Posted by: stiltsville | April 17, 2010

And if you thought Goldman was bad…

Imagine if Toyota made cars that crashed in a speeding fireball of death on purpose, just so they could collect life insurance on the drivers… meet Magnetar.

Magnetar is a hedge fund. Normally, hedge funds make money because they know lots of millionaires who give them money to invest, they hire really smart people and work really hard (see American Dream). However, … Magnetar realized that hard work and smart people cost money, so they decided to be thieving thieves instead, Cause there’s more profit in thievery than there is in honesty, don’t cha know.

So the Magnetarians put together an investment fund of the crappiest doomed investments they could find. Stuff nobody else would touch with your ten-foot pole. They made this big pile of crap and had a bunch of name-brand investment places put shiny, sparkly logos on it and sell it off in chunks to pension funds and retirees, people who would actually need their money back one day, to eat.

And then the Magnetarians took out big fat juicy insurance on their pile of crap. So if the pile of crap went bankrupt, the insurance companies would have to give Magnetar a big pile of cold, hard cash. Well, right on schedule the pile of crap went bankrupt, American investors got shafted and the Magnetarians walked away with the cash. Heads I win, tails you lose.

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