Whether this Coronavirus known as Covid-19 is the deadly pandemic the alarmists claim or not nearly as bad as the 2009 H1N1 virus, it has shown a bright light on a deadly cancer in our Nation. Last week, we learned about Senators and Congresscritters selling stocks on insider information about Covid-19. This week, we learned about a billionaire hedge fund manager who, allegedly, may have stoked fears about the virus to make billions.

The billionaire is Bill Ackman. According to Business Insider, Mr. Ackman was privileged from birth. He grew up in Chappaqua, New York and graduated from Harvard with his B.A. and M.A. In 2004, he founded the hedge fund, Pershing Square Capital Management. He is most famous for his five year battle against Herbalife and Carl Icahn, which cost him hundreds of millions of dollars.

I had never heard of Bill Ackman until Tucker Carlson went on an epic rant near the end of his Thursday, March 26, show. The Daily Caller gives us the overview:

Fox News host Tucker Carlson ripped hedge-fund billionaire Bill Ackman on Thursday as an “amoral greedhead” for making billions on tanked stocks after downplaying the market on live television.

After a CNBC appearance last Wednesday in which he claimed there was a “tsunami coming” in the markets, Ackman’s company, Pershing Square Capital Management, “turned to credit protection on investment-grade and high-yield bond indexes to bet on an increased risk of corporate default” to turn “a $27 million position into a $2.6 billion windfall as the coronavirus outbreak dragged stocks to multiyear lows and threatened deep economic recession,” Business Insider reported.

Saying Tucker “ripped” Mr. Ackman is mild. The “amoral greedhead” comment was funny. Probably, Tucker Carlson can’t call the billionaire an amoral dickhead. Just what did Ackman do, you ask? Well, first he took to Twitter:

Mr. President, the only answer is to shut down the country for the next 30 days and close the borders. Tell all Americans that you are putting us on an extended Spring Break at home with family. Keep only essential services open. The government pays wages until we reopen.

— Bill Ackman (@BillAckman) March 18, 2020

With exponential compounding, every day we postpone the shutdown costs thousands, and soon hundreds of thousands, and then millions of lives, and destroys the economy.

— Bill Ackman (@BillAckman) March 18, 2020

The line “hundreds of thousands, and then millions of lives, and destroys the economy.” isn’t meant to frighten investors, or anything, right?

Then, he called into the Halftime Report and really laid down the fear factor:

He had a nightmare in January. Exponential compounding on a daily basis? A million Americans are going to die. Assume the virus has a one in 50 chance of killing your child? Hell is coming. Ackman lays it on really, really thick. He warns that Hilton stocks are going to zero. And, that he is buying Hilton stocks. Hmmm? The market went down an additional four percent on March 18.

Just before the tweets and CNBC call in, Pershing Square Capital Management had purchased default swaps as insurance. Credit default swaps are really complicated, but here is the easiest definition from Investopedia:

A CDS contract involves the transfer of the credit risk of municipal bonds, emerging market bonds, mortgage-backed securities (MBS), or corporate debt between two parties. It is similar to insurance because it provides the buyer of the contract, who often owns the underlying credit, with protection against default, a credit rating downgrade, or another negative “credit event.”

The seller of the contract assumes the credit risk that the buyer does not wish to shoulder in exchange for a periodic protection fee similar to an insurance premium, and is obligated to pay only if a negative credit event occurs. It is important to note that the CDS contract is not actually tied to a bond, but instead references it. For this reason, the bond involved in the transaction is called the “reference obligation.” A contract can reference a single credit or multiple credits.

So, the net-net of all this financial mumbo-jumbo is that the billionaire Ackman bought insurance, went on television and talked down stocks and made, swallow hard, an estimated $2.75 billion dollars.

When people like Senators Warren and Sanders rail against billionaires, no one with a brain cares. They are hypocrites, just like all the members of Congress who sold stock on alleged insider information. Most billionaires are not amoral dickheads like Bill Ackman. What he did is probably, perfectly legal. What he did is un-American. What a vulture.

Featured Image: Bill Ackman from Wikimedia Commons.org/Attribution 2.0 Generic (CC BY 2.0)