The Problem that The Economist wants to talk about? Public Outrage a.k.a. Populism.
The other less important problem that a magazine called The Economist might want to address, but which it doesn't want to talk
about: the economy is bust, and why.
Typical scenario for the last 18 years:
January - Private Equity Investor (PEI) has 20 million. He uses it a security to borrow 200 mio from Bank1 to buy a
company Widgets. Widgets is a solid manufacturing business with assets of land, factories, patents, a brand, good will and no
debts.
March - Widgets borrows 300 million from Bank2 – no problems, its a solid business – but here comes the bit where
it all goes criminal, but not illegal... Widgets pays out 300 million to PEI its owner as a dividend, who repays 200 to
Bank1. PEI now has 100 million cash, and has done nothing for it. Widgets however has to pay 20 million in interest per year.
PEI now has 100 million.
July - Widgets also sells its assets: land, patents and so on and leases them back for 30 million a year. The sales
bring 200 million which Widgets also pays out to PEI its owner. PEI now has 300 million.
August - Widgets Pension Fund is 'restructured' bringing a liquid 150 million onto the balance sheet. Widgets has liabilities
to its pensioners with little to back them. 150 million is paid out to PEI as a special dividend., PEI now has 450 million.
December - PEI sells the business to a pension fund, for 100 million, less than he paid as it has a lot of debt, but
it is a good business. PEI now has 550
Recap: Widgets now has 300 million debt causing 20 million a year in interest, plus 30 million in leasing payments.
It has pension liabilities and the pension fund is almost worthless. PEI had 20 million at the start of the year and now has 550
million. But the business is still viable, as Widgets can meet its payments.
5 years later - Sadly hard times come. Turnover drops, prices drop, costs are cut, people lose their jobs, including
engineers, managers, the shop floor and the sales team who did real work for years, created real value, invented the patents,
built the brand. It doesn't help. The company has no stores of fat - it goes bust. The banks loans are sour. People lose their
jobs, the pensioners cannot be paid.
This happens 100 times so the banks are bust too, but get bailed out by the taxpayer (that's those guys who lost their jobs and
pensions at Widgets)
PEI lives happily in The Bahamas with the 550 million which he 'earned' in a fabulous year of 'value creation' made possible
by the power of free and light touch regulated markets.
Sadly, due to the complexity of all this the bright chaps at The Economist can not quite see why this is a slightly problematic
way to run an economy... Honi suit qui mal y pense.
And if you are wondering whether firms like hedge funds and private equity funds -- significant parts of the "shadow" banking system
-- add real value to the economy, you might enjoy this article by Harlan Platt about private equity, The Private Equity Myth.
Download Platt. The Private Equity Myth.
The juggernaut of Kohlberg Kravis Roberts & Co. began rolling in 1976 when Jerome Kohlberg and cousins Henry Kravis and George Roberts
left Bear, Stearns with about $120,000 to spend. The three invented and dominated the leveraged buyout as they sought investors and
borrowed money to acquire Fortune 500 companies in dizzying succession.
Time after time, the KKR men presented a tempting offer. The CEO could cash out his company's existing shareholders by agreeing
to sell the company to a new group that would be headed by KKR, but would include a lot of room for existing management. The
new ownership group would take on a lot of debt, but aim to pay it off quickly. If this buyout worked out as planned, the KKR men hinted,
the new owners could earn five times their money over the next five years. Presented with such a choice in the frenzied takeover climate
of the 1980s, manages and corporate directors again and again said yes… To top management a leveraged buyout was the most palatable
way to ride out the merger-and-acquisition craze."
They put up very little money of their own funds, but their partnerships made out like bandits. Consider the case of Owens-Illinois:
KKR pup up only 4.7 percent of the purchase price. The company's chairman earned $10 million within a few years, the takeover advisors
got $60 million, Owens-Illinois was left "gaunt and scaled back," and about five years later, KKR took it public at $11 a share, more
than twice what the KKR partnership had paid for it.
Discussing the $26.4 billion buyout of RJR Nabisco Inc., ``Anders goes beyond what has been previously published,'' Bianco wrote,
with his convincing assertion that RJR's post-deal crises pushed KKR close to ruin. Leveraged buyouts in general Anders terms ``one
of the most profoundly undemocratic ventures the United States had ever seen.'' Their only lasting impact, he says, was to shift
wealth from the mass of corporate employees to a managerial elite allied with Wall Street.
"For the first fourteen years of KKR's existence, the buyout firm's hallmark could be expressed in one word: debt…
As KKR grew evermore powerful, Kravis and Roberts derived their economic clout from a single fact: They could borrow more money, faster,
than anyone else," according to the chronicler of this high-flying firm. KKR acquired $60 billion worth of companies in wildly different
industries in the 1980s: Safeway Stores, Duracell, Motel 6, Stop & Shop, Avis, Tropicana, and Playtex. They made piles of money
by deducting interest expenditures from their taxes, cutting costs in their new companies and riding a long-running bull market.
This behind-the-scene accounts shows the ambition, pride, envy and fear that characterized the debt mania largely engineered by KKR,
a mania that put millions out of work and made a very few very rich.
Patients receiving emergency medical care would no longer get surprise medical bills from providers outside their insurance network
under a rule issued Thursday by the Biden administration.
The long-awaited rule is the first to follow the so-called No Surprises Act, passed in December 2020 by Congress that sought
to protect patients from receiving significant medical bills when they are unwittingly treated by an out-of-network doctor, lab,
or other type of provider.
The rule seeks to implement key parts of the legislation protecting patients from being billed by out-of-network doctors who provide
treatment at in-network hospitals, as well as protecting them from surprise bills for both emergency and nonemergency care. The
interim final rule will
undergo 60 days of public comment and largely go into effect on Jan. 1, 2022, when the law takes effect.
"No patient should forgo care for fear of surprise billing," said Health and Human Services Secretary Xavier Becerra in a statement.
"Health insurance should offer patients peace of mind that they won't be saddled with unexpected costs."
Congress and policy makers
have sought to tackle surprise medical bills because patients are paying more out-of-pocket for their care, and many out-of-network
charges can occur when patients are unaware that they are being treated by a provider who isn't covered by their health insurance.
Out-of-network charges have added to medical debt and rising out-of-pocket payments for consumers: An April 2021 study in the
journal Health Affairs found that patients receiving a surprise out-of-network bill for emergency physician care paid more than 10
times as much as in-network emergency patients paid out-of-pocket .
The interim final rule is expansive. Emergency services, regardless of where they are provided, would have to be billed at lower,
in-network rates without requirements for prior authorization.
The rule also bans higher out-of-network cost-sharing, such as copayments, from patients for treatment they receive either
in an emergency or nonemergency situation. Under the rule, any coinsurance or deductible can't be higher than if such services were
provided by an in-network doctor.
The interim final rule also stipulates that patients can't be charged out-of-network for "ancillary" care, which can happen when
an out-of-network anesthesiologist or assistant surgeon provides treatment at an in-network hospital.
Regulations that will be released at a later time will implement a procedural process so medical providers and insurers can arbitrate
out-of-network payment disputes, a solution that was so contentious it threatened to scuttle passage of the No Surprises Act. Insurers
raised concerns that arbitration could put them at a disadvantage and instead favored linking out-of-network reimbursement to a benchmark
rate.
The legislative fight over the No Surprises Act that spurred the interim rule was contentious. The American Medical Association
and some state medical associations worried it could financially hurt small physician practices that were still reeling from the
pandemic. The American Hospital Association supported the arbitration provision but raised concerns about the possibility for uneven
enforcement of the law.
The bill will lead to "dangerous, unintended consequences, right in the middle of a surging pandemic," according to a Dec. 15,
2020, letter to then-Senate Majority Leader Mitch McConnell (R., Ky.) from conservative groups such as Action for Health.
Cost-sharing includes deductibles, copayments paid at the time of treatment, and coinsurance, which is the percentage of a bill
that consumers pay that isn't covered by insurance. Patients are paying increasingly more for their own care because cost-sharing
has increased over time, research shows. Most workers also face additional cost-sharing for a hospital admission or outpatient surgery.
Sixty-five percent of workers with employer-sponsored coverage have coinsurance and 13% have a copayment for hospital admissions,
according to a 2020 survey by the Kaiser Family Foundation.
Out-of-network charges from anesthesiologists, pathologists, radiologists and assistant surgeons increase spending by $40 billion
annually, according to researchers at the Yale School of Public Health.
Congress in its legislation sought to protect patients from unknowingly receiving care from an out-of-network provider. To that
end, the rule bans other out-of-network charges without advance notice.
The regulations issued Thursday will take effect for healthcare providers and facilities Jan. 1, 2022. For group health plans,
health-insurance issuers and Federal Employees Health Benefits program carriers, the provisions will take effect for plan, policy
or contract years beginning on or after Jan. 1, 2022.
Please not that stent insertion is often unnecessary procedure performed not to save the life of the patient but to earn money.
The system is criminal indeed.
Non-profits hospitals those day are also governed by Wall-street sharks.
Please note that Abdominal CT scan with insurance like CIGNA would cost you $300-$600 out of the pocket depending on the
facility.
Notable quotes:
"... abdominal and pelvic scan at Avera St. Luke's cost $6,422, the highest out of a wide range of rates the Avera hospital charges for that service ..."
"... Some dominant local and regional nonprofits, including Mass General Brigham, based in Boston, and Avera, based in Sioux Falls, S.D., billed the uninsured at their general hospitals some of their highest prices while also setting some of the most restrictive financial-aid policies for free care nationwide, according to tax filings, Turquoise data and patients' medical bills. ..."
"... "It's really criminal, the mess that our current system is in," said Mary Daniel, chief executive of ClaimMedic, which helps patients negotiate payment with hospitals. "It is a deliberate attempt for these hospitals to gouge the uninsured." ..."
"... for expensive procedures like angioplasty and drug-coated stenting, the difference in the cash price within a single county can be over $100,000. ..."
"... The cash prices for patients who must pay for their own care can be equal to the sticker prices or sometimes represent a percentage lopped off that top rate. Sometimes, those cash rates are also applied to people who have some form of insurance but get a service that the insurance doesn't cover. ..."
"... The quarter of hospitals with the most generous free-care policies write off the entire bill for those with monthly incomes under about $2,600 a month, and even up to roughly $6,400 a month, for a one-person household, the Journal found. ..."
"... Those that rank in the quarter of hospitals with the most-restrictive policies draw the line at or below about 160% of the federal threshold for poverty, disqualifying for free care patients with monthly income of more than around $1,700 for a one-person household, according to a Journal analysis of nonprofit hospital tax filings. ..."
"... A patient paying cash at the hospital for the stenting procedure is charged $84,792. Local insurer Fallon Health spends $36,755 for the procedure under one of its health-maintenance organization plans. A Medicare insurance plan from Aetna, part of CVS Health Corp. , pays $16,648. ..."
"... Patients who don't qualify for financial aid at nonprofit hospitals also aren't protected by pricing limits under federal law. The Affordable Care Act requires nonprofit hospitals to cap prices for patients who qualify for financial aid. ..."
"... Hospitals apply financial aid and discount policies inconsistently, say consumer advocates and patients. Offers may be one-time-only, or discounts may emerge only when a skilled negotiator is pushing for them. ..."
"... In January 2018, Joannie Berthiaume spent two days at Broward Health Imperial Point hospital in Fort Lauderdale, Fla., and got emergency surgery to remove her appendix. She was uninsured and the hospital charged Ms. Berthiaume its highest prices. Her bill totaled about $42,000, including a $6,033 abdominal CT scan. For that same scan, an Aetna subsidiary gets a 24% break, according to the newly public data from Broward Health. That discount would have meant a fee of around $4,600 for the scan, based on the price charged in 2018. ..."
"... "If you charge me $42,000 and your costs are justified, how can you knock it in half in a matter of minutes," Ms. Berthiaume says. "You must be overcharging." ..."
"... High cash prices inflate bills that uninsured patients often struggle to pay. Hospitals collected 5% of the amount they billed uninsured patients before writing off bills after a year of seeking payment, according to Crowe LLP, an accounting, technology and consulting firm, based on an analysis of 600 client hospitals. That is compared with collecting 40% of bills sent to patients with insurance for amounts owed under deductibles, copays and other out-of-pocket costs, based on a separate analysis by Crowe of about 1,500 hospitals. ..."
"... Hospitals closely track their "payer mix," or the mix of patients with commercial insurance, Medicare, Medicaid and the uninsured, who might be unlikely to ever pay for their treatment. That could play a role in how hospitals set prices. ..."
"... Resolve also offered about $8,000, or slightly more than the company estimated Medicare would pay, for Mr. Macias's $24,800 emergency-room bill at Avera St. Luke's, Mr. Pan said. The hospital said no, and despite denying financial aid, offered to reduce the bill by 50%, Mr. Pan said. The amount excluded another $34,994 he owes Avera's heart hospital. ..."
"... Have you or someone you know faced a challenging hospital billing situation? Tell us about your experience in the form below. ..."
The 32-year-old's abdominal and pelvic scan at Avera St. Luke's cost $6,422, the highest out of a wide range of rates the Avera
hospital charges for that service based on the new data. The price billed to Mr. Macias was roughly three times the best deal negotiated
by an insurance company.
Another scan of his chest came to $4,194, approximately $280 to $2,800 more than any prices negotiated between St. Luke's and
an insurer. The prices for identical scans performed at Avera's heart hospital were also among the highest that the hospital charged. His total hospital bills came to $59,800.
... ... ...
Services including emergency-room visits, imaging scans and procedures such as an angioplasty and stenting often performed on
heart-attack patients have been identified by researchers and federal data as commonly needed in emergencies by those without insurance.
The Journal analysis looked at the 1,550 hospitals in the Turquoise data that released both insurance and cash-payment rates.
Among the Journal's findings:
Hospitals routinely bill uninsured patients at their highest rates. About 21%, or 319, of the hospitals did so for the majority
of the services included in the analysis. At 171 of those hospitals, the cash rate was higher than all of the rates billed to
insurers, or tied for the highest rate, for every service in the analysis. That was true at some hospitals owned by major systems
including Sanford Health and Yale New Haven Health System.
On average, across the 1,166 hospitals that included rates for Medicare Advantage plans in their disclosures, the fees for
uninsured patients were 3.6 times the average rates paid by the Medicare Advantage plans. Medicare rates are typically set by
the government to at least cover hospital costs and are considered a baseline for comparing prices. Rates for Medicare Advantage
plans, which are administered by private insurers, are generally close to these mandated prices.
Some dominant local and regional nonprofits, including Mass General Brigham, based in Boston, and Avera, based in Sioux
Falls, S.D., billed the uninsured at their general hospitals some of their highest prices while also setting some of the most
restrictive financial-aid policies for free care nationwide, according to tax filings, Turquoise data and patients' medical bills.
Cash prices, which haven't been available publicly to help patients choose where to seek medical care, often vary widely even
among hospitals in the same county. In the 270 counties where at least two hospitals have disclosed their cash prices, the average
spread between the lowest and highest rates for a complex emergency-room visit is $1,852.
In Shelby County, Tenn., home to Memphis, the spread for that type of ER visit is $2,054. It would cost an uninsured patient $884
at any of the three Baptist Memorial Health Care hospitals; $1,480 at Regional Medical Center; $2,653 at Saint Francis Hospital-Memphis;
and $2,938 at Saint Francis Hospital-Bartlett.
... ... ...
Hospitals that offer additional discounts for the uninsured don't always automatically make the cuts to patient bills, leaving
cash-pay patients with significantly higher charges, the Journal found. It can take long negotiations, often by hiring lawyers or
professional advocates, to bring about reduced charges.
... ... ...
Those discounts slash bills by an average of 85% off its top price, the company said in a recent statement to the Journal. But
patients must apply to receive the discount. The vast majority of cash prices for emergency services at Tenet hospitals reviewed
by the Journal instead reduced bills by 20% to 30%.
"It's really criminal, the mess that our current system is in," said Mary Daniel, chief executive of ClaimMedic, which
helps patients negotiate payment with hospitals. "It is a deliberate attempt for these hospitals to gouge the uninsured."
The differences between the prices for uninsured people and insurance companies can be wide.
At Ephraim McDowell Regional Medical Center in Danville, Ky., an uninsured person getting a stent after a heart attack could be
billed around $66,226 for the procedure. An Anthem Inc.
health-maintenance organization plan would pay just $17,895 at the hospital, and the insurer's Medicare plan even less -- $12,445.
Ephraim McDowell Health said the cash prices are the highest rates but that it offers discounts and bill forgiveness for those
who qualify for financial assistance. In a written statement, the hospital system said, "it is rare that an uninsured patient would
pay the total gross charge amount due to the variety of financial assistance programs available."
Eligibility under the program cuts off at three times the federal poverty level, according to the hospital system, which is an
annual income of $38,640 for a single person.
Prices typically haven't been publicly available before now. Yet for expensive procedures like angioplasty
and drug-coated stenting, the difference in the cash price within a single county can be over $100,000.
The reasons for high cash prices are complex and, even to many healthcare experts, baffling.
Hospitals typically have a sticker price, often called the "chargemaster" price, that can be the starting point for negotiations
with insurers. Discounts off that sticker price tend to be steeper for those that bring large volumes of patients. Insurance plans
offered under government programs like Medicare and Medicaid get even lower rates, tied to prices mandated by federal and state agencies.
The cash prices for patients who must pay for their own care can be equal to the sticker prices or sometimes represent a percentage
lopped off that top rate. Sometimes, those cash rates are also applied to people who have some form of insurance but get a service
that the insurance doesn't cover.
Will Fox, who advises hospitals on pricing as an actuary with Milliman Inc., says hospitals often keep cash prices above the rates
negotiated by big insurers.
"They don't want to give away too much of a discount because they really want the best discounts to go to these larger volume
negotiated insured rates," he said. "Somebody walking off the street, we'll give you a 20% discount, but we're going to give our
favorite customer, who sends us millions or even billions of dollars in business, we're going to give them a much bigger discount."
Yale New Haven Health offers cash prices that represent a discount off sticker rates, but it keeps them above all of the prices
negotiated by insurers, says Pat McCabe, the system's senior vice president of finance. "We didn't want there to be that tension,
for an insurer to look at that data and say, 'you're providing better rates to uninsured patients than you are to our insureds, how
do we justify that to our members and/or employer partners?' "
For individuals who struggle to pay, financial aid is hard to get at some hospitals with high cash prices, the Journal analysis
found. That is true even among the nearly 3,000 nonprofit hospitals that get tax breaks on the condition they give back to the community.
Hospitals typically set household income limits for financial aid, with free care for patients below a cutoff.
The quarter of hospitals with the most generous free-care policies write off the entire bill for those with monthly incomes
under about $2,600 a month, and even up to roughly $6,400 a month, for a one-person household, the Journal found.
Those that rank in the quarter of hospitals with the most-restrictive policies draw the line at or below about 160% of the
federal threshold for poverty, disqualifying for free care patients with monthly income of more than around $1,700 for a one-person
household, according to a Journal analysis of nonprofit hospital tax filings.
Brigham and Women's Hospital, affiliated with Harvard Medical School, falls in this most-restrictive group, with income cutoffs
for free care at $1,610 a month for a one-person household. For 12 of 17 emergency services at Brigham and Women's reviewed by the
Journal, its highest rates are for uninsured patients, and insurance companies pay significantly less.
Brigham and Women's Hospital, in Boston, Mass., is among the group of nonprofit hospitals with the most-restrictive income cutoffs
for free care.
A patient paying cash at the hospital for the stenting procedure is charged $84,792. Local insurer Fallon Health spends $36,755
for the procedure under one of its health-maintenance organization plans. A Medicare insurance plan from Aetna, part of
CVS Health Corp. , pays $16,648.
Mass General Brigham, the system that includes Brigham and Women's, said in a written statement it has policies to prevent
someone without insurance from paying full price.
Some hospitals, including Brigham and Women's, also partially discount patients' bills for some who earn too much for free care.
Others write off bills that are large relative to a patient's income. But policies vary widely. The most-restrictive quarter of hospitals
cut off discounts at 2.5 times the federal poverty level, the Journal found.
Patients who don't qualify for financial aid at nonprofit hospitals also aren't protected by pricing limits under federal
law. The Affordable Care Act requires nonprofit hospitals to cap prices for patients who qualify for financial aid.
Hospitals apply financial aid and discount policies inconsistently, say consumer advocates and patients. Offers may be one-time-only,
or discounts may emerge only when a skilled negotiator is pushing for them.
In January 2018, Joannie Berthiaume spent two days at Broward Health Imperial Point hospital in Fort Lauderdale, Fla., and
got emergency surgery to remove her appendix. She was uninsured and the hospital charged Ms. Berthiaume its highest prices. Her bill
totaled about $42,000, including a $6,033 abdominal CT scan. For that same scan, an Aetna subsidiary gets a 24% break, according
to the newly public data from Broward Health. That discount would have meant a fee of around $4,600 for the scan, based on the price
charged in 2018.
Ms. Berthiaume, who is Canadian but was living in Florida at the time of her illness while finishing graduate school, went in
person to Broward Health to ask about the bill. She was told it could be cut in half, to about $21,000 total -- if she paid in full
right then. Ms. Berthiaume, then working in a part-time bookkeeping job, says she couldn't do that. The hospital later continued
to seek the full amount, including in letters sent by a law firm and reviewed by the Journal.
"If you charge me $42,000 and your costs are justified, how can you knock it in half in a matter of minutes," Ms. Berthiaume
says. "You must be overcharging."
Ms. Berthiaume hired attorney Jacqueline Grady to negotiate on her behalf, and in October 2019 the hospital offered to accept
$20,000, in addition to $2,000 she had already paid, if she paid within 16 days. Ms. Berthiaume declined.
Broward Health declined to comment on the details of Ms. Berthiaume's case, although she signed a consent form allowing the hospital
system to do so. The hospital system said that U.S. citizens and people with a permanent U.S. residence who come to its hospitals
for unplanned care, and don't qualify for its financial assistance program, are offered a discounted rate.
In the pricing data files Broward Health has disclosed under the federal transparency requirement, the cash prices are shown as
Broward's highest rates. However, the hospital system pointed the Journal to a consumer tool on its website that displays lower prices
for self-pay patients. Broward Health said in a written statement that the tool "provides the most current pricing for consumers,"
and "discounted prices may not be reflected" in the data files. The system didn't respond to questions about the reasons for the
discrepancy.
High cash prices inflate bills that uninsured patients often struggle to pay. Hospitals collected 5% of the amount they billed
uninsured patients before writing off bills after a year of seeking payment, according to Crowe LLP, an accounting, technology and
consulting firm, based on an analysis of 600 client hospitals. That is compared with collecting 40% of bills sent to patients with
insurance for amounts owed under deductibles, copays and other out-of-pocket costs, based on a separate analysis by Crowe of about
1,500 hospitals.
Hospitals closely track their "payer mix," or the mix of patients with commercial insurance, Medicare, Medicaid and the uninsured,
who might be unlikely to ever pay for their treatment. That could play a role in how hospitals set prices.
For Mr. Macias, debt from Avera hospitals plus other bills related to his November hospitalization amount to about 75% of his
annual income, according to Resolve Advocates, one of a growing number of companies that patients hire to negotiate hospital medical
bills on their behalf.
Mr. Macias, a superintendent for a construction company, suffered a potentially life-threatening tear in the lining of his largest
artery. He said he has largely recovered.
Avera's hospital in Aberdeen charged him the highest price for some emergency room services, according to a review of medical
bills for Mr. Macias and the Journal's analysis of Avera's negotiated rates with insurers.
Avera in some cases has multiple contracts with a single insurer and said the prices it made public are the average price it charges
an insurer for each service.
The Avera Heart Hospital of South Dakota, in Sioux Falls, gave Mr. Macias a 20% discount. Even with the discount, some of the
heart hospital prices were in the top third of what the hospital charged patients with insurance for some services.
Mr. Macias, a superintendent for a construction company, earned too much for free care at Avera, where the income cutoff is among
the lowest nationally for nonprofit hospitals, ranking in the bottom quarter, according to the Journal analysis.
But he appears to qualify for other financial assistance, such as a partial discount based on income or because Mr. Macias's medical
debts are large when compared with his household finances, said Resolve's chief executive, Braden Pan.
Avera rejected the request, saying that Mr. Macias could have had workplace health benefits but didn't enroll, according to Resolve.
Mr. Macias said in an interview that he missed the sign-up after miscommunication with his former employer. Buying insurance in the
marketplace was too costly, he said.
Avera also rejected an appeal, after factoring in his assets alongside his income, according to Resolve. Mr. Macias said he needs
his years of savings for a house down payment.
Resolve also offered about $8,000, or slightly more than the company estimated Medicare would pay, for Mr. Macias's $24,800
emergency-room bill at Avera St. Luke's, Mr. Pan said. The hospital said no, and despite denying financial aid, offered to reduce
the bill by 50%, Mr. Pan said. The amount excluded another $34,994 he owes Avera's heart hospital.
Mr. Macias, citing his unhappiness about the fight, told the Journal he wouldn't give Avera permission under federal privacy laws
to speak about his interactions with it.
"Health care delivery comes with a cost -- and when individuals have the means to pay, it allows us resources to help those
most in need," Lindsey Meyers, a spokeswoman for Avera, said in a written statement. "We have thoroughly reviewed the case you
have mentioned and identified that all processes were followed as described, and we made every effort to work with the patient."
Mr. Macias said he has largely recovered with new blood-pressure medication and months of rehab exercises he devised on his own.
He now lives in Austin, Texas, with his fiancée and their children, ages 6 and 3. Avera's debt collectors call constantly, he said.
"They're still blowing me up."
"... While general medical care is single payer in Canada, dental services are not. For major work on teeth, it is cheaper to fly to Mexico. The downside is for Mexicans -- such practices will drive the costs up in Mexico. ..."
"The art of medicine consists of amusing the patient while nature cures the disease."
"No, I mean I'm sorry that you've inherited such a miserable, collapsing Old Country. A place where rich
Bankers own everything, where you've got to be grateful for a part-time job with no benefits and no retirement
plan, where the most health insurance you can afford is being careful and hoping you don't get sick
Cory Doctorow;
Homeland
"Until fairly recently, every family had a cornucopia of favorite home remedies–plants and household items
that could be prepared to treat minor medical emergencies, or to prevent a common ailment becoming something much
more serious. Most households had someone with a little understanding of home cures, and when knowledge fell
short, or more serious illness took hold, the family physician or village healer would be called in for a
consultation, and a treatment would be agreed upon. In those days we took personal responsibility for our
health–we took steps to prevent illness and were more aware of our bodies and of changes in them. And when illness
struck, we frequently had the personal means to remedy it. More often than not, the treatment could be found in
the garden or the larder. In the middle of the twentieth century we began to change our outlook. The advent of
modern medicine, together with its many miracles, also led to a much greater dependency on our physicians and to
an increasingly stretched healthcare system. The growth of the pharmaceutical industry has meant that there are
indeed "cures" for most symptoms, and we have become accustomed to putting our health in the hands of someone
else, and to purchasing products that make us feel good. Somewhere along the line we began to believe that
technology was in some way superior to what was natural, and so we willingly gave up control of even minor health
problems."
Karen Sullivan;
The Complete Family Guide to Natural Home Remedies: Safe and Effective Treatments for
Common Ailments
No, I haven't abandoned Uncle Volodya, or shifted my focus to American administration; what follows is a guest
post on the American healthcare system, by our friend UCG. As I've mentioned before – on the occasion of his
previous guest post, in fact – he is an ethnic Russian living in the Golden State.
As an American in America, naturally his immediate concern is going to be healthcare in America; but there are
lessons within for everyone. Don't get me wrong – doctors have done a tremendous amount of good, and medical
researchers and many others from the world of medicine have made tremendous advances to which many of us owe their
lives. Sadly, though, once a field goes commercial, the main focus of attention eventually becomes profit, and
there are few endeavors in which the customer base will be so desperate. While there are obvious benefits to
'socialized medicine' such as Canada enjoys and American politicians scorn as 'Commie' – enough to earn the
admiration of many – it results in such a backlog for major operations that those who don't like their chances of
dying first, and have the money or can somehow get it, often flee to America, where you can get a good standard of
medical care without running out of time waiting for it.
Without further ado, take it away, UCG!!
Healthcare in America
This article is my opinion. My hope is that others will do their own research on America's Healthcare Industry,
because this is an issue that needs to be addressed, and for this article to be a mere starting point in this
research. The reason for my citations is so that you, the reader, can verify them. Once again, this is my opinion.
