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I actually have a little first hand information about this.

My mother (CPA) had a client (older man passed last year) who was invested in this fund for years.

She says that it was a very strange fund. The end of year documents were literally hand written 1099s with a printout of buy/sells. The worst part for her was that they sales didn’t have the cost basis included. At some point she told the client, it just isn’t worth the aggravation.

So they found a 3rd party who specialized in creating the reports necessary for doing tax returns specifically for this fund.

Anyway, she always thought it was strange that the accounting materials didn’t conform to normal trading reports. She even questioned the legitimacy of the fund.

Here is the kicker though. The fund didn’t report ridiculous returns. She remembers it as 12-14%. Also, she thinks most, if not all, of the “trades” were treasury bonds. The returns were plausible.

Anyway, my parents live in Palm Beach and know that a lot of the limousine libs they know are personally hurt. Someone I know, who is a born into wealth Obama nut told us last night her family may have lost everything.

Personally, I expect a bailout. It sounds stupid, but it wasn’t just individuals who invested in this thing. It was colleges, other funds, hospitals, etc. The downstream impact is going to hit a lot more people than some wealthy left-wing nuts.

I want to be clear that I don’t want a bailout. But, I would bet one will happen. ‘Tis the season.