Clinton friend benefits from mortgage and bankruptcy crisis

What does Chelsea do when she is not on the campaign trail? She holds a $200,000 a year job at Avenue Capital Group, a hedge fund that is positioning itself to make billions in the home mortgage security business and the debt of bankrupt companies. The investment firm of Morgan Stanley will also reap benefits. Stanley recently bought a 20 percent share of Avenue Capital Group. The firm is headed by Marc Lasry and his sister Sonia Gardner.

A native of Marrakesh, Morocco Lasry has accumulated one of the largest pools of capital devoted to bankruptcy investing. It was recently estimated that he controls assets of $42 billion; the Avenue Capital Group (ACG) is the 25^th ranking hedge fund in the United States.

It has reported giving approximately $100,000 to Clinton’s presidential campaign and other Democratic affiliated groups. Of course contributions by the firm to the Clinton Library or Foundation are unknown due to former-President Clinton’s failure to disclose. In 2007, according to the Center for Responsive Politics hedge fund lobbying expenditures amounted to $6.5 million.

Recently firms like Morgan-Stanley and Avenue Capital have made substantial investment s in mortgage bonds in expectation that Senator Clinton will undoubtedly attempt to propose legislation to end the mortgage crisis. While these reforms will cause relief for middle class homeowners such legislation will mean a huge financial boon for Lasry as mortgage bond prices stabilize.

Rather than hedge and investment firms reaping the rewards of this taxpayer funded bailout mortgage bond price increases could be added to the foreclosure fund to increase the number of homeowners that receive relief.

So as companies go bankrupt and laid-off American workers crowd unemployment lines, while predatory lenders force middle class homeowners into foreclosure there are Friends of Billary who reap large profits off the backs of the middle class. A part of bankruptcy restructuring is of course cutting labor costs. Where will these jobs go? Restructuring may also mean a raid on pension funds and the lessening of other benefits as related to health care for example.

We could be assured that Mr. Lasry would like to see some “necessary” reforms in bankruptcy law as well. Lasry was recently appointed to a U. S. Treasury “ private sector committee” to foster dialogue on hedge funds and offer recommendations on best practices, according to a Treasury press release.