How Much Is Too Much?

From today's Daily Reckoning:

Today our question is, “How much is too much?”

Many people thought you couldn’t build too many holiday
homes in Spain...just as you couldn’t build too many
hotel rooms in Las Vegas...or pay too much for Chinese
stocks...or pay too much to hedge fund managers...or
have too much money in private equity... or too many
dollars at large in the world financial system.

Since the expression ‘too much’ has been extant in
the English language for a very long time, we assume
it must mean something. What we’ve been waiting...and
waiting...and waiting...to find out is what it means
in financial affairs.

The latest figures show that hedge fund manager Jim
Simons earned $1.7 billion last year. Is that too much?
He takes an unbelievable 5% of his clients’ assets each
year, in payment for his services - plus, an even more
unbelievable, 44% of profit. Is that too much?

Readers will remark that his $6 billion Medallion
fund rose 84% last year (Simons is good with figures).
Investors came out ahead more than 40% even after paying
the outrageous fees.

Or what about Ed Lampert or Kenneth Griffin, each of
whom also earned more than $1 billion last year. Was
that too much? We don’t know. But we came back from our
vacation, opened our eyes, and thought we saw ‘too much’
everywhere we looked.

Money streams into new investment funds. Even Brian
Hunter, who lost $6 billion trading energy for Amaranth,
is starting up a new fund. And John Arnold, formerly of
the Enron energy-trading desk, earned more than $240
million last year - partly by taking the other side of
Hunter’s trades.

Over on the Las Vegas Strip, Goldman Sachs (NYSE:GS) is
buying Carl Icahn’s four casinos...for $1.3 billion. Is
that too much? Again, we don’t know; but when it comes
to excess, what Las Vegas doesn’t already know probably
isn’t worth knowing. The place had a total of 35,000
hotel rooms in the 1970s, which seemed like too many to
us. Now, it has five times as many - 151,000 - which
seems like more than enough.

But ‘too much’ has dropped from the English vocabulary in
Nevada...and perhaps the rest of the world, too. The
Venetian alone is adding 3,200 new rooms. And over at
the old Stardust Casino, the owners judged it too small,
so they blew the place up last month...to build a new
development, Echelon Place, with more than 5,000 rooms. 
Meanwhile, MGM is spending $7 billion putting up the
City Center development - the most expensive development
in Las Vegas history.

Isn’t that a little too much, dear reader?

Who knows? All we know is that throughout the world, a
great boom is on.

On another note, I started my "new grid" in my live account today.