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We Watch the Hedge Fund Hearing So You Don't Have To

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That was it? The Senate banking committee held its hearing on hedge funds today and the only impression we came away with was that the perennial faith of Senators and bureaucrats that they can pass laws and regulations to protect investors from fraud and loss is, like, stronger than ever. It was like stumbling across a group of druids in the woods practicing a long-dead religion.
Some highlights from our viewing of the webcast after the jump.

•Chris Cox says the SEC is still considering appealing the decision which through out the rules requiring hedge fund managers to register. But, he adds, this has to be weighed against possible damage to the SEC’s reputation that might arise from another court defeat. Well, it’s nice of him to make it so clear: the main function of bureaucrats protecting the reputations and enhance the reputation of their bureaucracies.
•Chris Cox also says the SEC is pondering emergency regulations to fill the gap left by the appeals court decision.
•He thinks hedge fund regulation is now inadequate. As far as we can tell, he means that it’s hard for the SEC to tell what hedge funds are up to most of the time. And the government needs to know everything.
•Millionaires are dupes and cannot be trusted with their own money. Don't let them invest in hedge funds. Million-and-a-halfaires, however, are totally different.
•Please pay no attention to the thing doing real reputational damage to the SEC—former SEC investigator Gary Aguirre’s allegation that he was fired for attempting to investigate insider trading involving a large hedge fund and an important Wall Street CEO. Allegations he made under oath and penalty of perjury before the Senate judiciary committee. You might think the banking committee—which is supposed to oversees the SEC—would be interested in this topic. But then you’d be wrong.