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Check out this video of an interview with Jim Cramer:
“What’s important when you’re in that hedge fund mode is to not do anything remotely truthful, because the truth is so against your view, that it’s important to create a new truth to develop a fiction.”
He blatantly discusses how hedge fund managers will make up news about companies in order to move the market to make their positions profitable. ie: if they are short shares of company X, they will call all kinds of people and tell them made-up negative news about X, to move the stock price down so they can cover their short and be profitable.
What I don’t get is how some teenager got thrown in jail a few years ago for going on message boards and making up news to move a stock, but these hedge fund managers can call real news organizations, plant completely false stories to move the market, and that’s all OK.
He makes it sound as if all hedge funds do this. I’d never been completely clear why the government wanted to regulate hedge funds. Is this why?