I write this in the first paragraph, so that I can avoid stating "in my opinion" before every sentence.
I tore my ab wall a month ago and didn't think much of it until my pain kept worsening. I went to an
immediate care facility to rule out a hernia (I had all the symptoms) and they told me to get to ER ASAP. I go to
the ER and they give me a CT scan and one x-ray and say it's not a hernia and let me go. Fast forward to today and
I got a bill for $9,200 and $3,900 of it is out of pocket. $9,200 for two tests???? No pain meds were
administered; it was literally those two tests. What should I do to contest it? I will be calling tomorrow to
demand an itemized bill, but is there anything else I should do in the meantime?
All of these took me a few minutes on Google to find, and another few minutes to post. The reason I chose that
reddit, is because one of the readers offered an ingenious solution:
Next time you hurt yourself – book a
return ticket to NZ – go to accident and emergency, say you're a tourist and you hurt yourself surfing, pay
nothing – fly home and pocket $8,000 in spare change.
If that was me, I'd spend at least $2,000 on tourism in
New Zealand. You guys have that system, so you clearly deserve the money! Anyone interested in a startup?
But I am not done with examples just yet. Shana Sweney
described her experience in the emergency room
:
I delivered in 15 minutes. During that time, the
anesthesiologist put a heart rate monitor on my finger and played on his phone. My bill for his services was
$3,000. $200/minute. I talked to the insurance company about it – and since I ran my company's benefit plans, I
got a little further than most people, but ultimately, that was what their contract with the hospital said so
that's what they had to pay. Regardless of if he worked 15 minutes or 3 hours. Similarly, my twins were born
prematurely and ended up in the NICU for 2 weeks. While the NICU was in-network for my insurance, for some
mysterious reason, the neonatologists that attended the NICU were out of network. I think that bill was $16k and
they stopped by to see each kid for an average of about 30 min/day.
$984.157 billion. That's $984,157,000,000. That is how much money I believe the United States wastes on
Healthcare. Not spends; wastes. As in money down the drain. The astute reader figured out that equates to
five percent of America's 2016 GDP
. Said reader is
absolutely correct. How did I estimate such a gargantuan amount?
According to the OECD data
,
in 2013 the United States spent 16.4 percent of its GDP on Healthcare; the two next biggest spenders, Switzerland
and the Netherlands spent 11.1 percent. Even if one was to give the United States the benefit of doubt, and claim
that the United States healthcare is just as efficient as that of Switzerland or the Netherlands – which is most
likely not true according to
an
article from Business Insider
, but even if it was – that meant that the United States wastes 5.3% of its GDP
on healthcare. Wastes. I just want to make sure that the amount of this alleged legalized corruption, which will
most likely reach a trillion dollars by 2020, is noted.
Let me place those funds into perspective: it's almost as much as the amount that
the rest of the World spends
on the military, combined
. The SCO member states, including China, Russia, India, and Pakistan spent
roughly $360 billion on the
military
. The wasted amount is equivalent to the GDP of Indonesia, and
greater than the GDP of Turkey
or Switzerland
. In 2016, the US Federal Government spent $362 billion, or 36.8% of the wasted amount,
to run all Federal Programs
, including the Department
of Education and NASA, with the exception of Social Security, Medicare/Medicaid, Veteran's Affairs, the military,
and net interest on the US debt. All other Federal Programs were covered with the $362 billion. The US Federal
Debt
stands at $20.4 trillion
, meaning that the debt can be paid off in
30 years, merely if the Healthcare Waste is eliminated.
But why stop there? The US Housing Crisis started partly because loans were allowed to be taken out without the
20% down payment. Could this funding, if applied directly to the housing market, stop the 2008 Great Recession?
Absolutely, and
all the Federal Government had
to do
was to gear these funds towards down payment on subprime mortgage loans to meet the 20 percent barrier.
I can go on and on about what can be accomplished, like making collegiate attendance free, or at least very
inexpensive, or drastically improving the quality of education, paying off the national debt, reinvesting into the
economy, reinvigorating the rural sector, and so on, and so forth. A trillion dollars is a lot of money.
Lobbyists, the Media and the Waste
Any guess how much was spent on lobbying by the Healthcare, Insurance, Hospitals, Health Professionals, and
HMOs?
How about 10.5 billion dollars?
I knew
that was your guess! That's a lot of money, and that does not include "speaking fees", or when a politician who
constantly made calls beneficial to the Healthcare Lobby gets $150,000 to speak in front of an audience after they
retire from politics. Obama made a speech in front of Wall Street,
netting $400,000
. And by pure coincidence,
only one
Wall Street Broker was jailed
as a result of the scandal. That $10.5 billion is just a tip of the iceberg,
because "speaking fees" are notoriously hard to track, and not included in said amount.
Obama genuinely tried to reform US Healthcare to the Swiss Model. He was going to let Wall Street slide, he was
going to let Neocons conduct foreign policy, just please, let him have healthcare! First, the lobbyists laughed in
his face. Second, they
utilized the Blue Dog Coalition
to block Obama's attempt at Healthcare Reform, until it was phenomenally
nerfed, and we have the disaster that we have today. As a result, Obama's Legacy, Obamacare is having major
issues, including the rise of racism.
Obamacare helped the poor, (mostly minorities,) at the expense of the middle class, (mostly whites,) thus
transferring funding from whites to minorities. While the intent was not racial, it is being
called out
as racial by the mainstream media
. This probably suits the lobbyists, because if the debate is about racism,
one cannot have a genuine discussion about Healthcare Reform.
Racism strikes both ways. Samantha Bee came out with a
"fuck you
white people"
message right after the election. Jon Stewart, without whom she probably wouldn't have her own
show, pointed out that it was simply economics,
like the
healthcare insurance premium increase
, that brought Donald Trump to power. Interestingly enough, James
Carville made the same argument when Bill Clinton beat George Bush, but when Hillary Clinton lost, Carville was
quick to blame Russia. These delusions on the Left are letting the Right mobilize stronger than ever before. And
all of this takes away from the Healthcare Debate.
In an attempt to blame Trump's Election on white racism, rather than basic economics, numerous outlets simply
fell flat. For instance,
Eric Sasson writes
:
white men went 63 percent for Trump versus 31 percent for Clinton, and white women went
53-43 percent. Among college-educated whites, only 39 percent of men and 51 percent of women voted for Clinton
What's more, these people hadn't suffered under Obama; they'd thrived. The kind of change Trump was espousing
wasn't supposed to connect with this group.
Let's start with the banks. Medical students graduate with an average of
$416,216 in student debt
.
The
average interest rate
on said loan is
seven percent. Roughly 20,055 students
go through this
program, per year
. Presuming a twenty year loan, the banks are looking at about $7.185 billion in interest
payments. It really is a small fraction of the cost. Prescription drug prices are another story. In 2014, Medicare
spent $112 billion on
medicine for the elderly
. Oh la la! Cha-ching. I would not be surprised if at least half of that was wasted
on drug price inflation. You know the health insurance companies? It's a great time to be one, since profits are
booming – to the tune of
$18 billion in
projected revenue
for 2017.
Of course the system itself is quite wasteful, with needless hours spent on paperwork, claim verification,
contractual review, etc, etc, etc. Humana's revenue was
$54.4 billion
,
Aetna's was
$63.2
billion
, Anthem's was
$85 billion
,
Cigna's was
$39.7
billion
, and UnitedHealth's was
$184.8 billion
. Those
are just the top five companies. None of them ia a mom-and-pop shop or small business store. Do any of these
insurers support Obamacare? Even if they do, it is
without much enthusiasm
. They are leaving, and leaving quite quickly. Thirty-one percent of American counties
will have
just one healthcare insurer
. Welcome to a monopoly that is artificially creating itself. And despite the
waste,
28.2 million
Americans remain uninsured
. Mission accomplished!
Who else benefits? Those who hire illegal immigrants instead of American workers, since illegal immigrants cost
the United States roughly
$25 billion
in Healthcare spending
. Meanwhile those who hire them can avoid certain types of taxes and not have to cover
their Healthcare; communism for the rich, capitalism for the rest of us. Of course that is just a rough estimate,
since this spending is also quite hard to track.
The Future
The problem with changing Healthcare is that too many people have their hands in the proverbial pie. There is
not a single lever of power that isn't affected by Healthcare, and most of the levers that are affected, benefit
quite a bit. Insurance companies will fight to the death, because Universal Healthcare will be their death knell.
Banks will defend it, because who doesn't want to make billions from student loans? Medical schools too – since it
lets them charge higher and higher tuition. Pharmaceutical companies can use the increase in Healthcare
expenditure to justify their own price hikes, even though a major reason for those price hikes is artificial
patent based monopoly.
What is an artificial monopoly? In my opinion, it's when a patent is utilized to prevent competitors from
manufacturing the same exact drug. In less than a decade, the price of Epi-Pen soared from $103.50 to $608.61.
When asked the justify said increase,
one of
the reasons provided by the CEO
was that
the price went up because we were making investment; as I said,
about $1 billion over the last decade that we invested in the product that we could reach physicians and educate
legislatures.
"Reaching" doctors and legislators; I wonder, how was said "education funding" spent? According
to US News, a website that is extremely credible when it comes to internal decision making within the United
States,
drug companies have long courted doctors with gifts
, from speaking and consulting fees to educational
materials to food and drink. But while most doctors do not believe these gifts influence their decisions about
which drugs to prescribe, a new study found the gifts actually can make a difference – something patient advocates
have voiced concern about in the past. Do you feel educated? Would you feel more educated if I paid you a
$150,000 consulting fee? What about $400,000? What? It's just consulting; no corruption here!
Everyone knows that this is going on. But there is not going to be change. Why not? The same reason that there
was not change with Harvey Weinstein, until Taylor Swift came along. Remember how I said that almost everyone has
their hands in the Healthcare Pie? It was not much different with Weinstein. Scott Rosenberg explained
why it took so long for people to speak out against Harvey
, and the reasons were numerous. First, Harvey gave
many people their start in Hollywood, and treated all of his friends like royalty. That drastically increased
their loyalty. Second, he ushered the Golden Age of the 1990s, with movies like Pulp Fiction, Shakespeare in Love,
Clerks, Swingers, Scream, Good Will Hunting, English Patient, Life is Beautiful – the man could make phenomenal
movies. Third, even if one was willing to go against his own friends, workers, mass media, and so on, there was no
one to tell. There was no place to speak out. Fourth, some of the victims took hefty settlements.
That fourth reason enabled mass media to portray rape victims as gold diggers. Rape Culture is alive and well.
In California, a Judge
gave minimal sentencing to a convicted rapist
, because he was afraid a harsher sentence would damage the
rapist's mental psyche for life. Uh dude, from one Californian to another, he, uh, raped. His mental psyche is
already damaged; for life. That's the kind of pressure that Rose McGowan had to deal with. She had
a
little kerfuffle with Amazon
, and she thinks it was partially because of Harvey Weinstein. How many times had
the word "socialism" been thrown around to describe Universal Healthcare? Switzerland has it – are they Socialist?
Enter Taylor
Swift
. In order to destroy allegations that women are filing sexual harassment claims as gold diggers, she
sued her alleged sexual assaulter for a buck; one dollar. She won. Swift stated that the lawsuit was to
serve
as an example to other women who may resist publicly reliving similar outrageous and humiliating acts.
On top
of that, Weinstein was no longer as popular as he used to be, and an avenue to tell the story, an outlet was
created. The additional prevalence of the internet caused the stories of Weinstein's sexual abuse to leak. Within
a month, the giant fell.
Something similar is needed to change Healthcare in America. But until that comes along, racism will increase,
the cost of Healthcare will rise, emergency room costs will most likely double every ten years, and the future
remains bleak. As if that was not enough, more and more upper class Americans, (like yours truly,) are seeking
treatment abroad. It cost me less money to lose five weeks of wages, spend three weeks partying in Eastern Europe,
(Prague to be more specific,) after my two weeks of treatment, buy a roundtrip plane ticket, and stay in a five
star, all-inclusive hotel, than the cost of the same treatment in the US. If anyone wants to utilize this as a
startup – let me know!
Of course its effects on Healthcare will hurt, since it is a huge chunk of business that will be traveling
across the Atlantic. But what can be done to stop it? One cannot stop Americans from traveling to other countries.
One cannot force the poor to work for free. Perhaps this is the change that is needed to make those who benefit
from the Healthcare Waste realize that this cannot continue. Perhaps not. What we do know, is that Obamacare
insured the poor,
at
the expense of the middle class
. And that is regarded as a failure in America.
"In trying to show that he was successfully managing the Obamacare rollout, the
president last week staged a high-profile White House meeting with private health insurance executives -- aka
Obamacare's middlemen. The spectacle of a president begging these middlemen for help was a reminder that
Obamacare did not limit the power of the insurance companies as a single-payer system would.
****The new law instead cemented the industry's profit-extracting role in the larger health system -- and it
still leaves millions without insurance."*** (THAT is the Achille's lower torso of the ACA)
Exactly! That's why I stated that they're now oligapolizing the market, and will slowly start to increase
their insurance rates and profits once again.
(Socialist or not..the WSWS writers continue to state that which NEEDS to be hammered home)
"The vast wealth of the financial oligarchy, expressed in their ownership of massive corporations, must
be seized and expropriated, while the complex technologies, supply chains, and advanced transportation
systems must be integrated in an organized, planned manner to harness the anarchic force of the world
economy and eliminate material scarcity.
Amazon is a prime example. Its supply lines and delivery systems could distribute goods across the world,
bringing water, food, and medicine from each producer according to his or her ability, to each consumer
according to his or her need.
The massively sophisticated computational power used by the technology companies to censor and blacklist
political opposition could instead be used for logistical analysis to conduct rescue and rebuilding missions
in disaster zones like Houston and Puerto Rico. Drones used in the battlefield could be scrapped and rebuilt
to distribute supplies for building schools, museums, libraries, and theaters, and for making Internet
service available at no cost for the entire world.
The ruling class and all of the institutions of the political establishment stand inexorably in the way of
efforts to expropriate their wealth. What is required is to mobilize the working class in a political
struggle against the state and the socio-economic system on which it is based, through the fight for
socialism.
Eric London "
Advanced technology is helpful but not essential for a humane and just society. Its what we believe and
feel that matters. FWIW, I like socialism on a national/international level and individual accountability
on a personal level.
While general medical care is single payer in Canada, dental services are not. For major work on teeth, it
is cheaper to fly to Mexico. The downside is for Mexicans -- such practices will drive the costs up in Mexico.
Mark, today's posting provided is a nice change of pace to a topic of local impact (for me at least). UGC
presented a good overview peppered with supporting data.
In an earlier career incarnation, I worked as a systems analyst involved with development of online
systems for state social services. Data showed that our systems were able to administer a comprehensive
health care program for social services recipients for about 3-4% of the cost of services. Private medical
insurance providers required approximately 20% of the cost of services to provide similar services. Yet,
private providers were supposedly driven by invisible market forces to maximum efficiency. BS. In fact, they
are driven by greed and they found it much easier to maximize profits by colluding with politicians and
health care providers. That is the trouble with free markets – its just so damn easy to cheat and cheaters
are never in short supply.
One more thing, prescription drugs costs may exceed $600 billion in the US by 2021:
That would be nearly $2,000 per year for every American!
If a tiny fraction of that amount were spent on prevention, education, improved diets and other similar
initiatives, the population ought to be healthier and richer. But, greed overpowers the public good every
time. The US health care system is a criminal enterprise in my opinion. The good that it does is grossly
outweighed by greed and exploitation of human suffering.
I agree with that. Plus, it seems like they have an entire staff dedicated to giving their "customer" the
run around. A friend of mine had to deal with several different departments regarding his healthcare
bill. The billing office told him that they only deal with billing questions, and that for explanations
for the bill, he should call the doctor's office. The doctor's office told him to call the hospital,
since that's where the service took place. The hospital told him to call his primary doctor, who sent him
there, and his primary doctor referred him back to the specialist, where he was referred back to the
billing department, which promptly told him that they're closing for the day, since he spent 6 hours
being transferred from one department to the next.
I find it terribly silly that we should even consider med student's debt as an excuse. First, American
doctors are the best paid professionals in the country. Internists make a median 190 thousand a year, and
they are among the worst paid specialties. I cannot possibly see the problem with paying your income for 5
years, knowing that you get access to a caste that will allow you make good money into your eighties.
Second, the debt is not that high as you claim. Harvard Medical School tuition is 64 thousand. You can rent
across the street with 20 thousand a year – I currently live there.
Third, med students know all this. The reason why they borrow far more is because they know they can
afford it. I went to med school somewhere in a developing world. We shared toilets in the dorm. As a matter
of fact, most under-30s in Boston live in shared accommodation. The outliers? Med students. Even the lowly
Tufts and BU students that I met own cars and live by themselves, mainly in new buildings across the street
from their hospitals.
Every time I go to the doctors, I am thinking how I am going to sue their asses if they make a mistake.
It's not an excuse. It's a bill. When you rent an apartment, did you know that most landlords also factor
in the property tax when figuring out what your rent payment should be? Similarly, the interest payments
on the doctoral students' loans are passed off to the consumer, and that is yet another reason why
Healthcare is so expensive. That's why I think that medical school should be free for those students who
promise to charge their patients no more than x amount of money.
Interesting article. Looks like the rot in the US is terminal. But Canada and its "socialized" medicine is
not far behind. Operating an emergency ward with only one doctor doing the rounds at the rest of the
hospital during the night is absurd. But that is what major Canadian hospitals do. Don't bother going to
emergency at 2 am unless you are literally dying. Wait until 7 am when the day day crew arrives and you can
actually receive treatment.
The problem in Canada, as in the USA, is overpaid doctors and not enough of them (because they are
overpaid). Instead of paying a doctor $300,000 per year or more, the system needs to have 3 or more doctors
earning $100,000 per year. Then there is no excuse about being overworked and "requiring" a high
compensation. Big incomes attract crooks and not talent. If you want to be a doctor then you should do 5
years of low income work abroad or at home. That would weed out a lot of the $$$ in the eyeballs leeches. A
nasty side effect of having overpaid doctors and living adjacent to the US, is that they act like a mafia
and extort the government by threatening to leave to the USA. I say that the Canadian provinces should make
all medical students sign binding contracts to pay the cost difference between their Canadian medical
education and the equivalent in the USA if they decide to run off to America.
At the undergraduate level, the physics courses with the highest enrollment are aimed at streams going
into medicine. There are hordes of money maker wannabes trying to make it big in medicine. But they are all
nearly weeded out and never graduate from medical school. So the system maintains the fake doctor shortage
and racket level salaries. On top of this, hospitals pay a 300% markup for basic supplies (gauze, syringes,
etc). It is actually possible for private individuals to pay the nominal price so this is not just a theory.
Clearly, there is no effort to control costs by hospital administrations since basic economics would imply
that hospitals would pay less than individuals for these items due to the volume of sales involved. At the
end of the day North American public medicine is a non-market bloating itself into oblivion since the
taxpayer will always pay whatever is desired. That is, the spineless politicians will never crack the whip.
This is part of the problem in Canada. One way to help deal with it in my view, beyond simply cutting
doctors' fees (which any government with the political will to do so can do) is to simply make it easier
for International Medical Graduates to get licensed in Canada. Canada has legions of immigrants (and
could have pretty much however many more it likes) with full medical qualifications who would be thrilled
to work for much less than the current pay rates. It's a scandal how many qualified doctors we have in
Canada driving taxis rather than practicing medicine. If we just took advantage of the human resources we
already have, we could easily say to doctors who threaten to leave for the US, "Fine, go. We've got 10
guys from India lined up to do your job." This isn't to say that doctors shouldn't be very well-paid.
Anyone who has ever known someone in med school knows it's hell. But doctors would be very well-paid at
half the rates they're getting now.
Another part of the problem is an over-reliance on hospitals. There
are a lot of people in the hospitals more in "holding" than anything else, because there's no space in
the proper facilities for them (The book "Chronic Condition" talks about this). The problem with this is
that the cost per day to keep someone in the hospital is much higher than in other kinds of facilities.
This is an entirely unnecessary loss.
For all that though, the Canadian system is leaps and bounds better than the American. We spend a
vastly smaller percentage of our GDP on health care, and in return achieve higher health outcomes, as
measured by the WHO. If we were willing to spend the kind of money the Americans do on health care, we
could have patients sleeping in golden beds even with the structural flaws of our current system. That's
worth constantly remembering, because some of the proposals for health reform floating around now lean in
the direction of privatization, and we've seen where that road leads.
Before he retired from politics, Keith Martin was my MLA, and he was also a qualified MD. He used to
rail against the convoluted process for certification in medicine in Canada, while others complained
that we were subject to an influx of doctor-immigrants from India because Canada required less time
spent in medical school than India does. I never checked the veracity of that, although we do have
quite a few Indian doctors. My own doctor – in the military, and still now since he is in private
practice – is a South African, and he explained that he had gone in for the military (although he was
always a civilian, some military doctors are military members as well but most are not) because the
hoop-jumping process to be certified for private practice in Canada with foreign qualifications was
just too onerous.
Unsurprisingly, I completely agree on the subject of privatization, because it
always leads to an emphasis on profit and cost-cutting. I don't know why some people can't see that.
Thanks very much UCG, for your article. Very interesting reading for us Australians as the Federal
Government eventually wants to shove us kicking and screaming into a US-style privatized healthcare
insurance model.
Funnily enough I'm currently considering changing my private health insurer. I'm with Medibank Private at
present but considering maybe going with a smaller non-profit health fund like Australian Unity or Phoenix
Health Fund.
I was just about to post along the lines of "I don't know if Jen has experienced this in Australia but
here in the UK ." so I'll finish the thought. In the UK, successive governments, not just Conservative
ones, have been trying to dismantle the NHS and move us to the American system. It is pure ideology – no
amount of the very abundant evidence of the inefficiencies of the US system, its waste etc makes any dint
in the enthusiasm of those pressing for change.
Thank you Jen! My advice: don't let the Government cajole you into wasting your money on Corporate Greed.
Share the article with your fellow Australians, if you must, but don't let our wasteful system be
replicated. Interestingly enough, one of my friends, Lytburger, send me a meme right after Ukraine
adopted America's Healthcare System, it said: "ISIS refused to take responsibility for Ukraine's
Healthcare Reform!" I'd be happy to provide other data or answer questions about the Healthcare System
here.
As for insurance, I'm not sure if Australia has the in-network and out-of-network rules. Does it?
Whatever insurance you get, make sure that it has good coverage. If you own a home in the US, and you end
up in a hospital's emergency room that's not covered by your insurance, the hospital can take your house
under certain circumstances. Ironically, even the Government cannot. All of my real property is in
various Trust Accounts, just in case, and I make sure that I have insurance where all major hospitals are
in-network and that's the best I can do.
This is s very interesting insight into healthcare in the USA. The cost is shocking.
I live in the UK and the healthcare system is paid for from taxation.
When it was established over 70 years ago the health service would be available to all and financed entirely from taxation, which meant that people
paid into it according to their means.
It was the best thing in my view that government has ever done.
Good healthcare should be available to all and not dependent on peoples ability to pay. However there always a private healthcare system that ran alongside it
And over the years it had been unpicked as successive governments have tried to privatize it. Claiming
they will save the taxpayer money
– opticians and dentistry have become part private after 18 if you are employed.
Which many people do not mind.
-Elderly care was also privatised as it's the most expensive
-care for the disabled also is a issue for local councils
-Mental health became care in the community – society's problem!
Privatisation has meant profits for businesses, poor services to vulnerable groups.
And yet still more and more taxation is needed for the NHS!
The issue of more money was even part of the Brexit debate as it was stated that leaving the EU would mean
more money for the NHS which people are proud of.
There was a quote I was thinking of using in the lead-in, but decided in the end not to since I didn't
want to have too many and it might have become confusing. It related that you would get the best medical
care of your lifetime – after you died, when they were rushing to save your organs, for transplant.
Obviously this would not be true if you were not an organ donor (at least in this country) or died as the
result of general wasting away so that you had nothing left which would be particularly coveted. But this
is a major issue in medicine in some countries and there have been various lurid tales of bodies being
robbed of their organs without family permission, bodies of Ukrainian soldiers harvested of their organs
and rackets in third-world countries where the poor or helpless are robbed of organs while they are
alive. From my standpoint, since I haven't done much research on it, I have seen little proof of any of
them despite plenty of allegation, but it is easy to understand that traffic in organs to those who will
pay anything to live a little longer would be tremendously profitable, and the potential for
disproportionate profit seldom fails to draw the unscrupulous.
As I alluded in the lead-in, Canada has
what is sometimes described as 'socialized medicine' and alternatively as 'two-tier healthcare' although
I have never seen any real substantiation for the latter charge. My mom had an operation for colon cancer
some time back, and she paid nothing for the hospitalization or the operation. My father-in-law is
scheduled for the same operation as soon as he gets his blood-sugar low enough, and he already had one
for a hernia and removal of internal scar tissue from an old injury – again, we paid nothing. He had a
nurse come here for a couple of months, once a week, to change his dressing (because the incision would
was very slow to heal because he is diabetic – nothing. That's all great, from my point of view, and I've
paid into it all my life without ever using it because I was covered by the government under federal
guidelines while I served in the military, although I was a cheap patient because I never had to be
hospitalized for anything and was almost never even sick enough not to come to work. But the great
drawback to it, as I said, is the backlog which might mean you have to wait too long for an operation.
And in my small practical experience – the two cases I have just mentioned – both were scheduled for
surgery within a month of diagnosis. So perhaps the long wait is for particular operations such as heart
or brain surgery.
Thank you very much for a very interesting article UCG! Quite the horror story. I've heard quite a few about
the US over the years from people I know too. I think one of the BBC's former America correspondent gave an
interview to the Beeb as he was leaving America a few years back (MAtt Frei?) and was asked what were the
best and worst things about living there. The worst was certainly healthcare.
I've also read that
healthcare costs for the self-employed, independents, freelancers can also be crushing in the land of the
free where everyone can become rich. Has this changed? I would have thought that those were the ideal
Americans, making it off their own back, but apparently not.
There's also another issue that is not addressed: an ageing population. This is a very current theme and
it is now not at all unusual for people to live another 30 odd years after retirement. Now how on earth will
such people manage their healthcare for such a period? Will they have to hock absolutely everything they
have? America is already at war with itself (hence the utmost need to for
foreign
enemies), but
nothing is getting done. Just more of the same. Meanwhile the Brits are trying to copy the US through
stealth privatization of their health system. It might work as well as privatizing its rail service
Thanks for an interesting post, UCG. Hopefully this will stimulate some ideas on how to fix the American
healthcare system, which seems to be badly broken.
Broken for us but working perfectly for Big Pharma and insurance companies. That is a fundamental reason
why it will be extremely difficult to "fix" because it ain't broken as a money making machine.
With health care in general, there's a bit of a trade-off. The most cost-efficient systems, like the system
in Sweden for example, are fairly regimented and don't leave much room for individual choice (unless someone
pays out of pocket for treatment completely outside the public system). On the other hand, systems that give
people a little more choice, like the system in Germany, tend to be a little on the pricey side. I think,
given American political culture, something along the lines of the German model is much more likely to
attract widespread public support. In any case, it's still cheaper than the American system, and achieves
some of the best results in the world.
https://en.wikipedia.org/wiki/Healthcare_in_Germany
Quite different from my expectation of spartan if not rudimentary medical care and overworked staff in
a small Russian town. The blog on schools was interesting as well. Given where Russia was in the 90's
compared to now, it is easy to understand the strong popular support for the government and Putin in
particular.
Off topic but just saw a 2-3 minute piece on CBS news (a very long story for an American
national news show) about a Russian woman (former Playboy "model') who is challenging Putin. The
reporter assured us the if she became too popular, Putin would never allow her to win. The last time
Russia was allowed to protest, according to the reported was back in 2011 where the masses were
demanding change. The implication being that a subsequent crackdown has suppressed further protest.
The piece showed her speaking to a group (the camera view was such that is was impossible to
determine the audience size but it had to be at least 10 and possibly up to 30 people). The reporter
also speculated that the woman coud be a Kremlin plant to create a fake opposition. Just a mishmash of
a story all in all.
Speaking as someone who has been hospitalized 3 times in Russia and still live
to talk about, I have no complaints.
In the twilight years of the USSR everything was deficit, including medicine, and the hospitals were
often dilapidated, understaffed and lacking modern equipment. It was socialized medicine, of course, but you
only got the basics for "free". They would not let you die, but if you wanted any "extras", you had to pay
or provide "gifts" to the staff. The doctors were and still are good, but were grossly underpaid.
