The Right Coast

December 17, 2004
Sense and Sensibility at the Times
By Maimon Schwarzschild

Our colleague Frank Partnoy -- who is superbly knowledgeable about the financial markets -- had an op-ed in the New York Times on Wednesday, on possible regulation of hedge funds. What he says seems completely sensible to me: regulate, but don't be overzealous.

(He explains what a hedge fund is, in a way that would be completely clear to anyone with basic, adult acquaintance with the market. That doesn't include me, I'm afraid. Is a hedge fund a sort of speculative mutual fund? What is it that makes it a hedge fund, rather than just a dodgy mutual fund? Is the point that if it is a hedge fund, it is now unregulated, whereas a mutual fund is regulated by the SEC and/or other watchdogs? As you can see, it's a good thing the world doesn't entrust me with any serious money.)

Reading this op-ed -- with great vicarious pride for Frank -- I glanced at the rest of the Times editorial and op-ed pages for the day. (I usually don't even give them a glance any more.) Frank's good sense stood out. There was otherwise: an editorial clamouring for Pinochet to be put on trial. An editorial denouncing "reactionary" oversight of the EPA. A febrile set of letters about a US "Department of Disinformation". Sense and sensibility: in Jane Austen's very unflattering use of "sensibility" to mean bad -- or in this case at least tired and utterly predictable -- thinking.