Fooling Some of the People All of the Time: A Long Short Story

This clown Einhorn is a self-serving Jackass. He gets his head handed to him and his investors and instead of crawling off into the weeds with the rest of the snakes he makes this thinly veiled attempt at vindication. Maybe after he's paid $100 bucks per share in dividends on this short position he'll move on. If you compare Einhorn's value to a robust economic environment to ALD's, you'll find it sadly lacking. The guy is a parasite with a guilded tongue.

First I read When Genius Failed which was about the rise and fall of Long-Term Capital Management - a hedge fund. Then I read a book about the scandalous rise and fall of Enron called The Smartest Guys in the Room. And now I have just finished this book about a business development company (BDC) call Allied Capital. This was just not any BDC, but the second largest in the country.

The things I have read in this book are truly incredible. Many times I just had to shake my head in disbelief. This is a book about a company that made, and continues to make it appears, unscrupulous loans to businesses, if that's what you can call some of the entities they loaned money to. This book details the corruption that took place in this business and its controlled company BLX. We also learn about the inaction at the Small Business Administration (SBA), and USDA loan program in the light of serious problems with the loans they backed. What is really sad about this is the hundreds of millions of dollars that these government organizations paid out, and when their reserves are exhausted, tax payer money foots the bill.

It appears that David Einhorn has spent considerable time, effort and money to bring this information to the appropriate authorities, but the result reminds me of the title of Part Three of the book: "Would Somebody, Anybody, Wake Up?" As the book's jacket cover stated, "This revealing book shows the failings of Wall Street: its investment banks, analysts, journalists, and especially our government regulators."

It was a very interesting read, and I would recommend the book.

If, like me, you read this book because you know about Einhorn's record, you will probably find the beginning parts about the founding of Greenlight and some of their successes most interesting. Not because it offers any particularly useful insight, just because it's a peek inside a successful fund.

The middle part of the book drags, because detailing the various accounting 'techniques' Allied uses, while necessary for completeness, gets repetitive. The last third of the book grabs your attention again when it takes its turn for the most appalling, with revelations about the endemic corruption at: the SEC, media, SBA, DOJ, Congress, Wall St, [insert your choice]. Allied's stock option conversion program was a nice finishing touch.

Sadly, I find it laughable that a hedge fund manager and 18th-in-the-world ranked poker player could be as naive as Einhorn presents himself in this book. His conclusions about the govt are vastly beyond the comprehension of the average human, and in many ways this confession has meant nothing. How many other little know three letter agencies are out there wasting taxpayer money? How many more will be launched in 2009?

Real eye opener...makes you question the value of your IRA / 401 K nest egg

Jim T.

Fooling Some of the People All of the Time takes one on a remarkable journey through the failures of some of the financial institutions we rely upon. This is a wakeup call that now is the time to rejuvenate these agencies. While Enron spurred new laws, it turns out that enforcement of existing laws may be of greater significance. This book is both enjoyable and a must-read for all long and short investors. This is a great ride, and the story is not yet complete.