I was first in hospital here, in isolation because I had diphtheria, in 1993. They saved me. I thought my
number was up. When I was recovering, a nurse asked me when my wife would visit me.
"I have no wife."
"Your friends, then?"
"No friends. I only arrived here 3 weeks ago."
"You're going to be hungry!"
Our first child was born in 1999. The maternity wing of Moscow Hospital №1, opened 1837, was nightmarish.
I paid the anaesthetist so that he could ensure that my wife did not suffer during her labour: it was a
long, slow painful birth.
Our last child was born in 2008: brand new hospital; my wife had her own room; everything state-of
the-art. I paid nothing. My wife came out healthy with a healthy baby. I gave the obstetrician a "present"
after delivery.
A bribe? Not in my opinion: just a token of gratitude for a job well done.
I broke my left collarbone at the dacha that same year. I was in a village/small town (Ruza) hospital. It
was only 2-years old. There were problems because I have broken both collarbones before. Anyway, the
orthopaedic surgeon did a good job, and I didn't pay anything: emergency treatment is free for British
citizens, likewise Russians in the UK. A remnant of when the UK and the USSR were glorious allies against
the Beast.
I have also had varicose veins removed. Only 2 days in hospital. A job well done. I gave the surgeon a
present. He didn't ask me for one, but I thought it was right that I do so.
There have been great improvements in treatment and medical technology here. And the doctors and nursing
staff are well trained and competent.
Not perfect -- nothing is -- but more than satisfactory.
Yes, you do hear horror stories, as you do about the British National health Service, but all in all,
satisfactory.
And there is a private health system now financed by private insurance.
And I have had dental treatment here "on the state": no complaints -- and "free", paid by taxation.
An old Russian colleague of mine has lived in Germany many years now, but he comes back to Moscow to see
an orthodontist.
"They are just as good as in Germany, sometimes have even trained there, and much, much cheaper", he
says.
PS I paid the anaesthetist so he could get the best stuff to help a woman in labour and was unavailable
on the state health service. I forget what it was called now: some German manufactured stuff, I suppose.
My wife said it was the norm in Romania to provide small gifts to bureaucrats – too small to be
considered a bribe but a necessary gesture of appreciation. Its not entirely different from the custom
of bringing a small gift when visiting friends (bottle of wine, flowers, box of chocolate, etc.).
Very much so; I'm sure I mentioned before the controversy surrounding my marriage in Russia; the
waiting period that must follow an application to marry is 30 days (I guess this is a period during
which anyone opposing the marriage may make their case), while a tourist visa is also for a maximum
of 30 days. Therefore, I could not legally remain in Russia long enough to get married. Sveta was
very matter-of-fact about it; we would just, she said, announce that she was pregnant, which is one
of the exceptional conditions which will override the waiting period.
I said she would never get
a doctor to sign a certificate that she was pregnant if she was not. Within a week she had her
choice of three. We gave the doctor who furnished the certificate some flowers and a box of
chocolates. I never considered it a bribe, and still do not, and the gift followed the act. We
would have gotten the certificate anyway.
I notice that Russians typically take such a gift with them whenever they visit friends;
Ukrainians do, too. They never arrive empty-handed, and it seems much more a ritualized courtesy.
It seem odds to me how Russia or Romania can be stifling bureaucratic (as ME can attest) yet
rules will often be bent with hardly a blink to facilitate a reasonable request.
The healthcare system in a country probably reflects the dominant elements in said country's culture. Our
family's longtime GP was a buffoon. In my interactions with him his enthusiastic "hands-on" gung-ho approach
caused several problems, not least when I visited him to get a "line" certifying I was unfit for work a week
after a total hip replacement operation (he insisted on examining the wound and re-dressing it with a
dressing whose adhesive I had been tested for in hospital and deemed allergic to it; fun and games, anxiety
and discomfort ).
Nevertheless he made an immediate decision to admit a close relative of mine for surgery on the basis of
his examination of her.
"The middleman and the host society come in conflict because elements in each group have incompatible goals. To say this is
to deny the viewpoint common in the sociological literature that host hostility is self-generated (from psychological problems
or cultural traditions)."
Edna Bonacich, "A Theory of Middleman Minorities," 1973.
[1]
An interesting accompaniment to Nathan Cofnas's 2018 attempted debunking of Kevin MacDonald's work on Jews was the subtle resurfacing
of Steven Pinker's claim that a more plausible theory of the Jewish historical experience can be found in "Thomas Sowell's convincing
analysis of 'middleman minorities' such as the Jews, presented in his magisterial study of migration, race, conquest, and culture."
Pinker first involved himself in criticism of MacDonald's work in a
letter to Slate , in January 2000, where he made the
above comment. A mere teenager in January 2000, it was only in the wake of the Cofnas affair that I first discovered and read Pinker's
initial response to MacDonald's theory. It goes without saying that I disagreed with almost everything Pinker had to say, but I was
especially vexed by his invocation of the "middleman minority" theory, something I've been familiar with for over a decade and always
found strongly lacking. Pinker himself, of course, has relatively little expertise in the area, his only comment on the theme coming
from a quasi-memoir on Jewish intelligence written for
New Republic . Additionally, his gushing use
of persuasive language ("convincing," "magisterial") to describe Thomas Sowell's extremely derivative and now rather dated Migrations
and Cultures: A World View (1996) struck me as a wholly contrived inflation of what isn't really a rival theory at all,
and certainly not a Sowell innovation. In fact, the history of "middleman minority" theory, and especially its application to the
Jews, has a patchy, chequered, and ambiguous history that is worth exploring in its own right. The following essay is intended to
provide such a history, as well as to broadly assess the merits and inadequacies of exploring Jewish history through this lens, and
also the ways it complements, and falls short of, Kevin MacDonald's theory.
History of the Theory
The comparing of Jews with other sojourning or diaspora trading peoples is far from new, and has even been a staple of anti-Jewish
writing since at least the Enlightenment. Voltaire, for example, wrote in his Oeuvres Complètes (Geneva, 1756) and Dictionnaire
Philosophique (Basle, 1764) that "The Guebers [Parsis in the modern terminology], the Banyans [Indian merchants] and the Jews,
are the only nations which exist dispersed, having no alliance with any people, are perpetuated among foreign nations, and continue
apart from the rest of the world." [2]
In the course of his essay, however, Voltaire concluded that, some surface similarities aside, "It is certain that the Jewish nation
is the most singular that the world has ever seen." Bruno Bauer (1809 -- 1882), the German Protestant theologian, philosopher and
historian, also used the example of the Parsis and Overseas Indians, writing in The Jewish Problem (1843),
The base [of the tenacity of the Jewish national spirit] is lack of ability to develop with history, it is the reason of the
quite unhistorical character of that nation, and this again is due to its oriental nature. Such stationary nations exist in the
Orient, because there human liberty and the possibility of progress are still limited. In the Orient and in India, we still find
Parsees [sic] living in dispersion and worshipping the holy fire of Ormuz.
[3]
After Voltaire, commentary on the relationship between the economic activity of the Jews and other aspects of their behavior and
history, a key theme in modern middleman minority theory, were common points of discussion and debate. Jakob Friedrich Fries (1773
-- 1843), an avowedly anti-Semitic German philosopher, argued in his essay On the Danger to the Well-Being and Character of the
Germans Presented by the Jews (1816), that Jews adopted their historical middleman role willingly, out of a hunger for profit
and an innate sense of separateness, rather than being forced into it by broader economic structures and contexts (which again are
a major focus of modern middleman minority theory). For Fries,
Both in Germany and abroad the Jews had free states where they enjoyed every right, and even countries where they reigned --
but their sordidness, their mania for deceitful, second-hand dealing always remained the same. They shy away from industrious
occupations not because they are hindered from pursuing them but simply because they do not want to.
Following Bauer and Fries -- and before modern scholarship on the subject, the most prominent invocation of ideas similar to modern
middleman minority theory can be observed in the work of Karl Marx. In fact, Marx's essay On the Jewish Problem is an explicit
reply to Bauer, with Marx accusing Bauer of "a one-sided conception of the Jewish problem."
[4] Marx decried Bauer's focus on religious
matters, perceiving the roots of the Jewish problem to reside instead in resource competition and raw economics. In many of his arguments
and assessments of the economic and sociological position of the Jews, Marx anticipated Edna Bonacich (1940 -- ), the Jewish Marxist
anti-Zionist sociologist who essentially invented middleman minority theory in its modern form (and whose work will be discussed
below), in arguing for a structural-contextual explanation of the middleman role of the Jews. In this view, the historical development
of Capital essentially invites and entices certain sojourning or diaspora groups, including the Jews, to adopt lucrative but exploitative
and antagonistic roles within society. In the words of Marx, "we recognize therefore in Judaism a generally present anti-social element
which has been raised to its present peak by historical development , in which the Jews eagerly assisted ." [emphasis
added] These antagonistic roles then generate host hostility, which reinforces ethnocentrism and negative characteristics in the
minority, accelerating and deepening conflict.
Marx's emphasis on economic opportunity and the capitalist superstructure influenced later writers such as the German economist
Wilhelm Roscher (1817 -- 1894), Werner Sombart (1863 -- 1941), Max Weber (1864 -- 1920), and Georg Simmel (1858 -- 1918), all of
whom attempted in some form to trace the relationship of ethnicity to occupational choice (a major concern of modern middleman minority
theory), with particular attention paid to the Jews. In keeping with his flamboyant Marxism, Sombart was closest to Marx's ideas
on the Jews, arguing in The Jews and Modern Capitalism (1911) that Capital had drawn Jews into their influential, exploitative,
and lucrative roles in such a comprehensive manner that Jews had become a kind of ur-middleman minority, and thus were both the prime
movers of modern capitalism and the very embodiment of exploitative capital itself. Later, in Der moderne Kapitalismus (1913),
Sombart claimed that the middleman nature of the Jews had become endemic in society, creating generations of mere "traders," a bourgeois
"Jewish species" whose entire intellectual and emotional world is "directed to the money value of conditions and dealings, who therefore
calculates everything in terms of money." This "spirit of Moloch" compelled the entrepreneur to "make money relentlessly until at
last he conceives this as the real goal of all activity and all existence."
[5] For Sombart, the origins of the
worst of modern capitalism can be found in the early middleman role of the Jews, their medieval semi-nomadic quest for usury-derived
profit and Victorian hawking of shoddy goods being a precursor to modern advertising and the mass production of superfluous and quickly
obsolete consumer products.
Max Weber's interpretation of the Jewish middleman role was slightly softer, with Weber advancing the notion of "pariah capitalism."
Pariah capitalists, who include the Jews as well as the Parsis, the Overseas Indians, and the Overseas Chinese, are groups whose
characteristics and situational contexts make them prone to willingly adopt socially negative positions in order to obtain wealth
and influence. For Weber, capitalism itself was not intrinsically bad. The Puritans, with their industry and hard work, were held
up in Weber's The Protestant Ethic and the Spirit of Capitalism (1904/5) as exemplars of positive, "rational" capitalism.
Jews, and other pariah capitalists, however, invariably advanced a negative "irrational" capitalism typified by consumer credit,
speculation, and colonialism. According to Weber, middleman minorities or "pariah capitalist groups" perverted the essentially good
nature of capitalism because of their practice of "dual ethics," or moral double-standards, which was itself a product of their sojourning
nature and situational context. Weber also perceived Judaism itself as reinforcing the Jewish preference for pariah capitalism.
[6]
Softer still were the ideas of Wilhelm Roscher, one of the founders of the historical school of political economy. Roscher was
part of the historical economist or European Institutionalist movement (which also influenced Weber) that argued for a study of economics
based on empirical work that laid special methodological emphasis on context, rather than logical philosophy. Roscher's emphasis
on context and the historical development of capitalism are exemplified in his 1875 essay "The Status of the Jews in the Middle Ages
Considered from the Standpoint of Commercial Policy."[7] In this essay, Roscher presented capitalism as neither inherently good or
bad, and he made the argument that Jews, who like other middleman minorities were economic modernizers, were positive influences
and crucial to the development of a burgeoning economic trading system. Gideon Reuveni offers the following summary:
According to Roscher, the modernizing role of the Jews explains the change in attitudes within the social majority: from tolerance
and acceptance to exclusion and persecution. In other words, once, in the eyes of the majority the role of the Jews becomes superfluous,
resentments towards the Jews become more prevalent. This cycle in relations towards Jews, Roscher observed, was not specific to
the relationship between Jews and non-Jews but was rather a general development among many peoples who allow their economies to
be administered by a foreign and more highly cultivated people, but later, upon having reached the necessary level of development
themselves, often after intense struggles, try to emancipate themselves from this tutelage. According to Roscher, "one may defiantly
speak in this connection of a historical law here."
[8]
Similar to Roscher's ideas were the theories of the Jewish Marxist anti-Zionist Abram Leon (1918 -- 1944). Leon, a Polish Jew
said to have been executed at Auschwitz at the age of 26, published
The Jewish Question: A Marxist Interpretation around 1942, in
which he proposed that Jews were a "people-class." For Leon, "Judaism mirrors the interests of a pre-capitalist mercantile class."
He explains,
Judaism was an indispensable factor in precapitalist society. It was a fundamental organism within it. That is what explains the
two-thousand-year existence of Judaism in the Diaspora. The Jew was as characteristic a personage in feudal society as the lord and
the serf. It was no accident that a foreign element played the role of "capital" in feudal society. Feudal society as such
could not create a capitalist element; as soon as it was able to do so, precisely then it ceased being feudal. Nor was it accidental
that the Jew remained a foreigner in the midst of feudal society. The "capital" of precapitalist society existed outside of its economic
system. From the moment that capital begins to emerge from the womb of this social system and takes the place of the borrowed organ,
the Jew is eliminated and feudal society ceases to be feudal. It is modern capitalism that has posed the Jewish problem. Not because
the Jews today number close to twenty million people (the proportion of Jews to non-Jews has declined greatly since the Roman era)
but because capitalism destroyed the secular basis for the existence of Judaism. Capitalism destroyed feudal society; and with it
the function of the Jewish people-class. History doomed this people-class to disappearance; and thus the Jewish problem arose. The
Jewish problem is the problem of adapting Judaism to modern society.
Georg Simmel, an ethnically Jewish sociologist, philosopher, and critic, moved in much the same theoretical direction as Roscher
and Leon, as evidenced in his famous and still influential essay "Der Fremde" ("The Stranger") (1908). Simmel argued that certain
groups like Jews and other diaspora peoples may be members of host nations in a spatial sense but not in a social sense. They may
be in the nation, but not of it. These groups are both near and far, familiar and foreign. This contextual scenario
influences the behavior of "stranger" groups by permitting them freedom from convention and allowing them access to an alleged greater
objectivity. For Simmel, "the Stranger," the classic example of which in his estimation is the Jew, is "the person who comes today
and stays tomorrow. He is, so to speak, the potential wanderer: although he has not moved on, he has not quite overcome the freedom
of coming and going." [9] This freedom,
argues Simmel, makes "the Stranger" ideally suited to fulfil the role of middleman minority.
[10] As with Roscher's theory, which
is markedly contradicted in several key areas of the historical record, there are a number of obvious logical and evidential problems
with Simmel's theory, and these will be discussed later.
Between Simmel's 1908 essay and the 1970s, middleman minority theories continued to be advanced. With the exception of Philip
Curtin and his Cross-cultural Trade in World History (1984), these efforts were developed primarily by Jewish scholars, and
overwhelmingly within the context of trying to explicitly or implicitly explore, explain, or offer apologetics for the Jewish experience.
For example, Abner Cohen (1921 -- 2001), was an anthropologist at the University of London, who advanced, in his influential work
Urban Ethnicity (1974) and numerous other publications, the idea that there are "trading diasporas."
[11] Of particular interest are Cohen's
ideas about "visibility strategies" pursued by such groups:
The use of symbols to maintain group boundaries can thus be seen as a cultural strategy. In fact, many groups in traditional
and modern societies find that their interests are guarded better through invisible organisations such as cousinhoods, membership
in a common set of social clubs, religious ties, and informal networks, than through a highly visible, formally recognised institution.
At times, ethnic groups may need to heighten their visibility as strangers to maintain their interests while in other instances
they may wish to lower their profile and appear to be an integral part of the society.
[12]
This bears a striking similarity to the sixth chapter of Kevin MacDonald's Separation and Its Discontents , which is concerned
with visibility strategies, especially among crypto-Jews, and concludes with the argument that "this attempt to maintain separatism
while nevertheless making the barriers less visible is the crux of the problem of post-Enlightenment Judaism."
[13] In fact, beginning in the 1970s,
middleman minority theory began to develop several ideas that dovetail very well with the concept of Judaism as a group evolutionary
strategy. Nowhere is this more apparent than in the work of Edna Bonacich.
Although the modern refinement of middleman minority theory is often traced to Hubert Blalock's 1967 Toward a Theory of Minority-Group
Relations , the greater scholarly interest has been shown in Edna Bonacich's 1973 American Sociological Review article
"A Theory of Middleman Minorities." [14]
Bonacich sought to refine and systematize Blalock's theory within an anti-capitalist framework, essentially making the argument that
all group conflict in such scenarios is the result of a rational competition for resources in which group characteristics and interests
play a crucial role. A Jewish Marxist and anti-Zionist, Bonacich's interpretations borrow heavily from Marx, Sombart, Weber, Roscher,
and Leon, to the extent that Bonacich essentially concurs that capitalism created opportunities for exploitative middleman communities
and the Jews and other middleman minorities, who possess certain predisposing characteristics including dual loyalty and a level
of unscrupulousness, willingly and enthusiastically engaged in these roles.
Bonacich is well-known for her work on East Asian middleman minorities in the United States, especially her 1980 monograph
The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community , but her earliest work on middleman
minorities clearly demonstrates a concern with the Jewish experience.
[15] In her discussion of middleman
minorities in the 1973 article, Bonacich describes Jews as "perhaps the epitome of the form." Some of the key features of the 1973
article include the arguments that Jews and other middleman minorities are essentially economic "teams," and that these teams rely
upon very high levels of ethnocentrism and related social and economic strategies, which in turn enable them to succeed in individualistic
societies. Bonacich writes,
The modern industrial capitalist treats his workers impartially as economic instruments; he is as willing to exploit his own
son as he is a stranger. This universalism, the isolation of each competitor, is absent in middleman economic activity, where
primordial ties of family, region, sect, and ethnicity unite people against the surrounding, often individualistic economy
. [emphasis added] [16]
Bonacich makes some very interesting, and controversial, remarks on the nature of conflict between middleman minorities and their
hosts, with special reference to Jews. For Bonacich, accusations that Jews have simply been scapegoats for the woes of Europeans
are based on nothing more than a "surface impression."
[17] While noting that middleman minorities "are noteworthy for the acute hostility they have faced," it remains that,
host members have reason for feeling hostile toward middleman groups. Even the extremity of the host reaction can be
understood as "conflict" behavior. The reason is that the economic and organisational power of middleman groups makes them
extremely difficult to dislodge. The difficulty of breaking entrenched middleman monopolies, the difficulty of controlling
the growth and extension of their economic power, pushes host countries to ever more extreme reactions. One finds increasingly
harsh measures, piled on one another, until, when all else fails, "final solutions" are enacted.
[18] [emphasis added]
Bonacich has also argued that Jews and other middleman minorities do engage in economic and social "dual loyalty," and that middleman
minorities do in fact "drain" resources away from host populations and can become very powerful as a result. This then frequently
causes host elites and masses to unite against the sojourning element, a conflict that can escalate rapidly if the sojourning element
refuses to give up its monopolies. Bonacich explicitly rejects any idea that "host hostility is self-generated (from psychological
problems or cultural traditions)," arguing instead that "the middleman and the host society come in conflict because elements in
each group have incompatible goals." With her apparent justification of host violence against middleman minorities, including Jews,
as well as her objective view of certain Jewish characteristics, Bonacich's theory has been heavily criticized in some quarters,
despite its ongoing influence in contemporary sociology. Robert Cherry, for example, has lamented that Bonacich's ideas on middleman
minorities "reinforce persistent, negative Jewish stereotypes."
[19]
Discussion
Before moving to an assessment of the merits and inadequacies of middleman minority theory in explaining Jewish history, it's
worth reflecting on the history of the theory in light of Steven Pinker's claim that it represents a rival, or "more convincing,"
analysis of the Jewish historical trajectory. The first problem, of course, is that, despite Pinker's lavish praise, Thomas Sowell
is not remotely regarded within scholarship as a leading or original thinker in the area of middleman minority theory. Not only does
discussion of middleman minorities form a relatively small element of Sowell's Migrations And Cultures , but what does appear
is highly derivative of the work of Edna Bonacich, Walter Zenner, and others.
A further problem is Pinker's assumption that there exists a single, unified theory on middleman minorities that will help explain
the Jewish historical experience, and that somehow this will also be sufficient to counter the theory of Kevin MacDonald, or at least
offer a more convincing framework that would allow MacDonald's ideas to be dispensed with. As should already be clear from this brief,
and incomplete, bibliographical overview, within middleman minority theory there is a plethora of often competing interpretations,
as well as a general problem of definitions. Walter Zenner, a key proponent of middleman minority theory, concedes that "we tend
to make our definitions and models fit the prototypical group. For decades, the Jews were the archetype."
[20] In other words, for a considerable
time, middleman minority theory was built around trying to explain the experience of Jews, with other groups haphazardly mapped onto
the theory in way that tried to give the impression of similarity, even where these similarities were thin to non-existent. Bonacich
has made roughly the same argument, asserting that middleman minority theory should be regarded as incomplete because it can only
point to an "ideal type," and
In reality there are problems of fit between any actual ethnic group and this picture, problems in establishing which or how
many of the traits a population need have before it can be classified as a middleman minority.
[21]
Bonacich, very reasonably in my opinion, proposes that middleman minority theory, of which she herself is a pioneer, is something
of a misnomer and should be regarded as little more than "a useful sensitiser to a host of interrelated variables."
[22] One is therefore pressed by Pinker's claim to ask not only which of the many strands of middleman minority theories Steven
Pinker is praising, but also just how "convincing" and "magisterial" he can find it given the field's leading contemporary thinkers
regard their work in such ambiguous terms.
Finally, it is not at all clear how any of the aspects of middleman minority theory obviate the need for a deeper theoretical
framework in which to understand the behaviors and contexts under study. Middleman minority theory, as remarked above, is an incomplete
tool, and has little to offer in terms of deeper explanatory value for such relevant key concepts under discussion as resource competition,
ecological strategies, visibility strategies, psychological attitudes toward the majority, and social identity theory. One of the
strong points of Kevin MacDonald's work, which is truly cross-disciplinary and unusually well-equipped in terms of the relevant historical
literature, is that is does offer such an analysis, and can be argued to fill a lot of the logical and evidential gaps of middleman
minority theory. This is not to say that the two frameworks are in opposition, but that the concept of a group evolutionary strategy
can be usefully and seamlessly integrated into middleman minority theory, especially in relation to Jews.
It's been continually remarked by many scholars in the field that Jews should be regarded as either an "ideal type," "the epitome
of the form," a singular example, or otherwise unique case -- even within the context of broad comparative approaches with other
trading diaspora peoples. The qualities that have made Jews so unique -- cultural, historical, religious, and even biological --
are rarely remarked or elaborated upon in sociological studies of middleman minorities, which are often lacking in depth in terms
of their historical analysis. As will be discussed below, Zenner, in particular, has highlighted ways in which Jews do not fit the
standard middleman minority pattern, especially in terms of their extravagant and influential involvement in the culture and politics
of the host nation (see also MacDonald's Diaspora
Peoples on the Overseas Chinese, xlii ff). Unfortunately, middleman minority literature has little to say in terms of further
explanatory theory on how or why Jews came to both define and exceed the middleman typology. Here, middleman minority theory not
only isn't a rival for MacDonald's work, it positively cries out for it.
"American Jews do not fit the sojourner pattern, since their political involvement goes far beyond the support of Jewish causes.
Much Jewish political activity, whether right, center, or left, can be related to a perception of how to make America and the
world safe for Jews. American Jewish support for domestic liberalism and internationalism can be interpreted in this way."
Walter Zenner, "American Jewry in the light of Middleman Minority Theories," 1980.
[23]
Merits of Middleman Minority Theory
The most obvious merit of middleman minority theory is that, like Kevin MacDonald's theory of a group evolutionary strategy, it
places an unusual and welcome emphasis on rational resource competition as the basis for social conflict involving certain minorities.
By offering a socio-economic explanation for hostility toward Jews, middleman minority theory represents a unique space within academia
where the otherwise ubiquitous "pure prejudice" idea that host hostility is self-generated (from psychological problems or cultural
traditions) is summarily and comprehensively dismissed. Although this has not come without criticism, as seen in Robert Cherry's
denunciation of Edna Bonacich's work as reinforcing bigotry
[24] , this emphasis has been able
to continue largely untroubled thanks to its advancement under a hardline traditional Marxist interpretive veneer.
Middleman minority theory, especially the variant advanced by Bonacich, also insists that host populations do have interests,
and that these interests are genuinely and seriously threatened by middleman minorities who drain away resources. These minorities
then use their accumulated resources to build up power and influence, sometimes even to the extent of gaining considerable economic,
social, and political monopolies over the hosts. Since these monopolies can be very difficult to dislodge, and since monopolies may
satisfy some interests of host populations or segments of host populations, middleman minority theory insists that it is rational
and somewhat inevitable that increasingly harsh and even violent measures will be taken against the offending minority. As a result,
middleman minority theory offers a far more plausible and objective understanding of group conflict than many of the ideas that dominate
the academic discussion of group conflict, especially conflict involving Jews. In addition, the outright rejection of "scapegoat"
theories as "superficial," and the lack of appeals to concepts of victimhood in such a framework, can only be described in the context
of the current academic climate as utterly refreshing.
A second major merit of middleman minority theory is the emphasis that some strands place on the characteristics of the
minorities themselves. Middleman minority theory contains within it three basic theoretical approaches. Context-based theories like
that of Roscher, and revived to some degree by Nathan Cofnas (who is particularly concerned with the urban environment-context),
argue that middleman minorities are essentially creatures of the societies in which they are found, and are for the most part created
by opportunities, status gaps, and vacuums over which they have no control and which have nothing to do with their inherent characteristics
(a slight advantage in intelligence being the only characteristic that Cofnas feels comfortable in applying). Situational theories,
like that advanced by Simmel are similar, but place more emphasis on the culturally-located role of the trader, the Stranger, and
the "sojourner as trader," as the determinant factor in the creation of middleman minorities. Culture-based, or characteristic-based,
middleman minority theories, however, tend to be more numerous, and more convincing. These theories, like that advanced by Weber
and given tacit assent by Bonacich and Zenner, place strong emphasis on the broad range of traditions, ideologies, behaviors, and
aptitudes of middleman minority groups.
The most frequently highlighted of such traits within middleman minority theory is ethnocentrism, which again dovetails with the
primary emphasis of Kevin MacDonald's theory. Ethnocentrism is acknowledged as a central factor in the maintenance of self-segregation
among middleman minority groups, and is often supported by ideological beliefs such as the caste system, or what Zenner describes
as "the Chosen People complex." [25]
Ethnocentrism in middleman minorities is presented as crucial to understanding host hostility not only because of the way it facilitates
the draining of resources from the host population, but also because of highly antagonistic correlates such as dual loyalty and a
willingness to engage in lucrative but morally destructive (for the host) trading. Walter Zenner speaks of a "double standard of
morality" that is
Expressed in dealings with outsiders, such as lending to them with interest, unscrupulous selling practices, and providing
outsiders with illicit means of gratifying their appetites, while at the same time, denying the same means to in-group members.
[26]
An excellent example of this process in action is the fact
Israel
is the largest producer and host of international online gambling sites , while making it illegal for its own citizens to use
such sites. Of course, we are talking here about a nation state rather than a minority population, but this contradiction, and the
nature of Israel within the international community, will be discussed in a critique of the narrowness of middleman minority theory
later.
A further merit of middleman minority theory is the heavy emphasis the cultural-characteristic interpretation places on group
strategies. Middleman minorities, again with Jews being held up by both Zenner and Bonacich as an exemplar or especially acute case,
are said to engage in constantly adaptive activity in order to manage their visibility, ensure their safety, advance their interests,
accumulate power and wealth, and entrench themselves ever deeper within the host. Bonacich has indicated that Jews are especially
keen to remain entrenched in the West, and the United States in particular, because it is financially and politically lucrative,
and only a catastrophic weakening of their monopolies would bring an end to existing strategies.
