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A Brief Introduction from Eric Fry...

The last time I saw Daniel Loeb, I was riding in his private jet from Miami to New Jersey. Danny is a fascinating guy - a California surf rat turned New York hedge fund manager.

In other words, he's not your run-of-the-mill financial type. He came into the business through the backdoor and succeeded on the strength of his talents, wits and determination. He manages $3.4 billion in his hedge fund named Third Point Partners L.P. (For those folks who do not surf or who have never visited the beaches of Southern California, "Third Point" is the most distant of the three main surf breaks in Malibu).

Danny has done very well for himself, but only because he has done very well for his clients. Making money is all his clients really care about. But how he makes money is all that any of the rest of us really cares about. Danny is an "activist investor," which means that he attempts to influence the results of his investments, rather than passively buying shares of a given stock and hoping for the best.

Often, the actions of this activist investor upset the status quo - annoying those who happen to reside in the crosshairs of his activism. Thus, for example, when Danny found fault with the CEO of Star Gas Partners a few years back, he made his thoughts public...very public. Danny wrote:

"What is your favorite government agency, and why?"

"What are the two largest holdings in your own personal wealth?"

"What is your trade of the new decade [best long and short idea for the next ten years]?"

"Where will the Dow and gold be a year from now...and what is your favorite chilled beverage?"

The questions came on thick and fast at last night's "rough and tumble" Whiskey Bar Debate here in Vancouver. If you've attended our little shindig before, you'll know what it's all about. If you haven't yet partaken in the feistiest chapter of our annual symposium, we basically get our most outspoken, controversial contrarians liquored-up and hit them with a slew of attendee-penned questions.

Here's a taste of what went down when the Trade of the (New) Decade question popped up, as relayed by our mates over at The 5-Minute Forecast:

Excerpted from his presentation to the Ira Sohn Investment Research Conference on May 26, 2010

We should have learned by now that every credit – no matter how unthinkable its failure would be – has risk and requires capital. Just as trivial capital charges encouraged lenders and borrowers to overdo it with AAA rated CDOs, the same flawed structure in the government debt market encourages and therefore practically ensures a repeat of this behavior – leading to an even larger crisis. (Greenlight continues to hold short positions in the common stock of the rating agencies, Moody’s and McGraw Hill [owners of S&P]).

I remember hearing that the rating agencies would never downgrade MBIA or Fannie Mae…I don’t believe a US debt default is inevitable. On the other hand, I don’t see the political will to make voluntary efforts to steer the country away from crisis. If we wait until the markets force action, as they have in Greece, we might find ourselves negotiating austerity programs with foreign creditors.