Avast! Hedge-fund Pirate Bill Ackman Sets His Sights on Big Banks


Bill Ackman, the notoriously arrogant manager of hedge fund Pershing Square, has said several times he's been "humbled" by his woefully miscalculated bet on Target's real-estate holdings. He says it again to the Times today. "I was full of myself years ago, and experience has humbled me." Then he proceeded to describe his new project.

He is already training his sights elsewhere: at the nation's troubled banking industry. He is betting that the share prices of big banks will decline, and hoping to give them a little push.

In an interview, Mr. Ackman argued that banks like Citigroup and Bank of America are effectively insolvent, a view some economists share, but the banks vigorously deny. He plans to begin a media blitz urging banks'; bondholders to exchange their debt for equity in order to shore up the institutions. Such a move would, in all likelihood, sink banking shares, profiting Mr. Ackman.

Yes, only a truly humble man would set his sights on taking on the banks that are backed up by the full force of the U.S. government.

With all due respect to a certain colleague who thinks Ackman is brilliant and dreamy, this is just gross. Is he right about the banks' insolvency? Probably. Do the rules of financial Darwinism indicate that these institutions should die? Probably. Is this even a kind of brave and swashbuckling move? Totally, and we give him props for that. But all the same, we can't help hoping that Ackman's attempt to hijack these big, dumb, defenseless ships goes down like the Somali pirates, and dude gets taken down by the good old USA.

A Fund Manager Wins, and Moves On [NYT]