Lead In The Pipes

Dallas Mavericks owner Mark Cuban seems to have an explanation for why the people managing traditionally conservative, stable institutions have started taking enormous, (and, as we’ve seen this, increasingly disastrous) risks :

If you run a major hedge fund or fund of any kind, once you have put enough cash in the bank to get to your “F U Money Level” there is absolutely no reason not to throw the Hail Mary pass and make high risk investments every chance you get.

What is the down side ? Lets just say for example, you run Fannie May or Freddie Mac. You basically fuck up the entire housing economy. Your punishment ? You walk away with 9m and 14m dollars as severance. Would you take either of those jobs ?

I am not an expert in this. I don’t, however, really disagree with any of his analysis.

Share This