A lot of commentators – particularly in the mass media – have blamed hedge funds for the financial crisis.  But unfortunately, their rhetoric is often very knee-jerk and lacks the necessary detail to actually make their arguments convincing.   So in our yearning for a cogent argument against hedge funds, we were very excited to read this column yesterday by Kiplinger.com contributing columnist Steven Goldberg called “Ban Hedge Funds?”

But alas, Goldberg’s arguments don’t wash.  In fact, they’re so stained with apparent indignation toward hedge funds that we felt a need to document the fallacies and half-truths raised in the piece.  As players in financial markets, hedge funds – like mutual funds, banks, pension funds, and individual investors – are all accomplices to the calamities.  But the cause?  I guess that you can find research to prove anything.  But here’s our take on the arguments raised by Goldberg…

Claim: “Much of the demand for what Warren Buffett years ago termed ‘financial weapons of mass destruction’ came from hedge funds.” More…