[27] Zenner goes as far as to claim
that "much of the content of American Jewish life can be seen as visibility strategies. Strategy here includes both unconscious mechanisms
of coping with situations and consciously formulated plans."
[28] Zenner speaks of a "dynamic process"
whereby Jews minimise visibility to avoid hostility, maximise visibility when pursuing certain interests, and generally work unceasingly
to make their image more favorable in the minds of the host. Again, all of this corresponds very well with one of the central themes
of the Culture of Critique -- the idea that Jewish involvement in certain intellectual movements could be seen in the context
of a pursuit of Jewish interests either consciously or in ways that involved unconscious motivations and self-deception. It also
maps very closely to MacDonald's framework on Jewish crypsis and other attempts to mitigate anti-Semitism, advanced in the sixth
chapter of Separation and Its Discontents .
Problems in Middleman Minority Theory
Given the prevalence of Jews in the development and promotion of the modern incarnation of middleman minority theory, including
Georg Simmel, Edna Bonacich, Abner Cohen, Abram Leon, Walter Zenner, Werner Cahnman,
[29] Donald Horowitz,
[30] Gideon Reuveni,
[31] Ivan Light, Steven J. Gold,
[32] and Robert Silverman,
[33] a reasonable concern might be
that middleman minority theory is itself an intellectual "visibility strategy." Just as it has been posited that Jews tend to support
mass migration because it will result in Jews becoming "one among many" ethnic minorities, and thus in their logic less conspicuous
and therefore safer, middleman minority theory can act to reduce Jewish visibility by offering the idea that Jews are just one among
many diaspora trading groups and their history and behavior is therefore not unique or worthy of special attention. It remains the
case that even in those interpretations which highlight negative Jewish behavior and portray host responses as rational (e.g. the
work of Bonacich and Zenner), the proposed framework still insists on some level of commonality, no matter how tenuous, with the
experiences of other minority groups, and it ultimately places the blame for conflict on a much broader context, often the impersonal
historical development of capitalism.
In other words, while the framework can deny that Jews are "victims" of host nations, these theories also deny that host nations
are truly the victims of Jewish exploitation. Both are simply argued to be the victims of capitalism, and any sense of individual
or group agency is rhetorically dissolved. Again, this acts to lower Jewish visibility and culpability and remains attractive for
that reason. There are certainly good reasons along this line of thought for proposing that Steven Pinker's promotion of the theory
over Kevin MacDonald's ideas has less to do with a serious engagement with the content of the work of Bonacich et al. and significantly
more to do with deflecting the entire conversation into an area of discussion in which Pinker feels Jews are less visible.
A major problem with middleman minority theory is that it has a very uncomfortable and unsatisfactory way of handling the obviously
unique aspects of the Jewish experience, especially in relation to the unprecedented involvement of Jews in post-Enlightenment Western
culture and politics, something for which there is absolutely no parallel among other diaspora trading groups anywhere. As has been
discussed, middleman minority theory was essentially first created, consciously or unconsciously, by scholars anxious to find a way
to explain the Jewish experience. Attempts to connect this experience, amounting to some two millennia of history, with the much
more modern and straightforward experiences of, for example, the Chinese in the Philippines or the Japanese in America, have been
doomed to the grossest of generalizations and the clumsiest of associations. This has resulted in a steady stream of admissions within
the field that the best way to interpret middleman minority theory is simply that it proposes an "ideal type" (essentially the Jews)
with unfortunate "problems of fit between any actual ethnic group and this picture [the Jewish experience]."
[34] Zenner has conceded that the
concept has been very "difficult to define so as to cover all groups so designated."
[35] All of which calls into question
whether this concept possesses any real efficacy as an analytical or predictive tool in a comparative sense at all.
An interesting point of difference between the Jewish experience and that of other diaspora trading peoples is that the latter
are acknowledged as possessing a genuine sense of sojourn. In other words, their first generations tend to be truly temporary, semi-nomadic
groups who aim to make money before eventually returning to a homeland. A subtly different experience is observed in the Jews, as
noted by Jack Kugelmass in his 1981 PhD thesis Native Aliens: The Jews of Poland as a Middleman Minority . For Kugelmass,
"the so-called "middleman" character of the Jew is seen as an aspect of the Jewish sense of sojourn, which unlike most sojourns
is ideological rather than sociological in nature ." [emphasis added] Another way of phrasing this would be to say that the Jewish
sense of sojourn is cultural-biological rather than contextual, and since the concept of sojourning has been a major feature of Jewish
life since at least the writing of the Exodus, this difference between other groups is really so stark as to require a distinct analysis
-- something offered to an unparalleled degree in Kevin MacDonald's A People That Shall Dwell Alone . In this analysis, it
would appear that, unlike a relatively small number of other peoples who have merely adopted some tactics in order to pursue a specific
diaspora trade role, Jews have, from time immemorial, given themselves over entirely to these strategies as an entire way of life
-- the "middleman minority" as a raison d'être .
This absolutely crucial distinction is linked to the remarkable fact of contemporary political life that the state of Israel exists
largely according to the same strategies employed by Jews when in a diaspora condition. As stated above, an excellent example of
the dual morality process in action is the fact Israel is the largest producer and host of international online gambling sites
, while making it illegal for its own citizens to use such sites. The creation of the state of Israel has also exacerbated, rather
than ameliorated, issues of dual loyalty in Jewish minority populations, even if these issues are more or less kept out of the public
eye through diplomatic soothing around Israeli spying and the maintenance of certain taboos in the mass media. Israel itself would
appear to be a kind of middleman minority archetype within the international community, cultivating close and lucrative ties with
the elite (the United States), while engaging in more or less unchallenged exploitative and oppressive activities against lower social
orders (Palestinians, and other
vulnerable or indebted population groups in South America).
Like the "ideal type" of middleman minority, Israel heavily drains the resources even of its allies (U.S. military and diplomatic
aid) and pursues its strategies in a ceaseless quest for security, while maintaining moral double standards and being rather shameless
in engaging in what Zenner has described as the classic overrepresentation of middleman minorities in "morally shady" activities.
[36] Even in recent years, Israel has become notorious in the
international organ trade ,
moneylending , and allegations of humanitarian atrocities. Israeli newspapers have also described their country as a "
monopoly nation " due to the intense tendency towards economic monopoly in the country's business life -- a key feature of middleman
minority life that Jews appear to continue to embody to an extent unparalleled in any other ethnic group. Further evidence for the
apparently deep-seated, rather than contextual, nature of "middleman" traits in Jews might be found in studies indicative of a biological
underpinning to Jewish ethnocentrism, such as that described by Kevin MacDonald in the Preface to the Culture of Critique
:
Developmental psychologists have found unusually intense fear reactions among Israeli infants in response to strangers, while
the opposite pattern is found for infants from North Germany. The Israeli infants were much more likely to become "inconsolably
upset" in reaction to strangers, whereas the North German infants had relatively minor reactions to strangers. The Israeli babies
therefore tended to have an unusual degree of stranger anxiety, while the North German babies were the opposite -- findings that
fit with the hypothesis that Europeans and Jews are on opposite ends of scales of xenophobia and ethnocentrism.
As well as dealing poorly with obviously unique aspects of the Jewish experience, a significant portion of middleman minority
theory is devoted to context-based narratives that are often in stark contrast to, or completely disproven by, the historical record.
With the exception of the work of Kevin MacDonald, which demonstrates a very extensive engagement with works of history, a general
weakness in all of the late twentieth-century sociological studies discussed above is the fact that, despite their incredibly ambitious
claims about the historical trajectory of capitalism or middleman minority populations, there is a quite serious neglect of any of
the relevant historiography. This leads, in the case of the modern adherents of Simmel, Roscher, and Leon, to the constant repetition
of error-laden tropes such as the idea that Jews turned to commerce because they were prohibited from owning land (rather than arriving
as profit-seeking financiers), that Jews were most often invited into nations by elites seeking a financial stimulus, or that Jews
were banished from countries once their position as loan merchant was superfluous. In fact, these three tropes, all of which remove
Jewish agency and characteristics from consideration, are essentially the pillars of context-based middleman minority theory pertaining
to Jews, and are absolutely crucial to Roscher's ideas in particular.
The historical record is now acknowledged as more or less complete in relation to the issue of the Jewish ownership of land. It
has been conclusively established, for example, that the general trend across Europe was that Jews were in fact able to possess and
own land during the centuries immediately following their initial spread and expansion in Europe (c.1000 -- 1300). Restrictions on
land ownership were later enacted as penalties for exploitation or as part of a system of elite land transfer -- e.g., the desire
of the English kings to obtain the land of indebted lesser knights, and doing so by financially compensating Jewish moneylenders
for forfeited lands they could no longer legally hold.
One of the correlates of the land ownership trope is the astonishingly naive assumption that land ownership would preclude involvement
in financial speculation. Again, the historical record contradicts this. Mark Meyerson's Princeton-published A Jewish Renaissance
in Fifteenth-Century Spain (2010), for example, offers an expansive analysis of Jewish landowners in Spain who "did not necessarily
cultivate the land themselves" and combined wine production operations worked by non-Jewish peasants with "lending operations and
tax farming." [37] Pointing to the
prevalence of early Jewish land ownership in Poland, France, and Germany, in which Jews enjoyed a "privileged status available to
few Christians," Norman Roth has described the trope that Jews were forced out of agriculture by restrictive laws and the violence
of the Crusades as "patently absurd."
[38]
The theory that Jews, and by tenuous implication other middleman minorities, were most often invited into nations by elites
seeking a financial stimulus or to fill a "status gap," is also contradicted by the historical record. The early entry and expansion
of Jews in Europe is relatively well-documented, the dominant trend being that Jews either presented themselves before elites in
order to solicit business, or that they acted as financiers for conquest and then followed in the wake of the conquerors (e.g., the
well-documented role of Jewish financiers in Norman Conquest of England and Strongbow's conquest of Ireland).
[39] Ireland's Annals of Innisfallen
(1079 A.D.) record: "Five Jews came from over sea with gifts to Tairdelbach [King of Munster], and they were sent back again over
sea." Unless Tairdelbach (Turlough O'Brien, 1009 -- 86) had undergone a dramatic change of mind, it's likely that the arrival of
the Jews hadn't been preceded by an invitation. In fact, unsolicited approaches for request to settle and establish financial activities
are in evidence from the time of O'Brien to the 1655 "Humble Address" of Manasse ben Israel to the English government.
A very common form of government documentation found in the study of Early Modern Jewish communities are the charters outlining
their terms of settlement, and these are very revealing. Rather than act as economic catalysts, Jews are more frequently observed
following the trail of already economically improving areas, hoping to profit from their advancement. As Felicitas Schmeider has
pointed out, in terms of the German context, "permission to settle Jews in a newly privileged town is one thing kings were frequently,
if not regularly, asked for, especially in the thirteenth and fourteenth centuries."
[40]
The theory that Jews were banished from countries once their position as loan merchant or general role as a middleman minority
was superfluous is also forcefully contradicted by the historical record. Just as medieval Jews perceived that they were the innocent
victims of evil Gentiles, so Jewish historiography has overwhelmingly portrayed the expulsions as the result of "rumors, prejudices,
and insinuating and irrational accusations."
[41] Context-based middleman minorities
theories absorbed these tropes and reinvented them in narratives that blamed the expulsions on the fact that Capital had simply exhausted
the usefulness of the Jews. Such understandings of the expulsions have only very recently come to be revised, most saliently in the
work of Harvard historian Rowan W. Dorin, whose 2015 doctoral thesis and subsequent publications have for the first time helped to
fully contextualize the mass expulsions of Jews in Europe during the medieval period, 1200 -- 1450.
[42]
Dorin points out that Jews were never specifically targeted for expulsion qua Jews, but as usurers, and notes that the
vast majority of expulsions in the period targeted "Christians hailing from northern Italy." Jews were expelled, like these Christian
usurers, for their actions, choices, and behaviors. What the period witnessed was not a wave of irrational anti-Jewish actions, or
for that matter an impersonal reflex of glutted Capital, but rather a widespread ecclesiastical reaction against the spread
of moneylending among Christians that eventually absorbed Jews into its considerations for common sense reasons. A number of laws
and statutes, for example Usuranum voraginem , were designed in order to provide a schedule of punishments for foreign/travelling
Christian moneylenders. These laws contained provisions for excommunication and a prohibition on renting property in certain locales.
The latter effectively prohibited such moneylenders from taking up residence in those locations, and compelled their expulsion in
cases where they were already domiciled. It was only after these laws were in effect that some theologians and clerics began to question
why they weren't also applied to Jews who, in the words of historian Gavin Langmuir, were then "disproportionately engaged in moneylending
in northern Europe by the late 12th century."
[43] The Church had historically objected
to the expulsion of Jews in the belief that their scattered presence fulfilled theological and eschatological functions. It was only
via the broader, largely common sense, application of newly developed anti-usury laws that such obstructions to confrontations with
Jews became theologically and ecclesiastically permissible, if not entirely desirable. And once this Rubicon had been crossed, it
paved the way for a rapid series of expulsions of Jewish usury colonies from European towns and cities, a process that accelerated
rapidly between the thirteenth and fifteenth centuries.
The lack of engagement with developments in historiography is worsened to a large extent by the absence of a truly cross-disciplinary
approach in most, if not all, existing middleman minority analyses. This is particularly glaring in the works of Bonacich and Zenner
which, while making multiple and apparently crucial references to conscious and unconscious group "strategies," fail to engage in
any kind of historiographical or psychological scholarly contextualization. How exactly such strategies as "visibility strategies"
can operate at group level are left completely unexplained and without any substantial evidence beyond common sense observations
of Jewish behavior. The lack of a cross-disciplinary approach in such instances doesn't necessarily mean that these ideas are wrong,
or that "visibility strategies" don't exist, but it does mean that explanations and evidence are still required. To date, the only
convincing attempt to fill in such gaps, and offer a truly cross-disciplinary approach (incorporating history, sociology, and psychology)
to the idea of group strategies, is found in the work of Kevin MacDonald.
Conclusion
As stated at the outset of this essay, it isn't at all clear how any of the aspects of middleman minority theory obviate the need
for a deeper theoretical framework in which to understand the behaviors and contexts under study. Middleman minority theory, as remarked
above, is an incomplete tool, and has little to offer in terms of deeper explanatory value for such relevant key concepts under discussion
as resource competition, ecological strategies, visibility strategies, and social identity theory. Middleman minority theory, or
at least some strands of it, is useful and valuable in the study of Jews to the extent that it places an unusual emphasis on group
conflict as arising from resource competition, the characteristics of Jews (including Jewish ethnocentrism), and the existence of
group strategies. There are, however, multiple, serious inadequacies in middleman minority theory, including the possibility that
it is in part itself a "visibility strategy," that is has a general problem of definitions, that it fails to adequately deal with
unique qualities of the Jews and their experiences, that it generally fails to engage with the historical record, and that it has
no real explanatory or predictive frameworks for many of the ideas it discusses, including group strategies. I am forced to concur
with Edna Bonacich that, in regards to the study of Jews, middleman minority theory should be conceived, at best, as "a useful sensitiser
to a host of interrelated variables."
[44]
Notes
[1] Bonacich, Edna. "A Theory
of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94, (589).
[2] Francois-Marie Arouet de
Voltaire, Oeuvres Complètes (Geneva, 1756), Vol. 7. Ch.1. See also Dictionnaire Philosophique (Basle, 1764), Vol. 14
.
[3] B. Bauer, The Jewish Problem
( Die Judenfrage , 1843) ed Ellis Rivkin and trans. Helen Lederer (Cincinnati: Hebrew Union College -- Jewish Institute of
Religion, 1958).
[4] K. Marx, On the Jewish
Problem ( Zur Judenfrage , 1844) ed Ellis Rivkin and trans. Helen Lederer (Cincinnati: Hebrew Union College -- Jewish
Institute of Religion, 1958).
[5] W. Sombart, Der moderne
Kapitalismus , Munich and Leipzig 1913. This work was published in an English translation by E. Epstein under the title, The
Quintessence of Capitalism , London, 1915.
[6] W. P. Zenner, Minorities
in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 5.
[7] W. Roscher, "Die Stellung der Juden im Mittelalter, betrachtet vom Standpunkt der allgemeine Handelspolitik," Zeitschrift
für die gesamte Staatswissenschaft Bd. 31 (1875) S. 503 -- 526.
[8] G. Reuveni, "Prolegomena
to an "Economic Turn" in Jewish History," in G. Reuveni (ed) The Economy in Jewish History: New Perspectives on the Interrelationship
Between Ethnicity and Economic Life (Berghahn, 2011), 3.
[9] As the son of Catholic and
Lutheran converts from Judaism, Simmel's relationship to his Jewishness is fascinating in itself. See A. Morris-Reich, The Quest
for Jewish Assimilation in Modern Social Science , (New York: Routledge, 2008), chapter 4. For the influence of Simmel's stranger
minority theory see Werner Cahnman, "Pariahs, Strangers, and Court Jews -- A Conceptual Classification," Sociological Analysis, 35
(1974); C. R. Hallpike, "Some problems in Cross-Cultural Comparison," in The Translation of Culture , T. Beidelman (ed), (London:
Tavistock, 1971); Hilda Kuper, "Strangers in Plural Societies: Asians in South Africa and Uganda," in Pluralism in Africa
, Leo Kuper and M. G. Smith (eds) (Berkeley: University of California Press, 1971); Jack H. Porter, "The Urban Middleman: A Comparative
Analysis," Comparative Social Research , 4 (1981); R. A. Reminick, "The Evil Eye Belief among the Amhara of Ethiopia," Ethnology,
13 (1974), W. Shack and E. Skinner, Strangers in African Societies (Berkelely: University of California Press, 1979); Paul
Siu, "The Sojourner," American Journal of Sociology , 58, (1952).
[10] J. Stone, Racial Conflict
in Contemporary Society , (Cambridge: Harvard University Press, 1985), 96.
[11] This coinage is frequently
attributed to Philip Curtin, who employs the term in his Cross-cultural Trade in World History (1984), but the term was in
use by Cohen, within a strict thematic sense, as early as the latter's 1974 chapter "Cultural Strategies in the Organisation of Trading
Diasporas," in C. Meillassoux (ed) The Development of Indigenous Trade and Markets in West Africa (London, 1971).
[12] Quoted in W. P. Zenner,
Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 8.
[13] K. MacDonald, Separation
and Its Discontents: Toward an Evolutionary Theory of Anti-Semitism , 187.
[14] E. Bonacich, "A Theory
of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94.
[15] E. Bonacich, The Economic
Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980).
[19] R. Cherry, "American Jewry
and Bonacich's Middleman Minority Theory," Review of Radical Political Economics , 22 (2 -- 3), 158 -- 173, 161.
[20] W. P. Zenner, Minorities
in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 10. See also W. Zenner, "American Jewry
in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11 -- 30, 18. Zenner argues that "As a synthetic
concept, the phrase "middleman minority" is difficult to define so as to cover all groups so designated."
[21] E. Bonacich, The Economic
Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980),
22. See also E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94, 585.
[27] E. Bonacich, "A Theory
of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583-94, 592.
[28] W. Zenner, "American Jewry
in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 23.
[29] W. Cahnman, "Pariahs, Strangers
and Court Jews," Sociological Analysis 35, 3 (1974): 155-66.
[30] D. Horowitz, Ethnic
Groups in Conflict (Berkeley: University of California Press, 1985).
[31] G. Reuveni (ed) The
Economy in Jewish History: New Perspectives on the Interrelationship Between Ethnicity and Economic Life (Berghahn, 2011).
[32] I. Light & S. J. Gold,
Ethnic Economies (Bingley: Emerald, 2000).
[33] R. Silverman, Doing
Business in Minority Markets (New York: Garland, 2000).
[34] E. Bonacich, The Economic
Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980),
22.
[35] W. Zenner, "American Jewry
in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 13.
[37] M. D. Meyerson, A Jewish
Renaissance in Fifteenth-Century Spain (Princeton: Princeton University Press, 2010), 111.
[38] N. Roth, Medieval Jewish
Civilization: An Encyclopedia (New York: Routledge, 2003),
[39] J. Hillaby, "Jewish Colonisation
in the Twelfth Century," in P. Skinner (ed), The Jews in Medieval Britain: Historical, Literary, and Archaeological Perspectives
(Woodbridge: Boydell Press, 2003), 36.
[40] F. Schmeider, "Various
Ethnic and Religious Groups in Medieval German Towns? Some Evidence and Reflections," in, Segregation, Integration, Assimilation:
Religious and Ethnic Groups in the Medieval Towns of Central and Eastern Europe (Burlington: Ashgate, 2009), 15.
[41] Joseph Pérez, History
of a Tragedy: The Expulsion of the Jews from Spain (Chicago: University of Illinois Press, 2007), 60.
[42] R. W. Dorin, Banishing
Usury: The Expulsion of Foreign Moneylenders in Medieval Europe, 1200 -- 1450 (Harvard PhD dissertation, 2015); R. W. Dorin, "Once
the Jews have been Expelled," Intent and Interpretation in Late Medieval Canon Law," Law and History Review , Vol. 34, No.
2 (2016), 335-362.
[43] G. Langmuir, History,
Religion, and Antisemitism (Los Angeles: University of California Press, 1990), 304.
Sowell’s A Conflict of Visions has nothing to say about race, but it and its successors pretty much nail what is wrong
with today’s progressives. And it’s the same as what was wrong with yesterday’s progressives.
If we survive 2020, this volume will be what he’s remembered for.
The Zionist thinkers understood the unnatural and dangerous situation of the Jews in the Diaspora, and seized the first opportunity
to re-reform the Jewish people as a normal nation in its homeland. In only one generation, all the Jewish communities in the Eastern
lands liquidated their affairs and joined movement. The same with the powerful Russian and Ukrainian communities, they moved (mostly)
to Israel. Last year, about 30,000 American Jews gave up their precious citizenship and moved to Israel. I foresee in two generations
a more or less Jew-less America. What I am saying is that the Jews do not like their middleman foreigner status. In Marx etc.
time there were no alternatives. Now there is Israel. Some 55% of the Jews have already moved there.
Israel is the largest producer and host of international online gambling sites, while making it illegal for its own citizens
to use such sites
It should be noted that Monaco does the same thing with its gambling casinos. It has long been unlawful for Monaco’s own Monégasque
citizens to enter into those casinos to gamble.
Also, the ultra-high level of Jewish involvement in pornography sales is another relevant area here.
One of those Jewish pornography-meisters was Jimmy ‘Jimbo’ Wales, afterwards recruited to head the CIA-Mossad Wikipedia, where
paedophilic persons have been able to persistently post fake biographies of themselves and smears against their victims. Jimmy
Wales has attended birthday parties of Israeli Presidents, and received a $1 million ‘prize’ from Tel Aviv University.
The most obvious merit of middleman minority theory is that, like Kevin MacDonald’s theory of a group evolutionary strategy,
it places an unusual and welcome emphasis on rational resource competition as the basis for social conflict involving certain
minorities. By offering a socio-economic explanation for hostility toward Jews, middleman minority theory represents a unique
space within academia where the otherwise ubiquitous “pure prejudice” idea that host hostility is self-generated (from psychological
problems or cultural traditions) is summarily and comprehensively dismissed.
The Jews like to cast themselves as “just another struggling minority trying to make it among the oppressive majority.” This
ignores the international Zionist (Jewish supremacist) agenda, and the pathological Jewish drive for totalitarian control.
Where does that drive originate? Jesus of Nazareth, apparently Hebrew, preached the opposite, and called organized Jewish hypocrisy,
greed, corruption and double standards “the Synagogue of Satan.” Of course, the corrupt Jewish Moneychangers (the Jewish establishment
of his era) in bed with the Roman Empire didn’t like that one bit, and so instigated his murder. When the cosmopolitan Hebrew
mob, prompted by the corrupt Jewish establishment, chose the criminal Barabbas over Jesus, the Jews made their choice for ideological
evil and corruption.
That is a choice they affirm time and again, day after day, year after year, century after century.
Whether one wants to read this decision as a cosmic moral judgement on the Jews, or simply as a rational economic decision
by the Jews (choosing systematic corruption and shady insider back room deals over honest work) makes no difference. They chose
the path they chose, and they affirm that decision every day through their corrupt, criminal and murderous international Zionist
works.
One doesn’t have to be a Christian to wear the Jon Carpenter sunglasses from The Live which allow one to see that the Judeo-Imperial
“ruling class are [social] aliens concealing their appearance and manipulating people to spend money, breed, and accept the status
quo with subliminal messages in mass media,” but it helps.
One doesn’t have to be a Christian to know that Jewish infiltrated Empires working in concert with a corrupt establishment
are bad news, but again, it helps.
In Britain Jews are clearly influential but the Norman ruling class has had it’s grip on the UK ever since they landed here
in 1066, indeed William the Conqueror was mentioned in the article above, he certainly had his uses for Jews, there is little
information available though as to just how many Jews arrived and what lead King William 1 to bring them over with his troops.
As of present much of inner London is owned by aristocratic families who can trace their descent to King Williams troops
Also a considerable proportion of high status people in Britain were educated at just a few private schools including a great
deal of our present government
In Britain it is often a case of who you know, not what you know that determines whether you will reach the top of society
or not, compared to other European countries like Germany and Finland in Britain there is a tendency for the higher classes to
promote people on the basis of whether they have a background in common with them rather than merit, just like the Jews.
When I was going to university there, the corner stores were all Chinese. As were the Laundromats. I suspect the children all
became doctors and lawyers and graduated from the need to continue operating them.
As per usual, Andrew Joyce demonstrates that he is an objective social scientific historian by flooding his article with a
preponderance of documentable verifiable factual data.
However, to my mind there is one ‘word’ in this 8,000+ word tour de force; one very important word that all lovers of Western
history and culture dedicated to the perpetuation of that history and culture should focus on … one word: ‘NATION’!
At the very top of his essay Joyce quotes Voltaire:
“Voltaire concluded that, some surface similarities aside ,
‘It is certain that the Jewish nation is the most singular that the world has ever seen.
’ ”
Similarly he quotes Bruno Bauer:
“The base [of the tenacity of the Jewish national spirit ] … the character of that [Jewish] nation.
..”
Some say Jews are a ‘ race’ , some say they are an ‘ethnicity’, some say they are a ‘religion’. The case
can be and is made for all these, in Voltarie’s words, “surface similarities” . However, none capture the essence of what
constitutes the basis for Jewish POWER.
Jews are a worldwide profoundly unified ideological NATION. And that ideological unity is the basis of their national power.
This unity was succinctly captured in an interview with a Mossad agent when he said:
“I can knock on the door of any Jew in the world and I will be invited in.”
Ideological unified nations are powerful nations, and are conquers. The Jews are one of the most ideologically unified nations
in the world. The power derived from that unity has allowed them to conquer the most economically and militarily powerful country
in the world – America.
Further, by conquering America, the wealthiest and most powerful country in Western Civilization, the Jews have de facto conquered
the whole of the West.
Ideological unified nations are strong.
Ideological dis-unified nations are weak.
So call ‘Color Revolutions’ are manifestations of dis-unified nations who in turn are weak and conquerable by strong unified nations.
We have seen numerous weak nation color revolutions in Africa, Middle East and Europe. Now we are experiencing an American
color revolution.
The American ‘color revolution’ is the Jewish nation delivering the ‘coup de grace’ to America and the West.
Andrew Joyce, your articles are so God-damned good!
Jewish behavior reminds me of narcissism: sense of entitlement, self-centered, feeling of superiority, manipulative and deceitful
behavior, desire for power and control, will suck a host dry, and once they’ve gotten what they want, will easily discard the
host. Highly competitive, status-oriented.
Don’t dare call them out on anything because that causes them to feel shame, and that’s like driving a stake through them.
They work behind the scenes, secretly. They must always be seen in a good light. They will smear and destroy you (your reputation,
your job, your life) if you expose them. They will retaliate in ways you would never be able to because they don’t have a conscience,
and this is why they win and are so hard to fight. Very vindictive. No qualms about lying or twisting the truth.
They are never content, always working to change things in their favor, to get the upper hand. Most people just want to live
their lives, so they acquiesce, but this is a mistake because one day you turn around to realize they now own the farm! If they
don’t get their way, they just regroup and come at you from another angle. They keep wearing you down, chipping away at you until
you give in. It is really something to behold because you just can’t believe their gall.
