Dallas Morning News – There are 200 hedge funds in this area, putting the Dallas area third behind only New York and San Francisco in the number of hedgies. Most have offices in the Crescent, Preston Center and in Plano.

Hedge funds – a kind of mutant mutual fund for the wealthy – have been blamed for much of what ails Western Civilization, but make no mistake, they remain one of Dallas’ most thriving industries that no one ever heard of.

Ed Easterling, senior fellow of the alternative investments center at SMU’s Cox School of Business and a hedge fund manager himself, said the average hedge fund dropped just over 20 percent last year. The total assets in the Dallas funds dropped from a high of about $30 billion to about $20 billion today.

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24/7 Wall St. – Citigroup has gone to the Treasury to beg for bonuses for some of its most important traders, people who make the banks extraordinary amounts of money. The Treasury’s reaction will probably be that it wants to stay out of a fight with Congress and avoid negative public opinion and will turn the request down.

That would be a mistake.

Wall St.’s primary argument for keeping a high level of compensation for its best investment bankers and traders is that, if they leave, overall losses at banks could get worse.  People can be profit centers. The most successful ones help offset the red ink created by the series of poor decisions that big financial firms made about mortgage-backed paper and commercial credit loans. It is easy to assess the value of the best traders by looking at a bank’s books.

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Tags: banks, citigroup, congress, credit loans, financial firms, investment bankers, losses, mistake, money, poor decisions, public-opinion, red ink, s-books, treasury