Are Hedges Risk-Averse? Really?

Why won’t John Monks hedges an effin break? He obviously has taken no oath of silence when it comes to lashing out against hedge funds. Monks, the general secretary of the European Trade Union Confederation, has joined the chorus of complainants calling hedge funds "locusts," but with a twist. He lashes out at them for suppressing innovation out of fear of shareholder backlash. "Companies doing innovative, high-risk, leading edge activities are not being given the necessary opportunities to raise capital on terms that allow them to prosper," Monks said at the Economic and Financial Affairs Council meeting last week in Helsinki.

"The pressure is all the other way to generate double-digit annual returns on capital quickly, through squeezing costs and eliminating risks." Monks' comments echo a similar refrain by Dutch union head Henk van der Kolk and German politician Fritz Munterfering who originated the disparaging "locusts" term last year. Monks, acknowledging that hedge funds maybe aren't as simple as they seem but parting with European Commission internal market and services commissioner Charlie McCreevy, who praised hedgies crucial role in keeping companies on the right path, called for the EC and the European Central Bank to launch a study of the impact of hedge funds on innovation, research and development. He pointedly said that member of financial services industry should not dominate the effort.

We second that emotion.

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