America faces a “crisis of leadership” that is damaging the country’s recovery, one of Wall Street’s leading hedge fund managers has warned in a scathing attack on President Barack Obama.
Daniel Loeb, the founder of the $3.3bn (£2.1bn) Third Point fund, said that the administration’s policies appear intent on “redistribution rather than growth”, and should send a chill through those who believe in free markets.
In the letter to investors, Mr Loeb pinpoints the “politically-laced” lawsuit brought by regulator the Securities and Exchange Commission against Goldman Sachs in April as the moment that investors began to lose confidence.
The criticism underlines the fear some on Wall Street have about the Obama administration’s intentions toward a financial services industry still bearing the brunt of Americans’ anger over the crisis.
Steve Schwarzman, the billionaire founder of private equity firm Blackstone, last month likened the president’s plans to levy taxes on the private equity industry as being akin to Adolf Hitler’s invasion of Poland.
The tension between the White House and Wall Street, analysts say, is likely to increase in the weeks before the critical mid-term elections for Congress in November.
Mr Loeb, who has an reputation for being outspoken and is seen as a pioneer of activist investing, added that “so long as our leaders tell us that we must trust [them] to regulate and redistribute our way back to prosperity, we will not break out of this economic quagmire.”
Despite the recovery in the fortunes of many banks, the administration is faced with a slowing recovery and more than 7m people who have lost their jobs since the crisis began.