Their rabbis keep them in line by using fear (fear of the other), and fear is the greatest motivator/persuader. Keeps them
solidly as one. They’re constantly reminded of the Holocaust, the ovens that are lurking around every corner, as well as the injustices
they have suffered (through no fault of their own – ha!). Keeps them neurotic and they don’t stray.
@Oliver Elkington rville, Fitzroy,
Marshall, and Spencer. The Guardian , Independent and Telegraph wrote articles in 2011 and 2013 alleging such persons
still ‘run’ Britain. Lefties use this ploy to attack the Conservative Party whose members tend to be wealthy like champagne socialists.
Back to the point raised by neutral , none of the above mentioned newspapers would run similar stories on Jewry. That
is the litmus test of who really rules.
Despite being a tiny minority Jews have shaped modern Britain. This has been documented here by Joyce, Langdon and others.
Sure the middle man theory explains everything, but needs some footnotes:
-These middle men are specifically encouraged to cheat us, it’s written in their holy books
-they regard us as animals in human form, with either no souls or much lesser souls
-they regard us as having been created ONLY to serve them.
The modern industrial capitalist treats his workers impartially as economic instruments; he is as willing to exploit
his own son as he is a stranger. This universalism, the isolation of each competitor, is absent in middleman economic activity,
where primordial ties of family, region, sect, and ethnicity unite people against the surrounding, often individualistic economy.
The modern finance capitalist …..
Industrial capitalism after it was invented in the American Colonies, was characterized by injection of state capital (not
Jewish finance capital) into industry, to then improve the labor value of the population. American labor was in short supply relative
to the large land mass available.
Industrial Capitalist will treat his workers as valuable contributors, because their labor value is constantly being improved
upon by improved public health, and improved infrastructure such as roads and phone systems. Industrial Capitalist economic method
is to raise up the existing people, and not import low wage “coolie labor.”
The highest form of industrial capitalism was probably Germany, which adopted the American System through Frederick List.
Workers in industrial capitalist Germany had access to best facilities of that era, their work hours were made sensible (no
longer exploitative). Autobahns were built, and industry was built up using state capital (not finance capital) to high levels
of productivity.
Finance Capitalism is Jewish usury method. Finance Capitalism is middleman theory taken to extremes.
The middleman is a hidden string puller whose god is Moloch. The middleman is the third entity in man’s relations, usurping
the role of the King.
It is the King who is to have the role of settling disputes, dispensing with just law, and overseeing high civilization. It
is impossible to have high civilization with Jews operating as middlemen.
Finance capitalism’s big bang event is traced to Amsterdam’s Jews invading Britain.
1) Debt Spreading Private Banking .. the Bank of England in 1694. This event stripped the sovereign King of his money power
and transferred it to hidden bank stock owners.
2) Stock Market Capital. Absentee ownership of Companies. Hidden String Pullers control corporations, rather than the employees
of said companies. The first manifestation was both the Dutch and English India Companies.
3) Allowing Company stock to be on-sold into markets. The logic of prices and money (Moloch) is now tied to private banking
ledger credit entry. BOE creates the private bank credit that is used in “free markets.”
4) Corporation charters are now perpetual, and corporations are held up as being more than a god created human. Being perpetual
is more than being a human, where said human has a finite life span.
Jews are anti-logos, so everything they touch turns to shit. There is a religious and spiritual element to Jews, who are against
the natural order.
Virtually all of the “American System” politicians were assassinated. Countries that attempted to adopt “industrial capitalism”
of the American system were invaded and destroyed in world wars. The world wars were engineered in back room deals, using hidden
string pulling tactics.
America was turned in 1912, and is now under Jewish finance capitalism control. The founding fathers of America would be appalled
if they were alive today.
Hindus are like Jews–they love money and believe themselves to be a special people (as exemplified by your PM Modi and his
RSS buddies). Because of the caste system, Hindus barely tolerate lower caste Hindus.
This comment is aimed at Andrew Joyce, the writer of the article. Good job Andrew.
In addition to finance big bang event I discuss above, there was also the attack on Christianity. So the big bang event was
multi-dimensional, and informs today’s reality.
Here is your quote on Sombart:
For Sombart, the origins of the worst of modern capitalism can be found in the early middleman role of the Jews, their medieval
semi-nomadic quest for usury-derived profit and Victorian hawking of shoddy goods being a precursor to modern advertising and
the mass production of superfluous and quickly obsolete consumer products.
Here is another quote from Sombart, which I think is critical:
Werner Sombart in his book “The Jews and Modern Capitalism” came to an important conclusion.”That which is called Puritanism
is in reality Judaism.”
Our Jewish friends in Amsterdam created puritan Judeo-Christianity, which is a perversion of Jesus’ teachings. Jesus started
his mission on the Jubilee year, aiming precisely at the Pharisee class. Jesus also whipped the money changers, his only act of
violence.
Weber also has some problems in his non treatment of usury:
Max Weber’s book, “The Protestant Ethic and the Spirit of Capitalism,” created a split definition. Jewish capitalism on
one side, and Puritan (Calvanist) on the other. Jewish capitalism was speculative pariah capitalism, while Puritan was bourgeois
organization of labor. Weber excluded the problem of usury, thus obscuring what is necessary to see. The Puritan was excluded
from blame.
Let that sink for a moment. I think you understimate – as did I – just how radical this site and it’s owner are, as well as
the majority of the commenters, and just what they are tiptoeing around, and have been for some time. I also think within another
few years, their position will become explicit.
Incidentally, I argely agree that in a few decades most Jews will be flourishing in Israel, but I do think the US will always
have a large and prosperous Jewish community as well, forever. It isn’t going anywhere.
@Tom Verso th the surface of
JSI’s success that they rarely, if ever, see beheath that surface to what is obviously the real cancer of the human race. That’s
why what we’re witnessing today is nothing less than
The Pyrrhic Victory of Jewish Supremacy Inc.
For evidence look at the following:
City – New York
State – California
Country – The USA
Continent – Europe
Civilization – The West
They have conquered the above the way a tumor conquers a human organism.
He can’t – yet – express what he is really trying to say clearly and simply, he has to bury it in a thicket of dense verbiage
which is tedious to cut through.
In a few years, I think Unz will have developed to the point where writers like Joyce can make their point crystal clear in
simple language.
@AaronB e that they have developed
may eventually topple under its own weight, thereby liberating them from their tragic quest to find and hold external phantoms
responsible for their own traumas.
Clarity for Joyce would likely be something like “my father was mean, controlling and made me feel bad, he was always
trying to bring me low to make him feel big, I now need to heal to come to terms with it.”
Sorry Joyce that you feel bad. That’s real. Stop doing yourself the disservice of pretending your hurt is actually your concern
for the world or whatever. That is stupid.
Judaism is an ethnic/religious supremacist ideology that sees the rest as nothing more than cattle to be exploited, so according
to Jewish dogmas if you don’t declare the Jews to be your masters, you are technically anti-Semitic.
It wasn't Steele's MI-6 dodgy dossier ... the dirt on candidate Donald Trump was initiated
by Republican billionaires Paul Singer e.a. to get Bush III elected president ... failed so
the clan supported Rubio ... at last resort the dossier was "sold" to Democrats and HRC.
With some tweaks for technique, the same method bragged about by Bill Browder as "The
Hermitage Effect", and if truth be known, a similar method to those of venture capitalists
everywhere. Nobody has time to wait anymore for a company's stock to take off, and guess
right so that you are ahead of the curve – investors want to be rich nownownow, and
venture capitalists have learned you can make your own luck. Browder billed himself as an
'activist investor', because his claim was that he was actually doing the company a favour,
trying to help it succeed with western governance procedures and transparency and all that.
He would identify a company which he assessed was undervalued, and then begin a whisper
campaign against it – the bosses were on the take, lots of merchandise going out the
back door, cooking the books to conceal the losses, bla, bla, bla. The company's stock would
fall, and Hermitage would buy in when it felt the government's attention had been attracted
and it would try to save the company. Government investigation, some management changes and
maybe a government contract or some orders. Confidence returns, stock goes up, Browder rakes
in the cash and virtuously claims to have saved the company's bacon, when it was his
destabilizing efforts that made it shaky in the first place.
Singer is more like Richard Gere's billionaire capitalist in "Pretty Woman" – buying
up companies, busting them up, stripping off the salable assets and selling the husk; a
real-life example would be Mitt Romney.
Fewer care now about finding a cure for a wasting disease, or discovering a boundless
source of cheap and clean energy – the American Dream now is Getting Rich. Maybe it
always was – although I fancy I remember a bit more altruism, perhaps I am only
deluding myself with pleasant those-were-the-days fantasies. At any rate, corporations and
for-profit entities now seem much bolder about causing widespread ruin right out in the open,
and likewise seem to be rewarded for it by moving up the ranks of Most Profitable Companies,
which seems more and more the only measure of success.
If America did not have its giant military, there would be no reason to fear it, be wary
of offending it or even to pay very much attention to it. It is starting to slide over the
edge, but you still have to be cautious about its tail snaking up out of the pit and taking
you down with it.
Trump just changed the rules to let Wall Street's most predatory industry get its hands on hundreds of billions of dollars of
ordinary workers' retirement savings. Now his friends in private equity are celebrating.
If politics is the art of the sleight of hand, then Donald Trump is one of the deftest magicians of all time -- a master of creating
mesmerizing spectacles, while his minions quietly rob everything in sight. This David Copperfield routine has become so mundane we
are practically numb to it, but the trick Trump just pulled off for his billionaire pals was something particularly special -- it
could end up being one of the single biggest financial heists in history.
The Trump administration's new directive came just a few months after private equity billionaire Stephen Schwarzman -- who had
been pushing for the change -- poured $3 million
into a super PAC backing Trump's reelection bid.
While long-standing worker-protection regulations have prevented 401(k) plans from investing in high-risk private equity firms,
the letter now permits corporations to funnel that money to those firms, which charge notoriously giant fees.
Trump's administration argued that workers should feel fortunate and thankful that the administration will now let employers turn
their savings over to private equity barons.
"This information letter will help Americans saving for retirement gain access to alternative investments that often provide strong
returns," labor secretary Eugene Scalia said
in a statement announcing the new policy. "The letter helps level the playing field for ordinary investors and is another step
by the department to ensure that ordinary people investing for retirement have the opportunities they need for a secure retirement."
In practice, private equity firms will now be allowed to access -- and skim fees off of -- the
$9 trillion in 100
million workers' 401(k) plans and IRAs.
"If just 5 percent of the money in these retirement funds were available to private equity, it would be a windfall of $435 billion
-- real money even to private equity millionaires and billionaires,"
wrote Eileen Appelbaum of the Center for Economic and Policy Research (CEPR).
The Labor Department letter is the result of all that private equity influence -- and at a particularly opportune time. The
industry -- including
Partners Group -- has recently been fretting about a decline in fees during the COVID-19 pandemic. The letter offers the potential
for a bailout for the industry, paid for by millions of workers' retirement savings.
That said, this is not some temporary relief during a fleeting crisis -- this is the culmination of a long-term campaign by Schwarzman.
Six days after Trump was inaugurated, the Blackstone chief said that he had been dreaming of a president who would change the law
to let his firm make bank off workers' 401(k) savings.
"In life you have to have a dream," Schwarzman told analysts in
January 2017 , days after Trump's inauguration. "One of the dreams is our desire and the market's need to have more access at
retail to alternative asset products . . . A lot of people are not allowed to put those into retirement vehicles and other types.
And one of the interesting issues when you have a new government is whether they want to continue that type of prohibition or not.
Because what it's doing is denying people sort of a better retirement, and if there's a change in that area that becomes a huge opportunity
for the firm."
Like Shelley Levene's smarmy real-estate sales pitch in
Glengarry Glen Ross , Schwarzman's argument is that private equity offers ordinary Americans terrific untapped investment upside.
In his telling, workers have been unfairly deprived of these opportunities under the old laws -- and not surprisingly, both the Trump
Labor Department and some of the business press have credulously echoed that line.
"Everyday investors may soon be able to get a piece of private equity action," effused the lede of the New York Times
' report on the Labor Department letter, as if this is a sweet get-rich-quick opportunity for the average working man.
But only days after the change, a landmark
study was released, telling the real story of private equity.
The report by University of Oxford professor Ludovic Phalippou shows that in the last fifteen years, private equity firms generally
have not provided better returns to investors than low-fee stock index funds. In the process, a handful of private equity firms and
their executives have raked in roughly $230 billion in fees from investors like public pension funds and university endowments.
"This wealth transfer might be one of the largest in the history of modern finance: from a few hundred million pension scheme
members to a few thousand people working in private equity," Phalippou concludes.
Politicians have enabled this redistribution.
In Washington, federal lawmakers have
preserved a tax loophole
that allows private equity moguls to classify their winnings as capital gains rather than income, thereby paying far lower tax rates
than ordinary workers.
Meanwhile, in states and cities, local officials have continued to
direct more and more of government workers' pension savings to politically connected private equity firms. Those officials have
been hoping that private equity investments would produce outsize returns that might forestall tax hikes necessary to raise revenue
and fund the pension benefits promised to public-sector workers. But overall, those returns were not significantly better than the
stock market, and they came with giant fees.
In its letter, the Trump administration actually acknowledged some of these pitfalls of private equity investments, noting that
they involve "more complex, and typically, higher fees." But that wasn't enough to stop the Labor Department from shoving millions
of unwitting workers and retirees into private equity's maw just a few years after
Blackstone
and other major private equity firms were sanctioned
by regulators for fleecing investors.
The Quest for Dumb Money
The private equity industry is hardly short on cash -- the industry was sitting on roughly
$1.5 trillion of undeployed capital at the end of 2019. The reason the Labor Department letter is so important to the industry
is because 401(k)s and IRAs represent a particular kind of capital that private equity firms love -- so-called
"dumb money."
Unlike a share of publicly traded stock whose price is the same for all investors, a private equity investment's fees can vary
widely from investor to investor. Private equity firms are therefore always eager to find investors willing to accept the highest
possible fees. "Dumb money" refers to such investors -- entities like pension funds, 401(k) plans, and university endowments that
are pools of other people's money directed by officials with no personal skin in the investment decisions.
Wall Street sees these funds as "dumb" -- and particularly lucrative -- because the officials negotiating on retirees' or universities'
behalf may not drive as hard a bargain on fees and terms as, say, an individual billionaire or an insurance company trying to protect
its cash reserves.
This wiggle room with dumb money can be enormously lucrative for private equity firms: a recent
study by Stanford and Harvard researchers
found that had public pensions all received the same private equity fee rates, they "would have earned nearly $45 billion more on
their investments."
In other words: that is $45 billion of earnings that could have gone to retirees, but instead went to private equity firms and
other wealthy investors because pension fund managers didn't secure better fees and terms.
That part about "other unobserved investors" is key -- private equity firms explicitly say in their
SEC filings that they can and will offer different investors different fees and terms on the exact same investments. It is a
situation that has caused
some retirees to wonder whether their dumb money is being used to pad the profits of smarter, politically connected investors
who negotiate better terms in the same private equity investments.
Now that Trump's Labor Department has opened the floodgates, a lot more money could end up flowing into these opaque deals, enriching
private equity executives and their friends -- while leaving workers'
meager retirement savings even further depleted.
End Mark
David Sirota is editor-at-large at Jacobin . He edits the Too Much Information newsletter and previously served as a senior
adviser and speechwriter on Bernie Sanders's 2020 presidential campaign. You can subscribe to David Sirota's newsletter "Too Much
Information" here . Andrew Perez contributed research to this
story.
Private equity is essential a mafia style business: they aid to blled thier victim dry.
Notable quotes:
"... By the end of 2018, available cash was so tight that Prospect got a $41 million infusion from Leonard Green and members of its management, according to Moody's. The ratings firm downgraded Prospect deeper into junk last year at B3, citing "shareholder-friendly policies" and the higher leverage resulting from the $457 million dividend. ..."
"... Meanwhile, care quality ratings for seven of the 10 Prospect hospitals evaluated by the Centers for Medicare and Medicaid Services, or CMS, have declined since 2016, according to HMP Metrics, a health-care facility analytics service. CMS ranks facilities from 1 to 5 stars, with 5 being the best. ..."
"... Most Prospect hospitals sit at the bottom rungs of quality assessments, according to the agency's hospital comparison database. Nine have a two-star rating or below, placing them in the lowest 30% of rated hospitals, according to CMS data. Just one Prospect-owned hospital -- Roger Williams Medical Center in Rhode Island -- earned a three-star rating. ..."
"... "Private equity owners, seeking high returns, may be even more willing to cut costs in crucial ways than even other for-profit health care companies," she said in an interview. ..."
"... How much of this is virtue signalling by Mitt Romney and others of the elite? Is he willing to disgorge himself of the the hundreds of millions he took from Americans through his company Bain? ..."
These far right social conservatives lost yesterday and they don't even realize it. Mitt
Romney marched with BLM. Mitt is no radical on social issues (he certainly is on. Taxes on
the rich) you won't convince a single one of these hard right wing people that systemic
racism is real, even when you give examples like the North Carolina Republican Party
disenfranchising blacks "with surgical precision" or the direct evidence of the commenter
Dukeboy who states he is a retired police officer and is obviously a white supremacists. But
you don't need to convince them of anything. This is the same group who would have been
against the civil rights protests in the '60's. They aren't needed to create a massive
change.
The hubris to think that your feelings of guilt would be meaningful to black people is off
the charts.
"My local school has been underfunded for generations due to the property tax funding system
and redlining but Karen feels bad about it so all is right with the world!"-Said no black
person ever.
How much of this is virtue signalling by Mitt Romney and others of the elite? Is he
willing to disgorge himself of the the hundreds of millions he took from Americans through
his company Bain?
How much? 100% of it. Romney is a vicious corporate raider who has destroyed countless
jobs and by extension, lives. How many suicides have followed in the wake of Bain's corporate
takeovers? When Romney lived in Belmont, MA, he and his wife petitioned the town to not allow
ambulances to go down their street with sirens on. Seriously.
"... "I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations..." ..."
"I understand that people are angry, but they shouldn't just endanger businesses without
even a thought to enriching themselves through leveraged buyouts and across-the-board
terminations..."
"Look, we all have the right to protest, but that doesn't mean you can just rush in and
destroy any business without gathering a group of clandestine investors to purchase it at a
severely reduced price and slowly bleed it to death," said Facebook commenter Amy Mulrain,
echoing the sentiments of detractors nationwide who blasted the demonstrators for not hiring
a consultant group to take stock of a struggling company's assets before plundering.
" I understand that people are angry, but they shouldn't just endanger businesses without
even a thought to enriching themselves through leveraged buyouts and across-the-board
terminations.
It's disgusting to put workers at risk by looting. You do it by chipping away at their
health benefits and eventually laying them off. There's a right way and wrong way to do this.
"
At press time, critics recommended that protestors hold law enforcement accountable by
simply purchasing the Minneapolis police department from taxpayers.
So not only ambulance service was destroyed by private equity, they now added other specialties. I wonder is those criminals who
insert unnecessary stents in patients are connected to private equity.
Images removed
Notable quotes:
"... "You can't serve two masters. You can't serve patients and investors" ..."
"... Morganroth's defense of pandemic Botox might seem odd, but it made perfect sense within the logic of the U.S. health-care system, which has seen Wall Street investors invade its every corner, engineering medical practices and hospitals to maximize profits as if they were little different from grocery stores. At the center of this story are private equity firms, which saw the explosive growth of health-care spending and have been buying up physician staffing companies, surgery centers, and everything else in sight. ..."
"... But some doctors say that the private equity playbook, which involves buying companies, drastically cutting costs, and then selling for a profit -- the goal is generally to make an annualized return of 20% to 30% within three to five years -- creates problems that are unique to health care. "I know private equity does this in other industries, but in medicine you're dealing with people's health and their lives," says Michael Rains, a doctor who worked at U.S. Dermatology Partners , a big private equity-backed chain. "You can't serve two masters. You can't serve patients and investors." ..."
"... Yet over the past decade, lawyers devised a structure that allows investors to buy a medical practice without technically owning it: the MSO, or management service organization. Today, when an investment firm buys a doctor's office, what it's actually buying are the office's "nonclinical" assets. In theory, physicians control all medical decisions and agree to pay a management fee to a newly created company, which handles administrative tasks such as billing and marketing. ..."
"... Businessweek ..."
"... When individual doctors sell, they generally receive $2 million to $7 million each, with 30% to 40% of that paid in equity in the group. After the acquisition, doctors get a lower salary and are asked to help recruit other doctors to sell their practices or to join as employees. ..."
"... Patients, for the most part, are in the dark. Unlike when your mortgage changes hands, you usually aren't notified when a big investment firm buys your doctor. Sometimes the sign on the door bearing the physician's name stays put, and subtle changes in operations or unfamiliar fees may be the only clues that anything has happened. ..."
"... At Advanced Dermatology & Cosmetic Surgery , the largest private equity-backed group in the field, with more than 150 locations across the U.S., that sense of discomfort came shortly after Audax Group bought a controlling stake in what was then a much smaller chain in 2011. The new management team introduced a scorecard that rewarded offices with cash if they met daily and monthly financial goals, according to a lawsuit filed in 2013 against the company by one of its dermatologists. The doctor alleged that the bonus program encouraged staff to do as many procedures as possible, rather than strictly addressing patients' medical needs. ..."
"... Most dermatologists use outside labs and pathologists, but private equity-owned groups buy up existing labs and hire their own pathologists. Then doctors are encouraged to refer patients within the group and send biopsy slides to the company-owned labs, keeping the entire chain of revenue in-house. ..."
"... Now comes the cost-cutting. This is supposed to be the hallmark of private equity, and, done right, it can work to the benefit of doctors and patients. But there are pitfalls unique to medicine, where aggressive cuts can lead to problems, some of them merely inconvenient and some potentially dangerous. ..."
"... A doctor at Advanced Dermatology says that waiting for corporate approvals means his office is routinely left without enough gauze, antiseptic solution, and toilet paper. Even before the great toilet paper shortage of 2020, he would travel with a few rolls in the trunk of his car, to spare patients when an office inevitably ran out. The company declined to comment. ..."
"... One paradox of the Covid-19 pandemic has been that even as the virus has focused the entire country on health care, it's been a financial disaster for the industry. And so, while emergency room doctors and nurses care for the sick -- comforting those who would otherwise die alone, and in some cases dying themselves -- private equity-backed staffing companies and hospitals have been cutting pay for ER doctors. These hospitals, like the big medical practices, make a large portion of their money from elective procedures and have been forced into wrenching compromises. ..."
"... For investors with capital, on the other hand, the economic fallout from the virus is a huge opportunity. Stay-at-home orders have left small practices more financially strained than they've ever been. That will likely accelerate sales to private equity firms, according to Marc Cabrera, an investment banker focused on health-care deals at Oppenheimer & Co. Independent doctors or groups that previously rebuffed offers from deep-pocketed backers "will reconsider their options," he says. ..."
"... Many doctors may ultimately come to regret cashing out, but it's hard to get out once you're in. As part of an acquisition, the private equity groups typically require doctors to sign yearslong contracts, with noncompete clauses that prevent them from working in the surrounding area. ..."
Not long after Gavin Newsom, the governor of California, ordered the state's 40 million residents to stay home to stop the spread
of the new coronavirus, Dr. Greg Morganroth called his team of doctors and said their dermatology group was staying open.
Morganroth is chief executive officer of the California Skin Institute
, which he founded in 2007 as a single office in Mountain View. He's since expanded to more than 40 locations using a financing
strategy that's become exceedingly common in American health care: private equity. In this case, he took out a loan from
Goldman Sachs Group Inc. that could eventually convert to an
equity stake. CSI is now the largest dermatology chain in California.
But the Covid-19 pandemic
put Morganroth in a precarious position. Most medical procedures were characterized as
nonessential by government officials and practitioners. Doctors were closing offices, and patients were staying away to limit
their potential exposure to the virus.
CSI took a different approach. Morganroth explained his thinking on April 2 in a Zoom call with more than 170 dermatologists from
around the country organized by the Cosmetic Surgery Forum, an industry conference. Contrary to what they might have heard, Morganroth
told them, they should consider staying open during the pandemic. "Many of us are over-interpreting guidelines," he said.
For a moment there was an awkward silence. Doctors had thought they were signing up for advice on how to apply for
government money that would help them meet payroll while they were shut down; they hadn't expected to be told not to shut down
at all. Morganroth continued: "We are going to be in a two-year war, and we need to make strategic plans for our businesses that
enable us to survive and to rebound."
Back at CSI, the company's front-office staff was working the phones, calling patients in some of the worst-hit areas and reminding
them to show up for their appointments, even for cosmetic procedures such as Botox injections to treat wrinkles. During the videoconference,
Morganroth argued that offering Botox in a pandemic wasn't so different from a grocery store allowing customers to buy candy alongside
staples.
"If I had a food supply company and had to stay open, and I had meat, bread, and milk, would I stop making lime and strawberry
licorice?" Morganroth asked. "I would make everything and go forward."
From a public-health point of view, some of the doctors believed, this was questionable. Common reasons for visiting a dermatologist's
office -- skin screenings, mole removals, acne consultations -- aren't particularly time sensitive. Serious matters, such as suspected
cancers and dangerous rashes, can be handled, at least initially, with
telemedicine consultations . Then doctors can weigh the risks for their patients and determine who needs to come in. In a statement,
CSI says that it followed local and state laws for staying open, while providing "necessary care" for patients, and that it had not
required doctors to come to work.
"You can't serve two masters. You can't serve patients and investors"
Morganroth's defense of pandemic Botox might seem odd, but it made perfect sense within the logic of the U.S. health-care system,
which has seen Wall Street investors invade its every corner, engineering medical practices and hospitals to maximize profits as
if they were little different from grocery stores. At the center of this story are private equity firms, which saw the explosive
growth of health-care spending and have been buying up physician staffing companies, surgery centers, and everything else in sight.
Over the past five years, the firms have invested more than $10 billion in medical practices, with a special focus on dermatology,
which is seen as a hot industry because of the aging population. Baby boomers suffer from high rates of two potentially lucrative
conditions: skin cancer and vanity. Some estimates suggest that private equity already owns more than 10% of the U.S dermatology
market. And firms have started to expand into other specialties, including women's health, urology, and gastroenterology.
There's nothing inherently wrong with any of this. But some doctors say that the private equity playbook, which involves
buying companies, drastically cutting costs, and then selling for a profit -- the goal is generally to make an annualized return
of 20% to 30% within three to five years -- creates problems that are unique to health care. "I know private equity does this in
other industries, but in medicine you're dealing with people's health and their lives," says Michael Rains, a doctor who worked
at
U.S. Dermatology Partners , a big private equity-backed
chain. "You can't serve two masters. You can't serve patients and investors."
Investment firms, and the practices they fund, say these concerns are overblown. They point out that they're giving doctors a
financial shelter from the rapidly changing medical environment, a particularly attractive prospect now, and that money from private
equity firms has expanded care to more patients. But they've also made it next to impossible to track the industry's impact or reach.
Firms rarely announce their investments and routinely subject doctors to nondisclosure agreements that make it difficult for them
to speak publicly. Bloomberg Businessweek spoke to dozens of doctors at 10 large private equity-backed dermatology groups.
Those interviews, along with information obtained from other employees, investors, lawyers, court filings, and company records, reveal
how the firms operate, and why they sometimes fail patients.
The process is never exactly the same, but there are familiar patterns, which tend to play out in five steps.
Step 1: Marriage
The strange thing about private equity money in medicine is that for-profit investors have long been prevented from buying doctor's
offices. Corporate ownership goes against a doctrine set by the American Medical
Association , the main trade group for doctors in the U.S., and is prohibited by law in many states, including Texas and New
Jersey. For most of the past 100 years, if you wanted to make money on a medical practice, you needed to have a medical license.
Yet over the past decade, lawyers devised a structure that allows investors to buy a medical practice without technically owning
it: the MSO, or management service organization. Today, when an investment firm buys a doctor's office, what it's actually buying
are the office's "nonclinical" assets. In theory, physicians control all medical decisions and agree to pay a management fee to a
newly created company, which handles administrative tasks such as billing and marketing.
In practice, though, investors expect some influence over medical decision-making, which, after all, is connected to profits.
"When we partner with you, it's a marriage," said Matt Jameson, a managing director at BlueMountain Capital, a $17 billion firm that
recently invested in a women's health company, while speaking at a conference in New York in September. "We have to believe it. You
have to believe it. It's not going to be something where clinical is completely not touched." (When contacted by Businessweek
, Jameson asked to clarify his comments. "Doctors and other qualified healthcare professionals at the providers we've invested
in make medical decisions," he said in a statement.)
