Notes From the Ira Sohn Conference: Everyone Cried

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Photo: Daniel Acker/Bloomberg via Getty Images

Who will cry at the Ira Sohn Conference, the annual gathering of top hedge-fund managers, we asked yesterday, jokingly? In fact, most everyone seemed near tears, including us. To be sure, there were some light moments — gnomish billionaire Sam Zell commissioned a weird little song about Darwinism and how some people here today "won't be around next year" that made everyone laugh, if uncomfortably; brass-balled, adorable David Tepper told everyone "don't listen to all the crap that's out there," cheerfully recommended AIG and a number of financial stocks, and then finished with his own song, which was written on the spur of the moment and made fun of the rest of the presenters: "Since I came to the conference/I became a bit depressed/the end of the world is coming/we're in an awful mess," went the lyrics. For the gloom and doom was everywhere.

Daniel Arbess, of Perella Weinberg Partners, kicked off his presentation, titled "Investing As the Foundation Shifts," with a gloomy slide picturing a city about to fall off a waterfall, dropped the term "Fiat currencies" in the first three minutes, and noted in a voice dripping with disgust that American consumers who think they can "pay off their credit card so they can buy new iPads" (Wait! That's us!) better get their ducks in order because "the end of the buy-now, pay-later era is over." (Oh no!) British historian Niall Ferguson hated on U.S. Treasury bonds and took a dig at his old nemesis ("When I read the term expeditionary economics ... for a brief but blissful moment, I thought it meant sending Paul Krugman to Somalia") and, for good measure, his colleagues at Harvard (some of whom "have been consistently wrong for the past 30 years and still receive a nice salary").

In a presentation titled "Subprime Goes to College," subprime short savant Steve Eisman warned that for-profit colleges may well rip a $300 billion hole in the taxpayer's pocket.

Star speaker David Einhorn ripped ratings agencies Standard & Poor's and McGraw Hill new ones, had some harsh words for the administration ("Politicians value staying in office more than they value doing what's right"), and assured everyone that the next crisis is around the corner, a point that he reiterates in a 2,000-word op-ed in the Times today.

But the darkest moment of the day came during Steve Rattner's presentation, in which the former car czar tentatively attempted to defend the administration's actions to an audience that, safe to say, was not composed of its biggest fans. Pointing to a slide that showed that during this recession, the rich have gotten richer at a higher rate while the poor have gotten poorer, he remarked that income inequality in the U.S was something that must be addressed. "BOOOOOOOOOOOOO," someone shouted from the audience. Rattner paused. "I hope that was a joke," he said.