John Meriwether, the Wile E. Coyote of Hedge Funds

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Photo: Everett Bogue; Photos: AP, Getty Images

Some people really do live a cartoon life. They blow themselves up, and for a second, there they are, all charred and burned. But then in the next frame, they've got a fresh stick of dynamite in their hands and they're good as new. Such is the fanciful tale of John Meriwether, the mad genius behind Long-Term Capital Management, the original hedge-fund disaster story. There are some analysts who now see the 1998 government bailout of LTCM as planting the seeds of our current predicament — the moment when sophisticated financial managers learned that causing systemic risk was something they didn't really have to worry about, because the government would be there to have their backs. Instead of becoming a cautionary tale, the story of LTCM's rescue by deus ex machina spread around Wall Street and caused major banking institutions to pile on leverage, unafraid of the consequences.

Meanwhile, Meriwether himself started another fund, JWM Partners, that fell into the crapper, too. Late last year, its death seemed imminent. But now JWM Partners is back, with a new fund in its hands.

Wow, is all we can say. No wonder they have to pay those big bonuses on Wall Street. Talent is so scarce that people have no choice but to give their money to hedge-fund managers with a proven track record of losing it.

Speaking of leverage, systemic risk, and scarcity of talent, Citadel, the Chicago-based hedge fund run by 40-year-old Ken Griffin, just posted its first monthly gain since June. How'd they do it? "Wagers in stocks, macro and convertible-arbitrage strategies" — in other words, the usual flimflam. The 4.75 percent return by its flagship funds, if sustained through the entire year — which would be effing incredible — would earn them back two-thirds of what they blew last year. Best of luck, guys, at getting your heads above water!