the countries in Europe, the US does not really have a good alternative that is similar in culture and close to family/friends. Most Americans do not want to leave this country and, in a similar fashion to why so many people live in California despite outrageously overpriced real estate and costs of living, they will not leave. Also, the US can tax the money when it is repatriated (brought back into the country) and such repatriation is actually more difficult to accomplish in a tax acceptable method than you would think. Do you really think people have not been trying to send money outside of the US through certain tax preferential countries for years? Because people do not want to leave the United States and because the US can easily tax the shit out of money when it is repatriated (either through the current Tax Regs or through amending the Regs), your argument fails. Second, why are you so sure that the incidence of increasing corporate tax rates will hit the wealthy or business’ bottom line? That presumption is not necessarily true and there are many who would counter by arguing the burden will be passed to the consumers by increasing prices on goods and services (with the wealthy having substantially the same after tax cash flow) and, therefore increased tax rates will end up as a regressive tax feature.

    The true focus of your argument should be on the direct effect of increased taxes on our domestic economy (stagnation of inovation and repressed investment pipelines). Stick with that.

  72. Posted by Length and Exchanges Committee | March 29, 2011 at 9:11 PM

    Nobody really gives a shit bro. Without any qualifications nobody is going to take the time to read something from someone who could be a tin-foil hat wearing 2nd grade teacher. Learn to make concise arguments or GTFO

  73. Posted by ExtraOrdinaryPopularDelusions | March 29, 2011 at 9:30 PM

    “You basically take half-assed versions of many different studies (business math, business economics, etc) then claim you understand pure economics or mathematics. Face it bro, you understand neither hard mathematics nor advanced economics, and you did not study a field with a large emphasis on political economics.”

    Welcome to 80% of DB. If it can shit, it shits in your face, and calls it a stochastic-implied VAR Brownian Grisanov measure with tits.

    -guy who has actual degrees in all of those things in their own right (and is unfortunately old enough to prove it)

  74. Posted by Guest | March 29, 2011 at 9:40 PM

    Meh, comments on DB are consistently the best on the internet. They can be laugh out loud funny and they can also be serious and good for debate. Always have been, always will be. As a lawyer who spends 90% of his Breaking Media time on DB and the rest on ATL, I can tell you those on ATL across the board suck, unless you’re a 1L who thinks “first!!!!!!” constitutes good commenting.

  75. Posted by CFALevel II | March 29, 2011 at 10:15 PM

    Most of that is in Level II

  76. Posted by Guest | March 29, 2011 at 10:19 PM

    I prefer a sock

  77. Posted by guest | March 29, 2011 at 11:14 PM

    first reply!!!!

  78. Posted by Super | March 30, 2011 at 12:13 AM

    How’s rentec doing these days?

  79. Posted by Super | March 30, 2011 at 12:13 AM

    How’s rentec doing these days?

  80. Posted by daniel | March 30, 2011 at 3:32 AM

    Regarding last quarter’s results, I have some bad news, and some good news. The bad news is that we did not beat the market. The good news is …

  81. Posted by daniel | March 30, 2011 at 3:47 AM

    ps…Saying wealthiest americans have the biggest of all tax burden because they pay 50% of all government tax revwnues is like saying the fattest 5% americans are the healthiest because they consume the most lettuce and tomatoes. That is, conveniently forgetting this lettuce & tomatoe, before being consumed, sits on top of a triple decker quarter pounder beef patty construction enveloped by an orgy of deep fried potato sticks then water boarded by 3 gallons of sugar distilled in a bath of phospheric acid liquid refreshment. Sure from one very specific viewpoint these 5% fatsos look really healthy on paper but damn it man, they’re fucking fat.

  82. Posted by General Disarray | March 30, 2011 at 2:45 PM

    1) I was referring specifically to tax receipts from income, and besides that, you don’t necessarily pay taxes on all owned assets, at least not on a yearly basis. That’s the whole point of capital gains taxes. It’s to spur investment and reward people for taking a risk. So it’s not 50:40, its 50:1 and 1:3.3. And that’s the bottom 40%, not bottom 1%, so really you’re looking at 3.3:40. Get your figures right.

    2) Yes, paid by the taxpayers, because government salaries are paid by either borrowing (private sector, the Fed doesn’t count they are just trying to keep rates low) or from tax receipts from the private sector. Just because the government subsidizes industry in lean years, does not mean that the cost isn’t ultimately born by the taxpayer, because it is. Who do you think is paying for that? Absent rampant inflation, the government will pay for those subsidies by taxation at the top of the growth curve. Work through the logic please. Oh and by the way, the “private” sector as you call it is only a subset of the full private sector. Consumer spending (in other words, not government spending) is 70% of GDP, even after the recession. Your notion of private is about as educated as an 18 year old wannabe economics student without the intelligence to read the third chapter of their macro book.

    3) Purchasing power is a different measure than per capita GDP. Purchasing power measures GDP growth and other factors, such as inflation, relative growth, etc. You know why purchasing power has eroded? Inflation. Why did we have inflation? Growth in the economy. Have you bothered to look at Per capita GDP growth in this country vs. Europe since, say, 1945?

    Leave these discussions to people who got their degrees in economics and actually bothered to pay attention. You cherry pick facts and figures that are not exactly the same, yet treat them as they are demonstrating the same relationship. They don’t. Go back to Above the Law and below the bar.

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