The typical buyout starts with the acquisition of a big, popular practice, often with multiple doctors and several locations,
for as much as $100 million. (Investors typically pay between 9 and 12 times annual profit.) This practice functions as an anchor,
like a name-brand department store at a shopping mall, attracting patients and doctors to the new group as it expands. Then comes
the roll-up: The private equity firm purchases smaller offices and solo practices, giving the group a regional presence.
As part of the new structure, investors deal with paperwork and save money by buying medical supplies in bulk. Crucially they
also negotiate higher insurance reimbursement rates. One dermatologist who sold her practice to the California Skin Institute says
she was surprised to find out the bigger group's payouts from insurers were $25 to $125 more per visit.
When individual doctors sell, they generally receive $2 million to $7 million each, with 30% to 40% of that paid in equity in
the group. After the acquisition, doctors get a lower salary and are asked to help recruit other doctors to sell their practices
or to join as employees.
At first, doctors are generally thrilled by all of this. They have financial security and can focus on treating patients without
the stress of running a business. Patients, for the most part, are in the dark. Unlike when your mortgage changes hands, you usually
aren't notified when a big investment firm buys your doctor. Sometimes the sign on the door bearing the physician's name stays put,
and subtle changes in operations or unfamiliar fees may be the only clues that anything has happened.
Step 2: Growth
The promise of more patients is a big draw for doctors. By sharing marketing costs and adding locations, the new companies can
advertise more and attract customers. Private equity-owned practices have been diligent users of social media, announcing newly added
doctors and posting coupons on Twitter and Instagram. But these practices can be aggressive in ways that make some doctors uncomfortable.
At Advanced Dermatology & Cosmetic Surgery , the largest
private equity-backed group in the field, with more than 150 locations across the U.S., that sense of discomfort came shortly after
Audax Group bought a controlling stake in what was then a
much smaller chain in 2011. The new management team introduced a scorecard that rewarded offices with cash if they met daily and
monthly financial goals, according to a lawsuit filed in 2013 against the company by one of its dermatologists. The doctor alleged
that the bonus program encouraged staff to do as many procedures as possible, rather than strictly addressing patients' medical needs.
In some of the company's Florida offices, the doctor alleged, medical assistants responded to the bonus structure by ticking extra
boxes on exam reports, stating that doctors checked many more areas of the body than they actually had. That led to higher patient
bills, defrauding the government under its Medicare program, according to the lawsuit. The federal government declined to join the
case, and it was dismissed about a year after it was filed. Advanced and Audax declined to comment.
One-Stop Skin Care
By buying up labs and adding specialists, private equity-owned dermatology groups get paid at every step of a patient's treatment.
Data: Estimated Medicare reimbursement rates for the Miami area, Sensus Healthcare sales presentation
Private equity-backed practices also try to increase revenue by adding more-lucrative procedures, according to doctors interviewed
by Businessweek . In dermatology, this means more cosmetics, laser treatments, radiation, and especially Mohs surgeries
-- a specialized skin cancer procedure that removes growths from delicate areas like the face and neck one layer at a time, to limit
scarring. The surgery involves expensive equipment and specialized doctors, so some large medical groups keep costs down by assembling
traveling Mohs teams, who fly in from other states. Others create mobile labs in vans that set up in clinics' parking lots.
Most dermatologists use outside labs and pathologists, but private equity-owned groups buy up existing labs and hire their own
pathologists. Then doctors are encouraged to refer patients within the group and send biopsy slides to the company-owned labs, keeping
the entire chain of revenue in-house. This takes advantage of a regulatory quirk that has made dermatology, and a handful of other
specialties, attractive to private equity. Under the 1989 Stark Law, doctors aren't allowed to make patient referrals for their own
financial gain. An exception was made for some fields because it's more convenient for patients, explains Dr. Sailesh Konda, a Mohs
surgeon and professor at the University of Florida. "But that can be abused."
Step 3: Synergy
Now comes the cost-cutting. This is supposed to be the hallmark of private equity, and, done right, it can work to the benefit
of doctors and patients. But there are pitfalls unique to medicine, where aggressive cuts can lead to problems, some of them merely
inconvenient and some potentially dangerous.
A doctor at Advanced Dermatology says that waiting for corporate approvals means his office is routinely left without enough gauze,
antiseptic solution, and toilet paper. Even before the great
toilet paper shortage of 2020, he would travel with a few rolls in the trunk of his car, to spare patients when an office inevitably
ran out. The company declined to comment.
At the country's second-biggest skin-care group, U.S. Dermatology
Partners , a former doctor says a regional manager switched to a cheaper brand of needles and sutures without consulting the
medical staff. The quality was so poor, she says, they would often break off in her patients' bodies. Mortified, she'd have to dig
them out and start over. She complained to managers but couldn't get better supplies, she says. Paul Singh, U.S. Dermatology's CEO,
says the company uses a "reputable, global vendor for medical supplies." "While our group may have standardized purchasing processes,
individual providers have the autonomy to procure specific supplies that they need for a particular patient situation or patient
population," he says in a statement.
Doctors who join a private equity-backed group generally sign contracts that state they'll never have to compromise their medical
judgment, but some say that management began to intervene there, too. Dermatologists at most of the companies say they were pushed
to see as many as twice the number of patients a day, which made them feel rushed and unable to provide the same quality of care.
Others were forced to discuss their cases with managers or medical directors, who asked the doctors to explain why they weren't sending
more patients for surgery. Multiple practices also encouraged doctors to send home Mohs surgery patients with open wounds and have
them come back the next day for stitches -- or to have a different doctor do the closure the same day -- because that would allow
the practice to collect more from insurers.
That's if doctors are performing the procedures at all. At Advanced Dermatology, several doctors say they were asked to claim
that physician assistants, or PAs, were under their supervision when they weren't seeing patients in the same building, or even the
same town. Because PAs are paid less than dermatologists, this allowed the company to keep costs low while growing the business.
In a statement, Eric Hunt, Advanced's general counsel and chief compliance officer says that having PAs on staff enables the company
to "provide access to quality dermatological care to more patients."
Step 4. Rolling Up the Roll-Up
Advanced Dermatology was sold in 2016 by Audax to Harvest
Partners LP , following a pattern that's typical in the industry. At some point, after costs have been cut and profits maximized,
most private equity-owned medical groups will be sold, often to another private equity firm, which will then try to somehow make
the company even more profitable.
Having reduced most of the obvious costs, Advanced Dermatology began skimping on more important supplies, including Hylenex, according
to doctors and other employees. The drug is an expensive reversal agent used when cosmetic fillers, which are supposed to make skin
look plumper, go wrong. Not having enough is dangerous: Patients who get an injection that inadvertently blocks a blood vessel can
be left with dead sections of skin or even go blind if they don't get enough Hylenex in a matter of hours. The company says that
it stocks Hylenex in every office that performs cosmetic procedures, and that it "has no records of any provider being denied an
order for this medication."
Advanced Dermatology also started giving even more authority to PAs, according to doctors and staff. Without enough oversight
some were missing deadly skin cancers, they say. Others were doing too many biopsies and cutting out much larger areas of skin than
necessary, leaving patients with big scars. Doctors who complained about the bad behavior say they saw PAs moved to other locations
rather than fired or given more supervision. Hunt, the company's lawyer, says that all PAs get six months of training and are supervised
by experienced doctors.
The staff coined a new medical diagnosis, "pre- pre- pre-cancer"
Advanced Dermatology also put more pressure on doctors to send biopsies to in-house labs. The move made sense financially, but
some of the doctors didn't trust the lab. One of its two pathologists in Delray Beach, Fla., Steven Glanz, had a history of misdiagnosing
benign tumors, which led patients to undergo surgeries that were later found to be unnecessary, according to doctors who worked with
him. Dermatologists who warned that Glanz was a danger to patients say that their complaints to Dr. Matt Leavitt, the group's founder
and CEO, were ignored. More procedures, doctors knew, brought in more money.
Glanz, who had been with the practice since its early days, was known to read slides under a microscope with a pistol on his desk.
After he was arrested with a handgun, a folding knife, and a vial of methamphetamine crystals, he was fired and Florida's state medical
board fined him $10,000, requiring him to complete a five-hour course on ethics before he could resume practicing. But his former
colleagues were unsettled; they knew Glanz's signature was on years of reports that determined treatment for patients. Some slides
were reevaluated, and pathologists noticed mistakes. Managers told some doctors and their staff that patients, even those who'd been
misdiagnosed and had unnecessary procedures, were not to be told. Glanz pleaded guilty to stalking and a firearms violation and was
sentenced to probation. When a reporter called his office and identified herself, the receptionist hung up. Further attempts to reach
Glanz were unsuccessful. Advanced's Hunt says that he was "formally released from employment three years ago," but did not comment
further.
Of course, some doctors pushed ethical boundaries long before private equity came into the picture. But critics of the industry,
including doctors and investors, say management teams put in place by private equity firms tend to look the other way as long as
a medical practice is profitable. Of the dermatologists with the highest biopsy rates in the country (between 4 and 11 per patient,
per year), almost 25% were affiliated with private equity-backed groups, according to Dr. Joseph Francis, a Mohs surgeon and data
researcher at the University of Florida.
Medical providers may have also been blurring ethical lines at U.S. Dermatology Partners, which was until recently on its second
private equity owner, Abry Partners LLC . At four of the
company's offices in Texas, a doctor and his PAs were doing more biopsies than necessary, according to employees. These employees
say the staff routinely called patients with benign lichenoid keratosis, small brownish blotches that usually go away on their own,
and told them the growths should be removed. Under instruction from the doctor, the staff coined a new medical diagnosis, "pre- pre-
pre-cancer," and then talked patients into coming in for removal, employees say. Singh, the U.S. Dermatology CEO, says that the company
trusts doctors to make the right decisions and that it monitors them through routine audits.
Step 5: Sell-Off
In some cases the cost-cutting either becomes impossible or leads to compromises in care too obvious to ignore. In 2016 a
DermOne LLC office in Irving, Texas, had been using a faulty
autoclave machine to sterilize surgical equipment -- the state and county health departments identified 137 patients that needed
to get tested for blood-borne diseases such as HIV and hepatitis. By 2018, DermOne's backer, Westwind Investors, wanted out.
Westwind had been one of the earliest firms to build a big dermatology business -- with practices in five states -- but others
had grown larger. After the debacle in Irving, the Nevada-based firm sold DermOne's medical records and patient lists, as well as
some of its offices, to other groups. It dissolved the remaining offices, leaving some patients abruptly without care. Westwind did
not respond to repeated requests for comment. Two other private equity-backed groups, TruDerm and Select Dermatology LLC, have also
gone out of business in the past two years.
The surviving chains have been saddled with large piles of debt they're now struggling to repay. In January, U.S. Dermatology
Partners defaulted on a $377 million loan, meaning the private equity backer, Abry Partners, had to hand over the keys to its lenders,
Golub Capital ,
Carlyle Group , and
Ares Management , which will now oversee a chain with almost
100 locations, receiving 1 million visits from patients a year. Abry did not respond to requests for comment .
For the medical groups that make it, the game plan is to eventually sell to the largest players, such as
KKR ,
Blackstone Group , and
Apollo Global Management . Pioneering investors, including Audax,
are now buying practices in other fields -- a concerning development to critics who note that the areas that are currently attracting
investment, such as urology, generally involve more invasive procedures. Should doctors performing vasectomies be thinking about
the dollar-rate returns for KKR -- or any private investor?
"It's ultimately going to backfire," says Dr. Jane Grant-Kels, a veteran dermatologist and professor at the University of Connecticut
School of Medicine. "There's a limit to how much money you can make when you're sticking knives into human skin for profit."
One paradox of the Covid-19 pandemic has been that even as the virus has focused the entire country on health care, it's been
a financial disaster for the industry. And so, while emergency room doctors and nurses care for the sick -- comforting those who
would otherwise die alone, and in some cases
dying themselves
-- private equity-backed staffing companies and hospitals have been
cutting pay for ER doctors. These hospitals, like the big medical practices, make a large portion of their money from elective
procedures and have been forced into wrenching compromises.
For investors with capital, on the other hand, the economic fallout from the virus is a huge opportunity. Stay-at-home orders
have left small practices more financially strained than they've ever been. That will likely accelerate sales to private equity firms,
according to Marc Cabrera, an investment banker focused on health-care deals at Oppenheimer & Co. Independent doctors or groups that
previously rebuffed offers from deep-pocketed backers "will reconsider their options," he says.
Many doctors may ultimately come to regret cashing out, but it's hard to get out once you're in. As part of an acquisition, the
private equity groups typically require doctors to sign yearslong contracts, with noncompete clauses that prevent them from working
in the surrounding area.
As governors throughout the nation ease restrictions on businesses, Advanced Dermatology is opening its most profitable offices
first. The company received an undisclosed sum under the Cares Act, as part of the government relief package intended for health-care
workers. Hunt, Advanced's chief compliance officer, told employees in an email earlier this month that the money would be used for
protective gear, such as masks, and to replace "millions of dollars" in lost revenue.
The group had closed most of its offices since the stay-at-home orders were issued in March, cutting pay for doctors and furloughing
staff. With cities and states beginning to consider reopening, doctors and PAs say they've been told they should be prepared for
a full schedule. Hunt says the company is following the appropriate safety measures, but employees fear it will be nearly impossible
to keep patients apart in waiting rooms. Opening in a reduced capacity, they understand, is not an option.
Pro-Samsung media outlets in South Korea came under fire from Jewish groups after
utilizing anti-Semitism to belittle Singer.
"Elliott is led by a Jew, Paul E. Singer, and ISS [an advisory firm that analyzed the
merger] is an affiliate of Morgan Stanley Capital International (MSCI), whose key
shareholders are Jewish. According to a source in the finance industry, Jews have a robust
network demonstrating influence in a number of domains," the South Korean financial
publication MoneyToday said last week.
Meanwhile, Mediapen, another local publication, asserted that "Jews are known to wield
enormous power on Wall Street and in global financial circles" and that it is a "well-known
fact that the US government is swayed by Jewish capital."
Jewish money, it reported, "has long been known to be ruthless and merciless."
(Bloomberg) -- Legendary short-seller Jim Chanos said he's troubled that private equity is
seeking financial aid from the federal government due to the economic impact of the coronavirus
epidemic.
"'I'm a little bemused, puzzled and somewhat outraged, I guess, that private equity would be
pushing to the front of the line to try to get taxpayer assistance," he said in an interview
Thursday on Bloomberg Television.
The Federal Reserve's move Thursday to throw a lifeline to small and mid-sized businesses
and fund the purchases of some types of high-yield bonds has has been seen by some market
participants as helping the private equity firms who owns some of these companies. Those firms
earlier this week were dealt a setback in their attempt to gain access to billions of dollars
of loans that the U.S. government is doling out to help businesses hit hard by the pandemic,
Bloomberg reported.
Chanos said a look at the year-end letters for the four biggest publicly-traded private
equity firms showed they had more than $300 billion in dry powder to put to use.
"I think private equity is possibly at a crossroads similar to where hedge funds were post
the global financial crisis," said Chanos, who runs hedge fund Kynikos Associates. "People are
going to start to judge the high fees and the illiquidity and think: 'Am I really getting the
return commensurate for the risk?"
For more articles like this, please visit us at bloomberg.com
Even if
they aren't exactly certain how the business model works,
Twitter blue checks and the rest of the mainstream media - having been whipped into an
anti-banker fervor by Bernie Sanders and the last glowing embers of Occupy - never pass up an
opportunity to kick private equity in the nuts.
And if there's one industry where private equity has done the most to directly harm American
public, it's health care.
Envision's Colorado headquarters
During the latter part of the Democratic primary campaign, Bernie Sanders and Elizabeth
Warren primed the pump by extolling the evils of private equity to the public every chance they
got, helping impress the term into the memory banks of legions of twentysomethings how the
industry had contributed to America's health-care crisis, along with a multitude of other
societal ills. Now, with the world in the grip of an unprecedented crisis, the industry is
about to get pilloried once again - but this, much, much bigger than before, we suspect - as
private equity-backed health-care companies, loaded down from their LBO debt binges, are forced
to make cutbacks including slashing pay for doctors and nurses in the middle of a pandemic that
has already killed nearly 9,500 Americans.
And now the KKR-backed Envision Healthcare Corp., one of the biggest medical providers
backed by private equity, is poised to become the poster-child for Wall Street greed as it
informs hundreds of doctors in its employ will not be receiving the bonus checks they had been
expecting in April. Though we suspect this isn't a complete surprise, the cuts will deprive
hundreds of doctors of roughly one-third of their total comp during an already extremely
difficult time for them and their families. The company has promised to repay them at a later
date once their financial situation has improved.
The move risks igniting a blowback that could make KKR one of "the most hated companies in
the world. Just ask Martin Shkreli.
But the reason the company's financial position is so poor in the first place is because
Envision carries more than $7 billion of debt. This debt was amassed during what was, according
to data compiled by
Bloomberg , the third-largest health-care LBO ever.
In a statement, Envision said it's "100% focused" on saving lives during this crisis, even
though its business (ambulatory surgical centers and medical staffing) shrank more than 75% in
two weeks, Bloomberg said. With so many Americans hiding at home and fearful of entering
hospitals and doctor's offices, people are delaying elective and non-emergency care at
unprecedented rates.
"We are on the front lines caring for patients during this unprecedented public health and
economic crisis," the Nashville, Tennessee-based company said. "Envision Healthcare is 100
percent focused on saving lives and sustaining the nation's fragile health-care system. The
safety net we provide for millions of patients must remain fully intact for when we get to
the other side of this national crisis."
Like many companies, Envision completely drew down its two credit lines to provide financial
flexibility in recent weeks (apparently it didn't listen to Larry Kudlow and Mnuchin). The
company spends about $1.5 billion on compensation for physicians quarterly, an insider
reportedly told BBG. The company has about $140 million to $150 million in debt payments due in
the next two weeks, according to Mike Holland of Bloomberg Intelligence, and has $650 million
of cash on its balance sheet. It has warned investors that it might need to raise more
financing if circumstances continue to deteriorate.
The biggest problem for KKR, is that some of the physician groups are planning to sue the
company; litigation could draw unwanted attention to KKR at a time when public anger is
dangerously high.
But as the 'cockroach' theory suggests, Envision isn't alone: The boom in LBOs (part of the
binge on corporate debt that also fueled the surge in buybacks) left many companies, especially
in the health-care space, where many companies were built via a series of costly mergers and
acquisitions.
New York Federal Reserve Bank announced Monday it will increase its daily injections of cash
into financial markets by $50 billion to $150 billion as a protective step amid #coronavirus
epidemic.
I see your tangible assets bet and raise another $50 billion per day of presto digitizer
created out of thin air fiat.
Because I CAN!
Now what are you going to do about it huh?
If you crash our ponzi scheme, who are you going to sell your oil and gas to?
That said, in periods of past extreme economic turmoil folks like Steve Mnuchin, with the
trophy British wife, aka The King of Foreclosure, made out like bandits. He's now duce
Trump's Secretary of the Treasury. The prior Republican standard bearer, the Mitt, was also a
Vulture who participated in the hollowing out of the American Industrial Heartland, for
profit.
A life long con man and grifter coupled up with a Jewish vulture capitalist leading a
phony charge to Make America Great Again...?
A script that writes itself.
Sadly..the supposed opposition are also beholding to AIPAC, and it's dictates.
Chuck Schumer says he was appointed by God to be the Guardian of Israel. It's true, and
confirmation is available on the web.
Is he an American or an Israeli? No one should be allowed to be both, should they? Am I
right or wrong?
Why just look at the good ole boys Netanyahu's very good friend , Tabloid Star and huckster
about town the donald to see who is really the Bossman of Murika's gun toting Patriots.
Pretty sad really when you think about it. A Country that ravaged it's indigenous people
to break the land open for settlers of European descent, only to have it fall into the
clutches of a tiny tribe of foreigners who never put skin the game and came in with their
gangsterism and were always about accumulation of wealth and power for themselves.
Welcome to America, haven for the Gangs of New York and Grifters about town.
by Helen
Buyniski , RT A notorious hedge-funder who's left a trail of broken companies (and
countries) in his wake has set his sights on ousting Twitter's Jack Dorsey. Users complaining
about new features should know the platform may never be the same. Elliott Management,
euphemistically called an "activist investor" by timid media who fear its legendary
founder Paul Singer, has reportedly snapped up a four percent ($1 billion) stake in Twitter,
nominating four directors to its board as the start of a bid to oust Dorsey. The hedge fund
supposedly resents the CEO dividing his attentions between Twitter, Square, and a six-month
move to Africa, believing Twitter is capable of churning out bigger profits. Like any good
hedge fund – so the narrative goes – they just want the value of the company to
increase (stock jumped seven percent on the news).
What this coverage leaves out – and what makes Twitter's plight more than the usual
business scrap – is Singer's history. A major Republican donor and huge booster for
Israel, he's also a notoriously ruthless businessman who embodies "vulture capitalism,"
leaving a trail of asset-stripped companies and even a few economically-ruined countries in his
wake over his insanely profitable career. Media coverage of Singer's interest in Twitter has
gone to great lengths to present his interest in the platform as "
strictly business-related ," however, and some conservatives have even gotten excited
by the thought that the neocon Singer will end the ideologically-motivated censorship they
claim to experience on the platform – but nothing could be further from
reality.
Here come the vultures
Fox News' Tucker Carlson profiled Elliott Management's strategy in December thus: "Buy a
distressed company, outsource the jobs, liquidate the valuable assets, fire middle management,
and once the smoke has cleared, dump what remains to the highest bidder, often in Asia."
Amid the financial crash of 2008, Elliott, with other hedge funds, acquired distressed US auto
parts supplier Delphi, took billions in bailout money from the Obama government (a transaction
the president's "auto-czar" compared to "extortion" ), then offloaded so many
jobs overseas that 25 factories were forced to close, putting tens of thousands of union and
white-collar workers out on the street, as well as slashing pensions. Elliott Management made
over $1 billion from the deal
.
When Singer's fund sinks its teeth into its prey, it does not let go, and most victims have
learned to give up and hope for a quick death. When Elliott bought an 11 percent stake in
outdoors retailer Cabela's, it began pushing for a sale of what was then a profitable company.
The management so feared Singer that it sold within a year, sending stock prices through the
roof but putting almost 2,000 people out of their jobs, setting off a downward spiral that,
Carlson says, "destroyed" Cabela's hometown of Sidney, Nebraska, whose residents feared
to even speak about the hedge funder on camera four years later. AT&T similarly ran for its
life when Singer's fund bit off a $3.2 billion stake of the company in September, acquiescing
to several demands within a month (and there's still time for the rest).
Those who don't acquiesce are guaranteed to suffer. After Elliott Management bought up a
chunk of its debt, the country of Argentina defaulted, holding out for 15 years on Singer's
attempts to collect. A 13-year legal battle ensued, during which Singer's fund seized an
Argentine naval ship to prove they were serious about getting paid. Then-president Cristina
Fernandez denounced the "Vulture Lord," but her replacement, Mauricio Macri, finally
agreed in 2016 to pay up – just in time for the threat of another
debt default .
Peru and Congo have similarly felt the sting of Elliott Management's tactics, having their
distressed debt snapped up and then weaponized against them in court. And even when Singer
doesn't win, his opponents lose. Korean electronics giant Samsung was able to fight off his
takeover efforts when he tried to block a move by the Lee family to consolidate their holdings,
but the bitter battle ended in a five-year prison sentence for company head Jay Y. Lee on
bribery
charges and the impeachment of South Korean president Park Geun-hye.
the
ideologically-motivated vultures, that is
Singer's corporate interests overseas don't stop at outsourcing to cut costs, however. He
founded an organization called Start-Up Nation Central to facilitate the transfer of huge
chunks of the US tech industry to Israel. The initiative seeks to counter the Boycott,
Divestment and Sanctions movement by making Israel essentially boycott-proof, and Singer has
accordingly used his billions to
push American tech firms into Israel – Microsoft, Google, Facebook, Amazon, and Apple
all have research and development centers there as of 2016. If he gets control of Twitter, the
company's US employees may be surprised to find their replacements speaking Hebrew, not
Chinese.
As for the conservatives who think Singer will defend them from Twitter censorship? Singer
was a hardcore anti-Trumper in 2015, backing Florida Senator Marco Rubio and funding the
prototype of the notorious Steele dossier. Former Trump campaign strategist Steve Bannon "
declared
war " on the billionaire in 2017 upon learning of his involvement. While Singer
financially backs Trump now, journalist Philip Weiss and others have suggested the hedge funder
"cut a deal with Trump on Israel," offering his support in exchange for Trump going
all-in on "protecting" the Jewish State.
Singer is the second-largest donor to the bloodthirsty think tank Foundation for Defense of
Democracies and also supports JINSA and the American Enterprise Institute – all
dyed-in-the-wool neocon groups cheerleading for war with Iran as they did in Iraq. If Trump's
"America-first" base thinks Singer is going to fight for their free speech on Twitter,
they're about to get a rude awakening. Anti-war voices on both sides of the spectrum will
likely find the censorship intensified to the point where they long for the days of mere shadow
banning.
Battle of the billionaires
Dorsey is prepared to stand and fight – for now. He announced on Thursday he'd put his
plans to live in Africa for six months on hold, supposedly due to the coronavirus epidemic.
Meanwhile, Dorsey's fellow tech tycoon Elon Musk has
pledged to help him fight the takeover, tweeting his support on Monday, and Twitter
employees pledged their support with the #webackjack hashtag.
Twitter users complaining about the "Snapchatization" of their beloved platform
should realize they're looking at something quite a bit more serious than the rollout of an
unpopular feature. Twitter, despite its numerous flaws, remains a vital communication channel
for many. Whatever lies ahead for the platform – a stripped-down MySpace-esque husk, a
megaphone for the never-Trump wing of the GOP, another addition to Israel's Silicon Wadi
– only one thing can be certain: it will be profitable for Elliott Management.
Subscribe to RT newsletter to
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"... The Centers for Disease Control and Prevention (CDC) is not billing patients for coronavirus testing, according to Business Insider . "But there are other charges you might have to pay, depending on your insurance plan, or lack thereof," Business Insider noted. "A hospital stay in itself could be costly and you would likely have to pay for tests for other viruses or conditions." ..."
"... Congress needs to immediately pass a bill appropriating funding to cover 100% of the cost of all coronavirus testing & care within the United States. We will not have a chance at containing it otherwise. @tedlieu - as my rep, can you please ensure this is brought up? ..."
"... In the case of the Wucinskis, Kliff reported that "the ambulance company that transported [them] charged the family $2,598 for taking them to the hospital." ..."
"... Last week, the Miami Herald reported that Osmel Martinez Azcue "received a notice from his insurance company about a claim for $3,270" after he visited a local hospital fearing that he contracted coronavirus during a work trip to China. ..."
"... Did anyone expect the unconscionable greed of capitalism to cease when a public health crisis emerges? This is just testing for the virus, wait until a vaccine has been developed so expensive that the majority of the US populace can not afford it at all and people are dropping like flies. Wall Street, never-the-less, will continue to have its heydays ..."
"... The very idea that the defense and "Homeland" security budgets are bloated and additional funding approved year after year but the citizens of this country are not afforded 100% health coverage In a time of global health crisis that could become a pandemic. ..."
"Huge surprise medical bills [are] going to make sure people with symptoms don't get tested. That is bad for everyone." by
Jake Johnson, staff writer Public health
advocates, experts, and others are demanding that the federal government cover coronavirus testing and all related costs after several
reports detailed how Americans in recent weeks have been saddled with exorbitant bills following medical evaluations.
Sarah Kliff of the New York Times
reported Saturday
that Pennsylvania native Frank Wucinski "found a pile of medical bills" totaling $3,918 waiting for him and his three-year-old daughter
after they were released from government-mandated quarantine at Marine Corps Air Station in Miramar, California.
"My question is why are we being charged for these stays, if they were mandatory and we had no choice in the matter?" asked Wucinski,
who was evacuated by the U.S. government last month from Wuhan, China, the epicenter of the coronavirus outbreak.
"I assumed it was all being paid for," Wucinski told the Times . "We didn't have a choice. When the bills showed up, it was just
a pit in my stomach, like, 'How do I pay for this?'"
