Hillary's assets

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During last month's debate among Democratic presidential candidates, NBC's Brian Williams, the moderator, asked Hillary Clinton, "How is America a better place because of all these burgeoning hedge funds?" He was referring to the loosely regulated investment vehicles that frequently generate massive returns for their wealthy investors by using debt to leverage huge bets on movements in the commodity futures market and many other financial arenas. Considering her extraordinary success during 1978 and 1979, when, as a novice trader, she turned a $1,000 investment into a $100,000 profit in the highly risky cattle-futures market, Mrs. Clinton was the right person to ask about hedge funds.

Today, hedge funds make up a supersized version of the speculative markets where Mrs. Clinton toiled well before the onset of the 1980s "decade of greed." Indeed, her $100,000 profit, equivalent to nearly $300,000 today, was about four times the salary her husband earned as Arkansas attorney general. Nevertheless, in May 1993, nearly a year before the public learned of Mrs. Clinton's success in cattle futures, she self-righteously declared during her commencement address at the University of Michigan: "Throughout the 1980s, we heard too much about individual gain, about the ethos of selfishness and greed."

In responding to Mr. Williams' question at the debate, Mrs. Clinton was right to say that "America is a great place because we have an entrepreneurial economy." Then she added, "• ne of the other reasons we're a great country is because we've learned over the years how to regulate that so nobody gets an unfair advantage." This, from the politician whose cattle-futures score was clouded by all sorts of circumstances screaming "unfair advantage." For example, in a market where 75 percent of participants, experienced and inexperienced alike, generally lose money and where brokers have the ability to "allocate" the winnings among their customers, the Wall Street Journal reported that Mrs. Clinton's commodities broker was disciplined for questionable trading practices before and after executing her extraordinarily profitable trades.

Mrs. Clinton initially explained her success by claiming to have done all her own research studying the Wall Street Journal. Then she admitted that Jim Blair, the outside counsel for Tyson Foods, advised her and placed most of her trades. Mr. Blair helped her open her trading account in mid-October 1978. That was three weeks before her husband rode to certain victory (63 percent of the vote) in his race for Arkansas governor, a position from which he would enforce the state's environmental policies affecting chicken waste and appoint numerous regulatory officials overseeing Tyson.

The odds of a retail trader executing the intraday transactions that generated a 530 percent overnight return, which Mrs. Clinton achieved on her first day, "are about the same as [the odds] of finding the Dead Sea Scrolls on the steps of the State House in Little Rock," according to estimates by Wall Street Journal financial columnist Caroline Baum and commodities speculator Victor Niederhoffer in their devastating account (Feb. 20, 1995; National Review) of Mrs. Clinton's trading activity.