From John Murrell via Karen Myers.

Results.

Hat tip to MeaninglessHotAir.

The Securities and Exchange Commission has redefined what it means to be rich.

In looking for ways to better regulate hedge funds and other “private money” pools, the SEC in December proposed raising the net-worth requirement for people who are eligible to invest in the funds. Since the SEC has always taken a light regulatory approach to hedge funds, assuming they’re for rich people who can take care of themselves, the SEC’s definition of a hedge-fund investor has often been used a proxy for the government’s definition of “rich.”

And being rich today, it turns out, requires more than twice as much money as it did in the 1980s.

The SEC proposal says investors need to have investible assets of at least $2.5 million,excluding equity in any homes or businesses, to be eligible to sign on a hedge fund’s dotted line. That’s a huge jump from the current requirement, which says individuals have to have a net worth of at least $1 million, including the value of primary residences, or an annual income of $200,000 for the previous two years for individuals or $300,000 for couples.

The SEC says it’s just trying to keep up with inflation and the explosion in the number of millionaires in the U.S. The $1 million threshold was set in 1982, long before the stock-market boom of the 1990s and real-estate run-up of the past five years. The agency says so many people are now worth $1 million that they may not be financially savvy enough to understand the risks of investing in hedge funds.

According to the latest data from the Federal Reserve Surveys of Consumer Finance, households worth $1 million or more (including the value of their homes) represented more than 8% of total U.S. households in 2004. The new definition of rich would apply to only about 1% of the population, the SEC says.

Read the whole thing.

John Markham, in his column in MSN Money today, IMHO, hit the Buffet nail right on the head.

Oh, lords of the market, let this be the last straw. The last paean from the pious. The last time we must see simpering reporters, Rotarians and retirees blow kisses to a man once celebrated as the Oracle of Omaha but now best described as the Natterer of Nebraska.Surely there was a time when Warren Buffett was a chief executive worth studying, and even investing alongside. But it sure seems like that time is long past, particularly in contrast to a couple of similar, but much better, conglomerateurs that I’ll introduce you to in a moment…

..Buffett released the fiscal 2005 earnings report of his holding company, Berkshire Hathaway (BRK.A), on Saturday, as well as an annual report and 22-page chairman’s letter.

And when you get past all the juvenile humor, unseemly criticism of rivals, self-promotion and homilies, you are left with one impression: This is one heck of a way to disguise the fact that—outside of an accounting gain—earnings were down 29% in 2005. And that shares turned in a fifth-straight year of underwhelming performance in the only metric that investors truly care about: the advance of the price.

Did I say the stock price is all that matters? Gosh, that seems so craven. I am so sorry to bring it up. But that is what investors are paying him for, isn’t it? To boost earnings in a way that encourages new buyers to be more aggressive than sellers, making the price go up?

That is why we buy most stocks. But Berkshire Hathaway is more a cult than a security.

Just read the 2005 report, and you will see that it is largely filled with boasts that the chairman has goosed book value by slapping together an insurance, retail, media and construction conglomerate that looks more like something the cat dragged in than a streamlined earnings machine.