The Centers for Disease Control and Prevention (CDC) is not billing patients for coronavirus testing,
according
to Business Insider . "But there are other charges you might have to pay, depending on your insurance plan, or lack thereof,"
Business Insider noted. "A hospital stay in itself could be costly and you would likely have to pay for tests for other viruses or
conditions."
Lawrence Gostin, a professor of global health law at Georgetown University, told the Times that
"the most important rule of public health is to gain the cooperation of the population."
"There are legal, moral, and public health reasons not to charge the patients,"
Gostin said.
Congress needs to immediately pass a bill appropriating funding to cover 100% of the cost of all coronavirus testing & care
within the United States. We will not have a chance at containing it otherwise.
@tedlieu - as my rep, can you please ensure this
is brought up?
In the case of the Wucinskis, Kliff reported that "the ambulance company that transported [them] charged the family $2,598
for taking them to the hospital."
"An additional $90 in charges came from radiologists who read the patients' X-ray scans and do not work for the hospital," Kliff
noted.
The CDC declined to respond when Kliff asked whether the federal government would cover the costs for patients like the Wucinskis.
The Intercept 's Robert Mackey
wrote
last Friday that the Wucinskis' situation spotlights "how the American government's response to a public health emergency, like trying
to contain a potential coronavirus epidemic, could be handicapped by relying on a system built around private hospitals and for-profit
health insurance providers."
We should be doing everything we can to encourage people with
#COVIDー19 symptoms to come forward.
Huge surprise medical bills is going to make sure people with symptoms don't get tested. That is bad for everyone, regardless
of if you are insured. https://t.co/KOUKTSFVzD
Play this tape to the end and you find people not going to the hospital even if they're really sick. The federal government
needs to announce that they'll pay for all of these bills https://t.co/HfyBFBXhja
Last week, the Miami Herald reported
that Osmel Martinez Azcue "received a notice from his insurance company about a claim for $3,270" after he visited a local hospital
fearing that he contracted coronavirus during a work trip to China.
"He went to Jackson Memorial Hospital, where he said he was placed in a closed-off room," according to the Herald . "Nurses
in protective white suits sprayed some kind of disinfectant smoke under the door before entering, Azcue said. Then hospital staff
members told him he'd need a CT scan to screen for coronavirus, but Azcue said he asked for a flu test first."
Azcue tested positive for the flu and was discharged. "Azcue's experience shows the potential cost of testing for a disease
that epidemiologists fear may develop into a public health crisis in the U.S.," the Herald noted.
Sen. Bernie Sanders (I-Vt.), a 2020 Democratic presidential candidate, highlighted Azcue's case in a tweet last Friday.
"The coronavirus reminds us that we are all in this together," Sanders wrote. "We cannot allow Americans to skip doctor's visits
over outrageous bills. Everyone should get the medical care they need without opening their wallet -- as a matter of justice and
public health."
Last week, as Common Dreams
reported , Sanders argued that the coronavirus outbreak demonstrates the urgent need for Medicare for All.
The coronavirus reminds us that we are all in this together. We cannot allow Americans to skip doctor's visits over outrageous
bills.
Everyone should get the medical care they need without opening their wallet -- as a matter of justice and public health.
https://t.co/c4WQMDESHU
The number of confirmed coronavirus cases in the U.S.
surged by more than two
dozen over the weekend, bringing the total to 89 as the Trump administration continues to
publicly downplay the severity of the outbreak.
Dr. Matt McCarthy, a staff physician at NewYork–Presbyterian Hospital,
said
in an appearance on CNBC 's "Squawk Box" Monday morning that testing for the coronavirus is still not widely available.
"Before I came here this morning, I was in the emergency room seeing patients," McCarthy said. "I still do not have a rapid
diagnostic test available to me."
"I'm here to tell you, right now, at one of the busiest hospitals in the country, I don't have it at my finger tips," added
McCarthy. "I still have to make my case, plead to test people. This is not good. We know that there are 88 cases in the United
States. There are going to be hundreds by middle of week. There's going to be thousands by next week. And this is a testing issue."
Our work is licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feel free to republish and share widely.
Did anyone expect the unconscionable greed of capitalism to cease when a public health crisis emerges? This is just testing
for the virus, wait until a vaccine has been developed so expensive that the majority of the US populace can not afford it at
all and people are dropping like flies. Wall Street, never-the-less, will continue to have its heydays
A wall street bank or private predator may own your emergency room. A surprise bill may await your emergency treatment above
insurance payments or in some instances all of the bill.
An effort was made recently in congress to stop surprise billings but enough dems joined repubs to kill it. More important
to keep campaign dollars flowing than keep people alive.
fernSmerl 12h I know emergency rooms are being purchased by organizations like Tenet (because they are some of
the most expensive levels of care) and M.D.s provided by large agencies. I'm not as up on this as I should be but a friend of
mine tells me that some of this is illegal. I have received bills that were later discharged by challenge. This is worth investigating
further. Atlasoldie 11h Hmmmm A virus that
overwhelmingly kills the elderly and/or those with pre-exisitng conditions.
Sounds like a medical insurance companies wet dream. As well as .gov social security/medicare wet dream.
The very idea that the defense and "Homeland" security budgets are bloated and additional funding approved year after year
but the citizens of this country are not afforded 100% health coverage In a time of global health crisis that could become a pandemic.
And as has been stated, the unconscionable idea suggested that a possible vaccine (a long way away or perhaps not developed at
all) might not be affordable to the workers who pay the taxes that fund the government? That's insane.
Another example of "American Exceptionalism." China doesn't charge its coronavirus patients, neither does South Korea. I guess
they are simply backward countries.
I own my own home after years of hard work paying it off. It's the only thing of value, besides my old truck, that I have.
If I get the virus, I will stay home and try to treat it the best I can. I can't afford to go to the hospital and pay thousands in
medical bills, with the chance that they'll come after my possessions. America, the land of the _______. Fill in the blank. (Hint:
it's no longer free).
There are other ways to protect your home. Homesteading or living trust. I'm not good at this but I know there are ways to
do it. Hopefully, it would never come to that but outcomes are not certain even with treatment in this case.
As someone
who lost a mother at 5 years old I can sympathize with your grief in losing a daughter-in-law and especially seeing her four children
orphaned. However, I think you miss the point here: This is about we becoming a society invested in each others welfare and not a
company town that commodifies everything including the health and well being of us all.
As a revision it is better but flawed. It is a cost containment bill based on the same research as the republican plan with global
budgets and block grants.
Edited: I encourage you to read this: -ttps://www.rand.org/blog/2018/10/misconceptions-about-medicare-for-all.html Giovanna-Lepore10h oldie:
Part D
Higher education is not free but they do need to become free for the students and payed by us as a society.
Part D is a scam, a Republican scam also supported by corporate democrats because of its profit motive and its privatization
Medicare only covers 80% and does not cover eye and dental care and older folks especially need these services. Medicaid helps but there are limits and one cannot necessarily use it where one needs to go.
Expanded, Improved Medicare For All is a vast improvement. because it covers everyone in one big pool and, therefore, much more dignified
than the rob Paul to pay peter system we have.
Social Security too can be improved. Why should it simply be based on the income of the person which means that a person working
in a low paying job in a capitalist system gone wild with greed will often work until they die.
Pell grants can be eliminated when we have what the French have: publicly supported education for everyone.
The demise of unions certainly did not help but it was part of the long strategy of the Right to privatize everything to the enrichment
of the few.
The overall competence that Canada is handling this outbreak, compared to the USA, is stark. First world (Canada) versus third-world
(USA). Testing is practically available for free, to any suspect person, sick or not, as Toronto alone can run 1000 tests a day and
have results in 4 hours. That is far more than all the US's capacity for 330 million people.
I wonder how long before Canada closes its borders to USAns? Me and my wife (both in a vulnerable age/medical group) should seriously
consider fleeing to my brother's place in Toronto as the first announced cases in Pittsburgh are probably only days away. What about
our poor cat though? We could try to smuggle her across the border, but she is a loud and talkative kitty
Don't want to discourage anyone from any protective measures – but the
"low down" from my veggie store today was that a lot of health professionals
shop there and they think it's being hyped by media. Did get this from my NJ Sen. Menendez –
Center for Disease and Control and Prevention (CDC)
There is currently no vaccine to prevent coronavirus disease 2019 (COVID-19). The best way to prevent illness is to avoid being
exposed to this virus. However, everyday preventive actions can help prevent the spread of respiratory diseases:
Wash your hands often
Avoid close contact with people who are sick.
Avoid touching your eyes, nose, and mouth.
Stay home when you are sick.
Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
For more information : htps://www.cdc.gov/coronavirus/2019-ncov/about/prevention-treatment.html
How it spreads : The virus is thought to spread mainly from person-to-person. It may be possible that a person can get
COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their
eyes, but this is not thought to be the main way the virus spreads. [Read more.] https://www.cdc.gov/coronavirus/2019-ncov/about/transmission.html )
Symptoms : For confirmed coronavirus disease 2019 (COVID-19) cases, reported illnesses have ranged from mild symptoms to
severe illness and death. Symptoms can include fever, cough, and shortness of breath.
Don't want to discourage anyone from any protective measures – but the
"low down" from my veggie store today was that a lot of health professionals
shop there and they think it's being hyped by media.
I agree it is being hyped by the media to the point of being fear mongering. At the same time it is being ignored by the administration to such an extent that really little almost nothing is being done. At some point the two together will create an even bigger problem.
It is like the old adage: "Just because you are paranoid doesn't mean they aren't out to get you." Each over/under reach in considering the reality of the situation has its own problem, which multiply when combined. Every morning when I wake up I say a little atheistic prayer to myself before I get out of bed: "Another day and for better or
worse...".
Well, two reported here in Florida tonight. One in my county, one in the county next door. And more of the "we already knew, but told you late". One person checked into the hospital on Wednesday. We hear it Monday night.
Both were ignored far a long time it seems, and 84 in particular are being watched (roommates, friends, hospital workers not alerted
for several days, the usual). But no one knows every place they had been since becoming infected.
Oh, and they have tested a handful of people. No worry?
I can't see anyway that this level of incompetency is an accident. Spring break is just starting usually a 100's of thousand tourist
bonanza.
So the question is do they want to kill us, or just keep us in fear?
I think the later. But the end result is a crap shoot. So once again, it is a gamble with our lives.
The business of America is business. Sometimes that can go too far and this is one of those times. Making money from the loss,
distress, harm and suffering of others is perverse beyond belief.
@NoseytheDuke
Lol.the fact that you looked and missed it.The devil is in the details.Joyce wrote.Mark green cheered on.I called bullshit
"Although Singer was initially anti-Trump, and although Trump once attacked Singer for his pro-immigration politics ("Paul
Singer represents amnesty and he represents illegal immigration pouring into the country"), Trump is now essentially funded
by three Jews -- Singer, Bernard Marcus, and Sheldon Adelson, together accounting for over $250 million in pro-Trump political
money. In return, they want war with Iran"
Know what this called. Extortion .Same as Zelensky and Ukraine ..but it is going to end badly, it has to.
"... If you want proof that private equity is predatory, you need go not further than its concerted efforts to extend and intensify the devastating practice of surprise billing. ..."
"... Physicians' groups, it turns out, can opt out of a contract with insurers even if the hospital has such a contract. The doctors are then free to charge patients, who desperately need care, however much they want. ..."
"... This has made physicians' practices in specialties such as emergency care, neonatal intensive care and anesthesiology attractive takeover targets for private equity firms . ..."
"... Emergency rooms, neonatal intensive care units and anesthesiologists' practices do not operate like an ordinary marketplace. Physicians' practices in these specialties do not need to worry that they will lose patients because their prices are too high. ..."
"... It's not only patients that are victimized by unscrupulous physicians' groups. These doctors' groups are able to coerce health insurance companies into agreeing to pay them very high fees in order to have them in their networks. ..."
If you want proof that
private equity is predatory, you need go not further than its concerted efforts to extend and
intensify the devastating practice of surprise billing.
Bad enough that patients develop
afflictions or have accidents that land them in the hospital. Recovering physically is hard
enough. But to then have the stress and financial damage of large and unexpected bills, which
are exercises in rent extraction, is the sort of thing that creates Madame DeFarges.
Private equity experts Eileen Appelbaum and Rosemary Batt did the sleuthing to document how
private equity has greatly extended and profited from this abuse. What most people do not
realize is the degree to which hospitals have outsourced what most people would assume were
core functions provided by doctors on the hospital's payroll, such as emergency room doctors.
With many large nominally not-for-profit hospital groups run by MBAs out to justify higher pay
packages for themselves, many practice areas are in fact outsourced. Private equity has
hoovered up these groups. They, and not the hospital, provide the personnel for a particular
case, and they make sure to get some out of network practitioners on the team to pad the
bills.
One metric: a Stanford study determined that the odds of getting a surprise bill had
increased from 32% in 2010 to 43% in 2016, and the average amount had risen over that time
period from $220 to $628. A new study in Health Affairs found that this out of network billing
raises health care costs by $40 billion per year .
Physicians' groups, it turns out, can opt out of a contract with insurers even if the
hospital has such a contract. The doctors are then free to charge patients, who desperately
need care, however much they want.
This has made physicians' practices in specialties such as emergency care, neonatal
intensive care and anesthesiology attractive takeover targets for private equity firms
.
Emergency rooms, neonatal intensive care units and anesthesiologists' practices do not
operate like an ordinary marketplace. Physicians' practices in these specialties do not need
to worry that they will lose patients because their prices are too high.
Patients can go to a hospital in their network, but if they have an emergency, have a baby
in the neonatal intensive care unit or have surgery scheduled with an in-network surgeon,
they are stuck with the out-of-network doctors the hospital has outsourced these services to
.
It's not only patients that are victimized by unscrupulous physicians' groups. These
doctors' groups are able to coerce health insurance companies into agreeing to pay them very
high fees in order to have them in their networks.
They do this by threatening to charge high out-of-network bills to the insurers' covered
patients if they don't go along with these demands. High payments to these unethical doctors
raise hospitals' costs and everyone's insurance premiums.
Appelbaum cited Yale economists who'd examined what happened when hospitals outsourced their
emergency room staffing to the two biggest players, EmCare, which has been traded among several
private equity firms and is now owned by KKR and TeamHealth, held by Blackstone:
.after EmCare took over the management of emergency services at hospitals with previously
low out-of-network rates, they raised out-of-network rates by over 81 percentage points. In
addition, the firm raised its charges by 96 percent relative to the charges billed by the
physician groups they succeeded.
The study also described how TeamHealth extorted insurers by threatening them with high
out-of-network charges for "must have" services:
in most instances, several months after going out-of-network, TeamHealth physicians
rejoined the network and received in-network payment rates that were 68 percent higher than
previous in-network rates.
California and the Federal government tried to pass legislation to curb surprise billing. As
we noted, the California bill was yanked suddenly and no one felt compelled to offer an
explanation. The bi-partisan Federal effort also failed.
Early in the summer of 2019, Congress appeared poised to protect consumers from surprise
medical bills and to hold insured patients financially harmless in situations where they were
unable to choose their doctor .
Two solutions, both of which take surprise charges to patients out of the equation, have
been put forward. Employers, patient advocates, and insurance companies favor paying
out-of-network doctors a rate "benchmarked" to rates negotiated with in-network doctors to
hold down health costs. Not surprisingly, this solution is opposed by large physician
staffing companies and specialist physician practices that want to continue to charge prices
higher than the in-network fees. These doctors' practices, some backed by private equity
firms, have been lobbying intensively for a second option that would allow doctors
dissatisfied with a negotiated rate to seek a higher fee via an arbitration process that they
believe will ensure higher physician pay and higher company revenues and profits.
The campaign by Physicians for Fair Coverage, a private equity-backed group lobbying on
behalf of large physician staffing firms, launched a $1.2 million national ad campaign in
July to push for this second approach.8 The lobbying campaign bore fruit. In July, [sponsors
of the House bill] Pallone and Walden accepted an amendment to allow arbitration, but only in
special cases, and it required the arbitrator to use negotiated rates instead of provider
charges when deciding on disputes over payment.9 But the private equity-owned physician
staffing companies were not satisfied. In late July, a mysterious group called Doctor Patient
Unity launched a $28 million ad and lobbying campaign (now up to nearly $54 million) aimed at
keeping any legislation to protect patients from surprise medical bills from passing. In
mid-September, a representative for Doctor Patient Unity finally revealed what many observers
already suspected -- that PE-owned doctor staffing firms Envision Healthcare and TeamHealth
were behind the campaign
Agreement on a joint House and Senate bipartisan bill by Senators Alexander and Murray and
Congressmen Pallone and Walden nearly made it into the omnibus continuing resolution that
passed in December 2019. It was stymied when Massachusetts Congressman Richard Neal, Chair of
the House Ways and Means Committee, offered a last-minute alternative. The Neal bill protects
consumers from surprise medical bills but requires disputes between providers and insurance
companies to be resolved through arbitration. This, of course, is what the PE-owned staffing
firms and the doctors' practices they own lobbied for. Lack of support from the Democratic
leadership in the Senate and the House delayed passage of the legislation. In his September
2019 fundraising report, Neal reported receipt of $29,000 from Blackstone, owner of
TeamHealth.
The entire article is
very much worth reading , since it offers more detail on how the private equity firms
tightened their grip on these chokepoints. And the threat of legal curbs has had an impact. As
the piece also explains, the value of the debt on Envision, the parent of EmCare, and
TeamHealth both fell into junk terrain and rebounded a bit when the bills were sidelined for
2019, but remains distressed:
Appelbaum and Batt are pessimistic that anything will get done in 2020:
In the current legislative session, Congress is again working to pass legislation to
protect patients from surprise medical bills. But the disagreements in Congress remain
unresolved Chances of a compromise bill emerging in this session of Congress do not look good
as of this writing (mid-February 2020), and relief for insured patients from unexpected
medical bills does not appear to be on the horizon.
However, bond investors clearly think there's still a risk of legislation with some teeth,
although the earliest possibility is 2021. Keep your fingers crossed.
Where I live the emergency room doctors are contracted out to a private group. This
has been the practice for over a decade. Recently the local hospital got rid of their
dialysis services by selling it to a private company. When a person is sick they don't think
about asking if the provider is in their network. They simply want treatment to help
recover.Another problem is in many areas there isn't a choice. Expensive services can have
only one or no providers. That means you have to go out of you area and probably your
network. I'm on medicare and chose to be on traditional medicare. You aren't locked into a
small network of providers. My supplemental is through my former employer. Unfortunately it's
network plan. Occasionally I have services not paid because they are out of network, even
though medicare covers 80%. The deductible for out of network is so high that I end up with
paying the 20%. I believe there is only one reason for network heart care. It's to increase
profits and has little to do with reducing costs.
I was thinking of Al Capone and his almost untouchable Chicago 'enterprise'. He was
untouchable in Chicago because his racket paid off the judges, prosecutors, aldermen, and
politicians. It took the feds stepping in to shut Capone down.
How many more people will go bankrupt, or avoid going to the doctor or hospital for
fear of bankruptcy because of this PE surprise billing racket? Several state leges are
passing or trying to pass legislation to block surprise billing.
I hope that you've been negotiating your out of network billings! A third or half
off may not be unreasonable. Heck, the hospital only collects about 25% of its total
billings!
This is one reason we need traditional M4A. Traditional Medicare has payment limits
that the provider has to accept if they bill Medicare. (Medicare fraud is a problem, but it
is tracked and prosecuted.)
Maybe I'm missing something, but offhand I don't see how this can even be a thing
under a single-payer health-care system. If someone knows better otherwise, please enlighten
me.
If I've got that much right, could this be another part of the motivation against
M4A?
Of course providers are all worried that compensations will be too meager and
oppressive. For instance if the docs' income expectations go unmet, then they will certainly
buck!
But the "providers," as in the MDs, are not the beneficiaries, or at least not much.
It's the companies that own the practices .which are owned by PE funds.
This reminds me of the TV ad running lately featuring a nice young couple opening
their cable bill and declaring "Its a ransom note!" as if its the height of comedy that we
are living in a kleptocracy where everyone is constantly subject to "your money or your life"
banditry we pretend were left behind in central park muggings of the 1970s.
I have recently had multiple occasions that I needed to write on patient
responsibility forms that out of network and balance billing is refused, followed with
letters citing applicable state laws and CMS contracts barring conduct in my state. It's
insane.
Still I have stacks of collection notices I must beat back and win every time. They only need
to win once to destroy someone. Have we no prisons?
The rapine and dispossession of late-stage American crapitalism (can we finally get
to End Stage?) always exceeds our worst expectations.
Crime-infested swamp of a country.
Dare we hope a movement can coalesce and endure after a decent man in his waning
years is thrust into an historical opportunity to move this train wreck from
disaster?
He's the community organizer Obama never was and the new dealer FDR never quite
was.
In the flatness of our current political terrain, Bernie's grandfatherly menscheism
makes him a moral colossus next to the sniveling careerists and the nefarious old
crassus.
1776, 1860, 1932, 1968. What will we make of this year?
Can you put the rebuttal into your own easily reproducible form? Either a neat page
to staple thoroughly to the bills (copied/printed in needed quantities) or a big rubber stamp
with blanks to fill in if applicable?
Yes, if you can provide it, I would make it a post. Your version with your state's
language and how to find similar language in other states. This is VERY important.
Note I have heard one reader say that their doctors said they wouldn't schedule the
surgery if she made an issue out of out of network MDs, that she needed to go elsewhere. So
those doctors were completely on board with this practice.
Doesn't mean that can't get a judgment against you! Then you spend the rest of your
life trying to avoid having people send money via Paypal or other services direct to your
bank account since they can take it. Or winning the lottery or buying a new car the list is
endless.
As in "Privatize Sovereignty, Socialize Property" by David Cieplay, Blackstone and
its ilk have this very business model. In this case they are buying up emergency room
doctors' practices – with the promise they will make more money – and passing the
cost on to insurance companies (poetic justice) and the state and federal gov. Because we
have no laws against this sort of corporate privateering (heaven forbid congress should
suddenly remember how and why to legislate), all the costs of health care are socialized and
because the PE funds are untouchable they have effectively privatized sovereignty. When we
all realize their useful function in this scam is one big nothing burger, congress will have
to act. It's just another testament to how venal, immoral, lazy and rotten congress is. I can
smell it from here.
Besides PE, it also makes sense that the real estate sector in general would be
opposed to anything that reduces financial burden (particularly anything that would lessen
medical debt) on middle- and lower-middle-income households, because foreclosures and
desperation fire sales would then dry up.
The law protects consumers from surprise medical bills when:
An enrollee goes to an in-network facility such as a hospital, lab or imaging center, but
services are provided by an out-of-network health provider.
An enrollee receives emergency services from a doctor or hospital that is not
contracted with the patient's health plan or medical group.
I've been a relatively healthy individual and so rarely use my insurance. I used it
for the first time in 20 years for a full yearly physical (just because it was "that time",
not for any health problems). The annual full checkup is, supposedly, fully covered, and I
chose a local clinic in my network.
The various clinics involved ended up billing me directly, so far, for over
$3500.00, and that was before the colonoscopy bill which still hasn't arrived. I checked my
Insurance Portal and, sure enough, the supposed covered charges were listed as
"Denied".
So, considering all these costs were supposed to be covered, I took a full day off
work (6 solid hours on various phone calls) to get it straightened out. While going through
all these bills and working through each charge I discovered 1 bill for a clinic appt (a
subsidiary of CVS) that never happened and 1 very high bill for standard blood tests (Quest)
that never happened due to a screwup initiated by the CVS-owned clinic. We'll see what
happens.
But while talking with one of the Insurance Co. reps she told me a classic surprise
billing horror story that happened to her. She gets occasional nosebleeds and one day got a
serious one while on the highway before her exit. A CHP officer pulled up behind her after
she pulled over to take care of the situation and refused to let her continue on without
going to the nearest Emergency Room, so she went.
Her visit lasted 1/2 hour. She was handed a bucket of clean water and a towel. After
cleaning up, she waited around for awhile, gave up waiting, washed the towel out, cleaned the
bucket out and left. She went on to tell me that 30 days later she recieved a bill from the
Emergency Services group at the hospital for $45,000.00. For a towel and a bucket of
water.
It took her two days of unpaid time off to get it straightened out and the bill
removed.
She then told me she's voting for Sanders, too.
So I've learned three lessons from this; 1) even with insurance things go wrong far
too often when it comes to billing issues, and 2) Surprise Billing is far more common than I
was led to believe, and 3) Health Insurance/care in this country is riddled with fraud and
outright criminality.
Hate to tell you, but with a colonoscopy, the exam is covered by Obamacare, but any
snipping of polyps is not, and that can easily run to $1000.
The US Is the only advanced economy where colonoscopies are recommended for everyone
over 50. In other countries, they are recommended only for people in high risk
groups.
If you get an annual ( and it needs to be annual ) fecal occult blood test
(easy and cheap, MD puts gloved finger in you, wipes test panel, and tells you right there),
the results in terms of detection are on par with colonoscopies.
"... These anecdotal stories about Invitation Homes being quick to evict tenants may prove to be the trend rather than the exception, given Blackstone's underlying business model. Securitizing rental payments creates an intense pressure on the company to ensure that the monthly checks keep flowing. For renters, that may mean you either pay on the first of the month every month, or you're out. ..."
Tucker could have done a number on Trump friend Schwarzman too.Mark my words you're gonna have another melt down now that all the people who
lost their home and ended up in rentals stop paying their rent that is now 2 1/2 times what
their mortgage was.
This is another fake bubble being securitized and sold off. Just like putting people into
houses with ARMs who couldnt afford them when the rates went up, Scharzman will fill up his
rentals to 99% occupancy with special deals to sell them to investors, when the special deal
period runs out and the rent goes up people will move out looking for cheaper housing and the
securities wont be worth shit.
Blackstone Group , CEO Stephen A. Schwarzman Buys Houses in Bulk to Profit from Mortgage
Crisis
You can hardly turn on the television or open a newspaper without hearing about the nation's
impressive, much celebrated housing recovery. Home prices are rising! New construction has
started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is
brewing.
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly
amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta,
brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed
investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit
by the economic meltdown.
Wall Street's foreclosure crisis, which began in late 2007 and forced more than 10 million
people from their homes, has created a paradoxical problem. Millions of evicted Americans
need a safe place to live, even as millions of vacant, bank-owned houses are blighting
neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution:
It's going to rent these foreclosed houses back to us. In the process, it's devised a new
form of securitization that could cause this whole plan to blow up -- again.
Since the buying frenzy began, no company has picked up more houses than the Blackstone
Group, a major private equity firm. Using a subsidiary company, Invitation Homes, Blackstone
has grabbed houses at foreclosure auctions, through local brokers, and in bulk purchases
directly from banks the same way a regular person might stock up on toilet paper from
Costco.
In one move, it bought 1,400 houses in Atlanta in a single day. As of November, Blackstone
had spent $7.5 billion to buy 40,000 mostly foreclosed houses across the country. That's a
spending rate of $100 million a week since October 2012. It recently announced plans to take
the business international, beginning in foreclosure-ravaged Spain.
Few outside the finance industry have heard of Blackstone. Yet today, it's the largest
owner of single-family rental homes in the nation -- and of a whole lot of other things, too.
It owns part or all of the Hilton Hotel chain, Southern Cross Healthcare, Houghton Mifflin
publishing house, the Weather Channel, Sea World, the arts and crafts chain Michael's,
Orangina, and dozens of other companies.
Blackstone manages more than $210 billion in assets, according to its 2012 Securities and
Exchange Commission annual filing. It's also a public company with a list of institutional
owners that reads like a who's who of companies recently implicated in lawsuits over the
mortgage crisis, including Morgan Stanley, Citigroup, Deutsche Bank, UBS, Bank of America,
Goldman Sachs, and of course JP Morgan Chase, which just settled a lawsuit with the
Department of Justice over its risky and often illegal mortgage practices, agreeing to pay an
unprecedented $13 billion fine.
In other words, if Blackstone makes money by capitalizing on the housing crisis, all these
other Wall Street banks -- generally regarded as the main culprits in creating the conditions
that led to the foreclosure crisis in the first place -- make money too.
An All-Cash Goliath
In neighborhoods across the country, many residents didn't have to know what Blackstone
was to realize that things were going seriously wrong.
Last year, Mark Alston, a real estate broker in Los Angeles, began noticing something
strange happening. Home prices were rising. And they were rising fast -- up 20 percent
between October 2012 and the same month this year. In a normal market, rising home prices
would mean increased demand from homebuyers. But here was the unnerving thing: the
homeownership rate was dropping, the first sign for Alston that the market was somehow out of
whack.
