Last week, 50-year-old hedge fund billionaire Ken Griffin set a record by making a deal to pay $238 million for a new home — an ultra-luxury apartment at the top of 79-story 220 Central Park South in New York City, as Inquisitr reported — which was only the latest in Griffin’s mind-boggling real estate shipping spree.
Griffin has also, over the past few years, paid $60 million for a Miami home — also a record, according to the New York Times — and $58.75 million for a Chicago penthouse apartment, another local record, to go with a whopping $122 million mansion in London, England, as reported by CNBC.
But as journalist Judd Legum noted in his online newsletter Popular Information, Griffin “couldn’t have done it without you,” the United States taxpayer.
Griffin, who has a current net worth of $9.9 billion according to Forbes, founded the hedge fund that made him his billions, Citadel, in 1990 after getting started in stock trading while still an undergrad at Harvard University in 1987.
But as the United States and world economy spiraled toward collapse in 2008, Griffin’s Citadel was bleeding cash, losing Griffin’s clients a total of $8 billion in 2008 alone, according to a Business Insider report, taking a 55 percent loss that Griffin described as “incredibly humiliating.”
But Griffin was apparently not humiliated enough to turn down at least $200 million in taxpayer bailout cash, funds funneled to Citadel through the federal bailout of insurance giant AIG. The insurance company had lost billions, as BI explained, lending securities to short sellers — securities it, in turn, had borrowed from other financial firms, including Griffin’s Citadel.
“Short selling” is a form of financial trading in which the trader bets not that a stock will go up in value, but that it will go down, as Investopedia explains. The short seller has typically paid a fee to a lender, such as AIG, to “borrow” the stock that will be shorted.
But as AIG stood on the verge of collapse in 2008 due to the massive failure of its high-risk trading practices, its creditors —including Citadel — were in danger of receiving nothing in repayment from the “too big to fail” firm — until the government stepped in with billions in bailout funds to keep AIG and its creditors in business. Griffin’s Citadel received about $200 million of those taxpayer dollars, according to BI, cash it used to stay in business itself.
“Griffin’s swift journey from a corporate welfare recipient to a record-smashing home buyer is a stark example of the dysfunction of the American economic system,” Legum wrote. “People like Griffin, who is now worth over $9 billion, are protected from economic disruption. Those who are not part of the economic elite, meanwhile, are left to fend for themselves.”