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John Edwards - Fights for the Little Guy

Discussion in 'Sports and News' started by Boom_70, Aug 18, 2007.

  1. Boom_70

    Boom_70 Well-Known Member

    By ANDY SOLTIS, Post Wire Services

    August 18, 2007 -- Embarrassed presidential hopeful John Edwards promised yesterday to take millions of dollars of his own fortune out of a hedge fund tied to subprime lenders who foreclosed on victims of Hurricane Katrina.
    The populist candidate - who has denounced such lenders - invested $16 million of his $30 million in assets in Fortress Investment Group. The Wall Street Journal reported that 34 New Orleans homeowners struggling to overcome Katrina's aftermath faced foreclosure suits from subprime-lending units of Fortress.

    Yesterday, the red-faced Democratic candidate vowed to remove from his portfolio any Fortress funds that have a stake in those lender units.

    "I will not have my family's money involved in these firms that are foreclosing on people in New Orleans," he said while on the campaign trial in Des Moines, Iowa.

    When Fortress' connections to subprime lenders were reported in May, Edwards said he was unaware of it and would ask the company to help Katrina victims faced with losing their homes.

    Sources said Edwards spoke to senior Fortress executives and was assured something would be done.

    But the Journal's disclosures indicated the foreclosures were still being pursued and that led him to decide yesterday to divest his stake, they said.

    Edwards, a former North Carolina senator, has other connections to Fortress. He worked for the firm as a senior adviser after his losing 2004 race as Sen. John Kerry's vice-presidential running mate. He was paid $479,512 for part-time work last year, records show.

    Fortress executives also have donated more than $150,000 to Edwards' campaign during the first six months of the year.

    A spokesman for the campaign said he didn't know how quickly Edwards would be able to divest the controversial funds. He declined to say whether Edwards would give back the adviser's fee or the campaign contributions.

    Edwards has made the plight of Katrina victims a recurring theme of his bid for the Democratic nomination.

    He chose New Orleans to kick off his campaign in December, when he vowed to help poor residents recover from Katrina. In April, he returned to the city to promote his plan to end the "shameful lending practices" of subprime-mortgage firms.

    Asked yesterday if his investments damaged his image as a poverty fighter, Edward's said: "No. Everyone knows I am completely committed to eliminating poverty in this country."

    The mortgage flap was the second embarrassing disclosure this month involving Edwards and his finances.

    Edwards demanded that his Democratic rivals give back any money they received from Rupert Murdoch and boycott Murdoch's Fox News.

    But two weeks ago it was disclosed that Edwards had been paid $800,000 for a book published by a subsidiary of Murdoch's News Corp., which also owns The Post. In response, Edwards said he gave $500,000 to charity and used the rest for researchers and other expenses, although he did not provide records.
  2. The Big Ragu

    The Big Ragu Moderator Staff Member

    The irony of it all is that this makes him a somewhat good investor (and presumably a smart guy). The hedge funds that wealthy folk like Edwards have their money tied up in have been taking a slaughtering. Nearly all of them had a lot of assets invested in the subprime lender market, which has been taking a beating. For years, these companies have been making risky loans to bad credit risks--and the roosting is happening right now. They were offering unreal deals in 2004, 2005 and 2006 with initial low rates, which were set to kick in with higher adjustable rates somewhere between the second and fifth year. Not surprisingly, we started to see massive default rates and foreclosures this year, nationwide--not just in New Orleans. They were loans that never should have been made, because it was easy to see the mess that was coming.

    This has had a chain effect, because there is a secondary market for these types of loans and it no longer will touch these crappy loans that never should have been made in the first place. The result is that these companies that were making the irresponsible loans were left holding the bag. Anyone who invested in them, has a crummy investment on their hands that becomes more worthless by the day, and that includes a lot of hedge funds, nearly all of which had a great deal of exposure to this market. The hedge funds, in turn, are getting killed, because the big banks they rely on for lending are asking for more collateral before making more loans (hedge funds are usually leveraged to the hilt so they rely on investing loaned money too), and in many cases the banks are calling in the loans they have made and asking for their money back. That has a lot of these funds scrambling and selling assets at discounted rates--like a fire sale--to meet their obligations. And the rich people invested in them are taking a bath right now (although there are some smart people buying up bargains right now. One person's disaster creates another's opportunity).

    Those Bear Stearns Fortress Funds seem to be holding up fairly well, I believe. It's leverage rates have been relatively low for a fund of its type (30 cents on the dollar). This is positive on two fronts, if you're invested in the fund. First, Bear Stearns, which is solid, has the cash to meet any calls to pay back loans without having to sell its assets at distressed levels, the way a ton of other funds are right now. Second, this gives the hedge fund the money to buy those fire-sale assets at distressed levels (there are a ton of bargains out there) if they feel the reward greatly outweighs the risk.

    It's funny watching these rich fucks who don't have a clue about their money see their quant and hedge funds take a slaughtering over all of this. It looks like Edwards was smart enough to pick one that can survive and may even be able to be a vulture now and make its investors some money. But he has to sell, because instead of admitting that like everyone else, a buck is a buck to him, he is playing the charade that he's a populist man of the people who is anti things like business and investment funds. You're right, what a hypocrite and I'm glad it's going to hit his pocketbook.
  3. Simon_Cowbell

    Simon_Cowbell Active Member

    He does a little too much flaunting of his wealth.

    He is now dead to me.
  4. Cansportschick

    Cansportschick Active Member

    Even though Obama and Clinton are the front runners for the Democratic Party nomination, something tells me that Edwards could spoil everything and either come in second or may actually win.
  5. D-Backs Hack

    D-Backs Hack Guest

    Edwards needs to be more circumspect, but I don't get the notion that he must be a hypocrite because he's rich.

    I don't think Edwards' stock portfolio undermines his commitment to fighting poverty any more than I think Romney's portfolio undermines his pro-life beliefs:


    The media never bought the "blind trust" excuse from the Clintons; we'll see what happens if Mitt plays the card. I'm sure the New York Post will be all over this.
  6. And it's not "Edwards hedge fund" any more than RCA was mine, back in the day.
  7. Cansportschick

    Cansportschick Active Member

    That douchebag Romney doesn't stand a chance to win. Anything he does, won't be enough.
  8. Is it time for me to point out that the Republican party is pretty much in shambles at the moment?
  9. Cansportschick

    Cansportschick Active Member

    But that's with Guliani appearing to the the front runner?
  10. hondo

    hondo Well-Known Member

    If you need more evidence than this that he's a hypocrite, you've got your lib blinders on, as usual.
    Admit it...the guy's a pretty-boy empty suit and now we now that he was prepared to make money off the backs of Katrina victims had this not come to light.
  11. spinning27

    spinning27 New Member

    Come on Boom and Hondo, you guys are supposed to be bashing the people who couldn't pay their mortgages.
  12. D-Backs Hack

    D-Backs Hack Guest

    So, anyone who professes to care for the plight of the poor must take a vow of poverty?

    Then you believe that Romney is a hypocrite? Cheney too?

    And I'll pass on the character-judgment lecture from you, thanks.
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