The second sign was the buyers themselves.
"I went two years without selling to a black family, and that wasn't for lack of trying,"
says Alston, whose business is concentrated in inner-city neighborhoods where the majority of
residents are African American and Hispanic. Instead, all his buyers -- every last one of
them -- were besuited businessmen. And weirder yet, they were all paying in cash.
Between 2005 and 2009, the mortgage crisis, fueled by racially discriminatory lending
practices, destroyed 53 percent of African American wealth and 66 percent of Hispanic wealth,
figures that stagger the imagination. As a result, it's safe to say that few blacks or
Hispanics today are buying homes outright, in cash. Blackstone, on the other hand, doesn't
have a problem fronting the money, given its $3.6 billion credit line arranged by Deutsche
Bank. This money has allowed it to outbid families who have to secure traditional financing.
It's also paved the way for the company to purchase a lot of homes very quickly, shocking
local markets and driving prices up in a way that pushes even more families out of the
game.
"You can't compete with a company that's betting on speculative future value when they're
playing with cash," says Alston. "It's almost like they planned this."
In hindsight, it's clear that the Great Recession fueled a terrific wealth and asset
transfer away from ordinary Americans and to financial institutions. During that crisis,
Americans lost trillions of dollars of household wealth when housing prices crashed, while
banks seized about five million homes. But what's just beginning to emerge is how, as in the
recession years, the recovery itself continues to drive the process of transferring wealth
and power from the bottom to the top.
From 2009-2012, the top 1 percent of Americans captured 95 percent of income gains. Now,
as the housing market rebounds, billions of dollars in recovered housing wealth are flowing
straight to Wall Street instead of to families and communities. Since spring 2012, just at
the time when Blackstone began buying foreclosed homes in bulk, an estimated $88 billion of
housing wealth accumulation has gone straight to banks or institutional investors as a result
of their residential property holdings, according to an analysis by TomDispatch. And it's a
number that's likely to just keep growing.
"Institutional investors are siphoning the wealth and the ability for wealth accumulation
out of underserved communities," says Henry Wade, founder of the Arizona Association of Real
Estate Brokers.
But buying homes cheap and then waiting for them to appreciate in value isn't the only way
Blackstone is making money on this deal. It wants your rental payment, too.
Securitizing Rentals
Wall Street's rental empire is entirely new. The single-family rental industry used to be
the bailiwick of small-time mom-and-pop operations. But what makes this moment unprecedented
is the financial alchemy that Blackstone added. In November, after many months of hype,
Blackstone released history's first rated bond backed by securitized rental payments. And
once investors tripped over themselves in a rush to get it, Blackstone's competitors
announced that they, too, would develop similar securities as soon as possible.
Depending on whom you ask, the idea of bundling rental payments and selling them off to
investors is either a natural evolution of the finance industry or a fire-breathing
chimera.
"This is a new frontier," comments Ted Weinstein, a consultant in the real-estate-owned
homes industry for 30 years. "It's something I never really would have dreamt of."
However, to anyone who went through the 2008 mortgage-backed-security crisis, this new
territory will sound strangely familiar.
"It's just like a residential mortgage-backed security," said one hedge-fund investor
whose company does business with Blackstone. When asked why the public should expect these
securities to be safe, given the fact that risky mortgage-backed securities caused the 2008
collapse, he responded, "Trust me."
For Blackstone, at least, the logic is simple. The company wants money upfront to purchase
more cheap, foreclosed homes before prices rise. So it's joined forces with JP Morgan, Credit
Suisse, and Deutsche Bank to bundle the rental payments of 3,207 single-family houses and
sell this bond to investors with mortgages on the underlying houses offered as collateral.
This is, of course, just a test case for what could become a whole new industry of
rental-backed securities.
Many major Wall Street banks are involved in the deal, according to a copy of the private
pitch documents Blackstone sent to potential investors on October 31st, which was reviewed by
TomDispatch. Deutsche Bank, JP Morgan, and Credit Suisse are helping market the bond. Wells
Fargo is the certificate administrator. Midland Loan Services, a subsidiary of PNC Bank, is
the loan servicer. (By the way, Deutsche Bank, JP Morgan Chase, Wells Fargo, and PNC Bank are
all members of another clique: the list of banks foreclosing on the most families in
2013.)
According to interviews with economists, industry insiders, and housing activists, people
are more or less holding their collective breath, hoping that what looks like a duck, swims
like a duck, and quacks like a duck won't crash the economy the same way the last flock of
ducks did.
"You kind of just hope they know what they're doing," says Dean Baker, an economist with
the Center for Economic and Policy Research. "That they have provisions for turnover and
vacancies. But have they done that? Have they taken the appropriate care? I certainly
wouldn't count on it." The cash flow analysis in the documents sent to investors assumes that
95 percent of these homes will be rented at all times, at an average monthly rent of $1,312.
It's an occupancy rate that real estate professionals describe as ambitious.
There's one significant way, however, in which this kind of security differs from its
mortgage-backed counterpart. When banks repossess mortgaged homes as collateral, there is at
least the assumption (often incorrect due to botched or falsified paperwork from the banks)
that the homeowner has, indeed, defaulted on her mortgage. In this case, however, if a single
home-rental bond blows up, thousands of families could be evicted, whether or not they ever
missed a single rental payment.
"We could well end up in that situation where you get a lot of people getting evicted not
because the tenants have fallen behind but because the landlords have fallen behind," says
Baker.
Bugs in Blackstone's Housing Dreams
Whether these new securities are safe may boil down to the simple question of whether
Blackstone proves to be a good property manager. Decent management practices will ensure high
occupancy rates, predictable turnover, and increased investor confidence. Bad management will
create complaints, investigations, and vacancies, all of which will increase the likelihood
that Blackstone won't have the cash flow to pay investors back.
If you ask CaDonna Porter, a tenant in one of Blackstone's Invitation Homes properties in
a suburb outside Atlanta, property management is exactly the skill that Blackstone lacks. "If
I could shorten my lease -- I signed a two-year lease -- I definitely would," says
Porter.
The cockroaches and fat water bugs were the first problem in the Invitation Homes rental
that she and her children moved into in September. Porter repeatedly filed online maintenance
requests that were canceled without anyone coming to investigate the infestation. She called
the company's repairs hotline. No one answered.
The second problem arrived in an email with the subject line marked "URGENT." Invitation
Homes had failed to withdraw part of Porter's November payment from her bank account,
prompting the company to demand that she deliver the remaining payment in person, via
certified funds, by five p.m. the following day or incur "the additional legal fee of $200
and dispossessory," according to email correspondences reviewed by TomDispatch.
Porter took off from work to deliver the money order in person, only to receive an email
saying that the payment had been rejected because it didn't include the $200 late fee and an
additional $75 insufficient funds fee. What followed were a maddening string of emails that
recall the fraught and often fraudulent interactions between homeowners and
mortgage-servicing companies. Invitation Homes repeatedly threatened to file for eviction
unless Porter paid various penalty fees. She repeatedly asked the company to simply accept
her month's payment and leave her alone.
"I felt really harassed. I felt it was very unjust," says Porter. She ultimately wrote
that she would seek legal counsel, which caused Invitation Homes to immediately agree to
accept the payment as "a one-time courtesy."
Porter is still frustrated by the experience -- and by the continued presence of the
cockroaches. ("I put in another request today about the bugs, which will probably be canceled
again.")
A recent Huffington Post investigation and dozens of online reviews written by Invitation
Homes tenants echo Porter's frustrations. Many said maintenance requests went unanswered,
while others complained that their spiffed-up houses actually had underlying structural
issues.
There's also at least one documented case of Blackstone moving into murkier legal
territory. This fall, the Orlando, Florida, branch of Invitation Homes appeared to mail
forged eviction notices to a homeowner named Francisco Molina, according to the Orlando
Sentinel. Delivered in letter-sized manila envelopes, the fake notices claimed that an
eviction had been filed against Molina in court, although the city confirmed otherwise. The
kicker is that Invitation Homes didn't even have the right to evict Molina, legally or
otherwise. Blackstone's purchase of the house had been reversed months earlier, but the
company had lost track of that information.
The Great Recession of 2016?
These anecdotal stories about Invitation Homes being quick to evict tenants may prove to
be the trend rather than the exception, given Blackstone's underlying business model.
Securitizing rental payments creates an intense pressure on the company to ensure that the
monthly checks keep flowing. For renters, that may mean you either pay on the first of the
month every month, or you're out.
Although Blackstone has issued only one rental-payment security so far, it already seems
to be putting this strict protocol into place. In Charlotte, North Carolina, for example, the
company has filed eviction proceedings against a full 10 percent of its renters, according to
a report by the Charlotte Observer.
About 9 percent of Blackstone's properties, approximately 3,600 houses, are located in the
Phoenix metro area. Most are in low- to middle-income neighborhoods.
Forty thousand homes add up to only a small percentage of the total national housing
stock. Yet in the cities Blackstone has targeted most aggressively, the concentration of its
properties is staggering. In Phoenix, Arizona, some neighborhoods have at least one, if not
two or three, Blackstone-owned homes on just about every block.
This inundation has some concerned that the private equity giant, perhaps in conjunction
with other institutional investors, will exercise undue influence over regional markets,
pushing up rental prices because of a lack of competition. The biggest concern among many
ordinary Americans, however, should be that, not too many years from now, this whole rental
empire and its hot new class of securities might fail, sending the economy into an
all-too-familiar tailspin.
"You're allowing Wall Street to control a significant sector of single-family housing,"
said Michael Donley, a resident of Chicago who has been investigating Blackstone's rapidly
expanding presence in his neighborhood. "But is it sustainable?" he wondered. "It could all
collapse in 2016, and you'll be worse off than in 2008."
This is not surprising that this has happened. All of the de-regulation on Wall Street,
lobbied for by Wall Street has allowed this to transpire.
Congress does not even read the bills that they sign into law, let alone write them!
Many are written by ALEC American Legislative Exchange Council, the Chamber of Commerce,
the Realtor's assosiation, the Medical Industrial Complex, public employee unions, and
various other special interest groups!
Why is it a pressing issue to actively promote homosexuality? What is the point? That is
really strange! There is a difference between not actively discriminating and actively
promoting!
Are they trying to worsen the AIDS epidemic or lower the birth rate? It does not make
sense to be actively promoting and encouraging homosexuality.
@Colin
Wright There are many venture capitalist that are not Jewish.. Venture Capitalist don't
always advertise their wealth. Not everybody in Wall Street or the City of London is
Jewish.
I think it is important to separate the Jews from the Zionist , many in that
small group (Zionist) are Jewish and Christian but most Jews and most Christians are
neither Venture Capitalist nor Zionist. Time after time I have asked my Jewish friends are
you are Zionist, and most say they do not really know what Zionism is? Zionism hosts many
races among its members; in the states, Christian Zionism is big, maybe bigger even than
Jewish Zionism.. see Christian Zionism : The Tragedy and the Turning: the cause of our
Conflicts (on DVD) by http://www.Whit.org. .
Zionism is an economic system. Zionism is a winner take all system of Economics .
Zionism is like an adult version of the game called King of the Mountain. In such a game,
no one is allowed to play unless they first have sufficient resources to be counted, and
are then willing to and believe they are personally capable of defeating the then residing
well armed king (Oligarch). IMO, all Jews everywhere, would be well advised to avoid being
labelled a Zionist<=hence the reason ?
Zionism is not the same as Judaism, its not a race, its not a religion, its not even
a culture, it is an economic system with virus like attributes.
@Lot
You are quibbling. You are prevaricating. You are obfuscating.
Joyce has assembled a powerful case against a known cast of financial parasites. This
phenomena is hardly new. It brings to mind another financial scandal of a generation ago
that was chronicled in James B. Stewart's book 'Den of Thieves'.
The mega-wealthy swindlers of that era were also all Jews: Boesky, Siegel, Levine,
Milken, among others. Some twenty years later, another Wall Street Jew, Bernie Madoff,
succeeds in pulling off the biggest fraud in US history. There's a pattern here.
Yet all you can do, Lot, is deflect, denigrate, and deny.
Joyce is giving us more actual names. These are the actual perps as well as institutions
they hide behind. These ruthless predators collude with one another as they exploit the
labor of millions of gentiles worldwide, then shower Jewish causes and philanthropies with
their loot. Their tribal avarice is revolting. And insatiable.
Do you deny this phenomena?
Is it all just another 'anti-Semitic canard'?
You even claim [Joyce] is
"retarded and highly uninformed".
Retarded?
He's brilliant and persuasive.
Uninformed?
He's erudite and scholarly.
You, Lot, are demonstrating again devious tribal dishonesty. It's glaring, it's
shameful, and it's obvious. This is a trait I've observed in virtually all of your
writings. You invariably deflect and deny. But Jewish criminality is real.
Joyce aptly concludes:
[T]he prosperity and influence of Zionist globalism rests to an overwhelming degree on
the predations of the most successful and ruthless Jewish financial parasites.
This is a Jewish conspiracy to make Jews look terrible. Congress should slam the breaks
here. The de-regulation of the powerful combined with the over-regulation of the powerless
is criminally wreckless. Kind of like the friends don't let friends drive drunk approach.
Congress slam the breaks, yeah right, that'll happen! Lol!
@Colin
Wright Andrew Carnegie left behind institutions like Carnegie Hall, Carnegie-Mellon
University, and over 2500 Free Libraries from coast to coast, in a time when very little
was done to help what we now call the "underprivileged".
In fact, he gave away 90% of his massive fortune–about $75 Billion in current
dollars. Funding, in the process, many charities, hospitals, museums, foundations and
institutions of learning. He was a major benefactor of negro education.
He was a staunch anti-imperialist who believed America should concentrate its energies
on peaceful endeavors rather than conquering and subduing far-off lands.
Although they are even more keen to put their names on things, today's robber barons
leave behind mainly wreckage.
Jews are destroying the world. Everywhere they go, they leave behind nations in ruins. Look
at Europe, Africa and the Americas, Jews have left their ugly footprints. Corruption,
prostitution, drugs and human trafficking are their trade.
@anon
A combination of both I would say, although some would like to make it out that
Anglo-Saxons were the epitome of honour, they too resorted to morallly abject tricks and
swindles to acquire their wealth.
WASPs allowed Jews into their lands and both of them struck a sort of implicit contract
to work together to loot the world, when the word had been sucked dry, the conflict between
Jews and WASPs began and Hitler and the National Socialists were a last gasp attempt to
save the WASP side from being beaten, in the end higher Jewish verbal IQ gave them the
upper edge in the ability to trick people.
It is hard to feel sorry for WASPs, they struck a deal with the Jews centuries ago to
work together and were backstabbed, what is happening to these Third World countries will
now happen to WASP countries, it is poetic justice. Luckily the torch of civilisation will
continue by way of East Asia and Eastern Europe, who were true conservatives in that all
they wished was prosperity for their people in their own lands without any aggressive
foreign policy moves.
Basically, WASPs thought that they could win in the end, but they were out Jew'd and now
they are crying.
The one difference you will notice is that certain subsections of WASPs, notable the
British, actually did build infrastructure in the countries they looted, this to me was
borne out of a sense of guilt, so to be fair, WASPs were not as parasitic and ruthless as
Jews.
But in the end, the more ruthless wins. To quote the Joker
@Lot
Kyle Bass's fund is called 'Hayman', maybe because the MSM loathe the Bass family that
fellow Texican Bass is not related to. They are not the only ones aware of the drawbacks of
a name. Elliot is Singer's middle one.
The article bounces back and forth between two completely different fields: private
equity and distressed debt funds
If someone owes you money and you cannot collect, you factor the account, (sell it on)
and then people who are going to be a lot less pleasant about it will pay them a visit and
have a 'talk' with them. While it is good to have a domestic bankruptcy regime in which
innovation and entrepreneurship is encouraged– to the extent that people are not
routinely gaming the system–I don't see why Argentina should benefit. Singer became
notorious for what he did to Argentina after he bought their debt, and he is pretty upfront
about not caring who objects. Puerto Rico is neither foreign or protected by Chapter 9 of
the U.S. Bankruptcy Code so it is a borderline case, which is probably why the people
collecting that debt tried to hide who they were.
The way he took down Jonathan Bush and others led to Bloomberg dubbing Singer 'The
World's Most Feared Investor'. Singer buys into companies where he sees the management as
as failing to deliver maximum value to the shareholders, then applies pressure to raise the
share price (in Bush's case extremely personal pressure) that often leads to the departure
of the CEO and sale of the company. That immediate extra value for the shareholder Singer
creates puts lots of working people out a job. Because of Singer and his imitators, CEO's
are outsourcing and importing replacements for indigenous workers in those services that
cannot be outsourced. All the while loath to foster innovation that could bring about long
term growth, because that would interfere with squeezing out more and more shareholder
value.
Singer is less like a vulture than a rogue elephant that is killing the breeding pair
white rhinos on a game reserve, and they are going extinct. Well it's a good thing! Thanks
to Singer et al (including Warren Buffett) Trump got elected. According to someone in jail
with Epstein, he had an anecdote about Trump being asked by a French girl what 'white
trash' was, and Trump replied 'It's me without the money'.
Trump is now essentially funded by three Jews -- Singer, Bernard Marcus, and
Sheldon Adelson, together accounting for over $250 million in pro-Trump political money.
In return, they want war with Iran.
All to the good. Iran won't leave Saudi Arabia (serious money) alone so Iran is going to
have to be crushed as a threat to the Saud family like Saddam before it anyway. If the Jews
think they are causing it, let 'em think so.
https://www.unz.com/pgiraldi/trump-creates-a-new-nation/
When the Israelis occupy nearly all of the West Bank with Donald Trump's approval and
start "relocating" the existing population, who will be around to speak up? No one, as by
that time saying nay to Israel will be a full-fledged hate crime and you can go to jail
for doing so
Loudspeaker goes off " All Anti–Zionist Jews to Times Square ".
@Colin
Wright No judeophile, but it's 90% demagogic horsehit.
God forbid anybody should ever have to pay back money they borrow! Why, that's utterly
Jewish!
These so-called "vulture" funds didn't originate the debt. They simply purchased already
existing debt at deeply discounted prices either because the debt was already in default or
was at imminent risk of defaulting, which is why the debt sells at a heavy discount, since
existing debt holders are often happy to sell cheap and get something rather than hold on
and risk getting nothing.
What Joyce zeroes in on is these vulture funds' willingness to use all legal avenues to
force debtors to make good on their debts, including seizing the collateral the debtors
pledged when they borrowed the money. Joyce chooses to characterize this practice as
"Jewish," implying that gentile creditors would instead be overcome with compassion and let
the debtors off the hook and wear the loss themselves.
What Joyce regards as a defect of "vulture" funds, others might regard as an benefit.
The size of these funds, their legal expertise, and their political connections mean that
borrowers can more successfully be held to account. If I owned, say, Puerto Rican debt in
my retirement account, the chances that I could make Puerto Rico honor its obligations are
much slimmer.
None of this is to suggest that finance, as we today know it, is perfect and that it
couldn't be reformed in any way to make its operation more conducive to nationalistic
social values, only that anti-cap ideologues like Joyce weave lurid tales of malfeasance
out of completely humdrum market economics (which is precisely the same market economics
that Tucker Carlson learned about too, btw).
Mr. Joyce
Your obsession with us will prove to be your downfall.
Jewish people have always stood against tyranny against the working class, the poor and
other people of color.
The phrases and catch words that you used to vilify Jews are in many cases pulled from the
age old tropes used to demonize Jews for centuries and are anti-Semitic through and
through. They can't be overlooked nor hidden by claims of legitimate political
disagreements.
We know that it is not only the Jewish community that is at risk from unchecked
antisemitism, but also other communities that white nationalists target.
I find it very offensive that people like you continue to demonize us for no reason.
I dare you to hold a debate with me on this so called "Jewish Influence".
I am not even hiding my name here.
Billionaire
Paul Singer
's New York-based hedge fund said in a
statement
Friday it had submitted the dispute for arbitration and urged the government to pay the damages
in order to preserve its reputation with international investors. Elliott said, to date, the parties have been
unable to resolve the matter on their own.
"Like all prominent economies, Korea obviously has no interest in
being viewed as hostile to foreign investors, particularly when other economies in the Asia-Pacific region are
fast becoming potentially attractive alternatives," Elliott said in the statement.
The South Korean government
acknowledged
they received the notice in a separate statement.
Elliott lost a proxy fight to oppose the combination of the Samsung
units, solidifying the founding family's grip over the group. Samsung narrowly won the vote, clinching support
from the government-run
National Pension Service
. Elliott claims the government unfairly meddled in the deal, which led to a
massive corruption scandal in the country.
NPS sided with Samsung after pressure from the presidential office,
landing the minister, who was then in charge of the pension fund, in jail. Elliott, which owned about 7 percent
of Samsung C&T at the time, says it incurred significant damages as a result of the former administration's
hand in allowing the merger to go through.
Samsung Vice Chairman Jay Y. Lee, who's been leading the group
after his father slipped into a coma, walked free from prison earlier this year after his sentence for bribery
in connection to the deal was suspended. Park Geun-hye, South Korea's first female president, was
sentenced
to 24 years in prison after being found guilty on charges including bribery and abuse of power.
"It is regrettable that the former administration took a hostile
approach to foreign investment rather than embracing it with a view to promoting domestic innovation and
maintaining economic growth," Elliott said Friday.
Another Samsung investor, Mason Capital Management, has also
served
a notice of intent to the government, saying it incurred
$175 million
in damages related to the actions of the former administration.
Elliott encouraged the South Korean government to uphold its
obligations toward foreign investors, including paying the damages, working to prevent future breaches, and
taking steps to no longer shield the ruling families at the expense of investors.
"Maintaining credibility internationally among investors is
critical to attracting foreign investment and propelling Korea to even greater prosperity," Elliott said.
Earlier this year, Elliott waged another fight in South Korea
against Hyundai Motor Group. In May, the automotive giant bowed to pressure from the activist and
shelved
its
$8.8 billion
restructuring plan, marking an unprecedented victory for shareholder activism in the
country.
@silviosilver
ecade, including tracking the course of a Argentine navy ship, Libertad. When it arrived in
Ghana, he persuaded one of the country's judges to detain the vessel in port until he was
paid the millions owed to him. Argentina won that round, successfully arguing in the
International Tribunal for the Law of the Sea that the ship should be released. But he won a
later court battle resulting in the South American country defaulting on its debts.
The former president of Argentina, Cristina Fernández de Kirchner, memorably
described Singer as "the Vulture Lord", a "bloodsucker" and a "financial terrorist".
Singer was the first one who did it. He and his co-workers at Elliot Associates co. are
all Jewish. Paul Singer created Vulture Capitalism with his use of NYC courts to sue
Panama! This has never been done before, suing a foreign nations from a court in another
nation
Simply appalling behavior! How I miss the good old days, when they'd just park a warship off your
coast and make you an offer you couldn't refuse.
@silviosilver
the case to a New York district court, Elliott broke with long-standing international law
and custom, according to which sovereign governments are not sued in regular courts meant
to deal with questions internal to a nation state. Further, the presiding judge accepted
the case – another break with custom. It set the stage for two decades of similar
parasitism on struggling countries by Elliott Associates, a practice that has reaped
billions for Jewish financiers.
Non- Jews may have copied this technique later but it was Paul Singer's invention and he
was Jewish. Therefore, it is fair to call it a Jewish invention.
@Mr.
Anon a, the struggling nation finally agreed in 2000 to pay him $58 million. That meant
he got better than a 400 percent return.
Argentina was the biggest fish of all to be fried by Singer's Elliot Associates.
In 2001, Elliott Associates purchased an Argentinian default for $48 million; the face
value of that debt today is $630 million. The fund wants repayment for the full value of
the debt to all of Argentina's creditors, as it did in 1995 with Panama. This amounts to
$1.5 billion, which could rise to $3 billion including, again, that all-important interest
and fees.
Sue
Chang
Markets reporter
Bloomberg via Getty Images
Paul Singer's Elliott Management, which lost its high-profile proxy battle against Samsung Group last year, may
be facing an investigation by prosecutors for failing to follow disclosure rules, according to a Korean media
report.
South Korea's Securities & Futures Commission said it has decided to refer Elliott to the prosecution following
an internal review and has submitted pertinent materials, according to Yonhap News.
The commission claims that although Elliott followed regulations when it boosted its ownership in Samsung by
2.17% from 4.95% in June, the actual disclosure should have been submitted in May when its stake had already
passed 5% via total return swaps, according to Yonhap.
However, a person familiar with the matter said there were no agreements at any time with the parties in
question to give Elliott the right to the underlying Samsung shares. He also pointed out the commission had not
issued any official findings from its own probe other than to refer the matter to the prosecution.
Hedge funds often use total return swaps, a complex derivative swap, to take long position in assets without
having to own them outright.
In a similar controversy in the U.S. involving CSX Corp.
CSX,
+0.03%
, the Children's Investment Fund of Britain and 3G
Capital Partners, a judge for the Federal District Court of Manhattan ruled that the hedge funds had violated
securities laws by not fully disclosing their stakes in a timely manner, including positions held via total return
swaps. But in so ruling, Judge Lewis Kaplan also said there was nothing he could do to
penalize the
funds
.
In Elliott's case, "the financial regulators believe that if an investor utilizes total return swaps to
increase its ownership in a company with the specific intent to launch a hostile attack on the management, then it
is in direct conflict with the principles behind public disclosures," the news agency said.
The decision by the commission to involve the prosecution in Elliott's case marks the first time Korean
authorities have taken action against investors exploiting total return swaps to bolster their positions,
according to Yonhap.
Elliott Management declined to comment on the report.
"... I don't even know what capitalism means anymore. It doesn't seem like it's an actual free market system. Seems like it is slavery for the little guy, and parasitism for the rich. Maybe we should ditch the word capitalism for usuryism. ..."
"... That scary thought has crossed my mind, too, Art. I've even started wondering if this whole impeachment circus is really part of an elaborate plot to guarantee Trump's re-election. I mean, would Pelosi's insane actions make the slightest sense otherwise? And everyone has noted how this is such a 'Jew coup,' haven't they? It all looks so suspicious ..."
"... It looks like it was Browder who killed Magnitsky, so that he can't spill the beans. And then in an act of ultimate chutzpah played the victim and promoted Magnitsky act. ..."
You and other whites here are like the bad guys in every horror movie ever made, who gets shot five times, or stabbed ten,
or blown up twice, and who will eventually pass -- even if it takes four sequels to make it happen -- but who in the meantime
keeps coming back around, grabbing at our ankles as we walk by, we having been mistakenly convinced that you were finally dead
this time. Fair enough, and have at it. But remember how this movie ends. Our ankles survive.
YOU DO NOT.
Talk about deflection. Any nation, empire, culture or civilization wherein the Jewish collective gains critical mass and ultimately
absolute power turns into a real horror, not a movie. The Jews may be said to be the true prototype of the "bad guys in
every horror movie", since they can only be gotten rid of by very rigorous means taken in the healthiest and most vigorous cultures
and societies. Indeed, antisemitism itself is the healthy immunological reaction of a flourishing culture, and its lack thereof
the pathology of a moribund one.
Woke Christians of European provenance have nothing to envy the Jew (the archetypal Jew) over. We realize that the true measure
of success is not primarily monetary or the fulfillment of cheap ambitions, but a spiritual and cultural one. On the contrary,
the Jewish hatred against Christian Europe and the civilization that it constructed is engendered out of sheer envy and malice,
because Jewry understands that is would never be capable of constructing anything similar, and never has. In all of the arts,
Jewry has produced nothing of note.
This is not to say that individual Jews have not made contributions to the arts and sciences, but they have done so only by
participation in gentile culture, not qua Jews. Jewry only tears down and deconstructs; it is not creative in the sense of high
art, and can thrive only in the swamp of gentile decadence and moral putrefaction. Whatever Jewry touches, it turns to merde.
@Anon specifically
push them away from materialism and desire for money and power, even at the expense of others. That is the exact point
of religion (self-improvement) btw, so the next question is – is the Jewish religion effective?
At which point, the Jewish ideology becomes the wolf in the hen house – because it fails to tame the human away from such materialistic
desire (as it btw claims it does best).
Should the hens be allowed to point out what they see as a wolf? Yes.
That the supposed wolf then obfuscates and justifies their actions by pointing to others, mostly, betrays that it is, in fact,
a wolf.
I have become totally disenchanted with the SEC. Stupid, Evil, Crazy! It would not surprise me if they are the ones that have
been terrorizing me, with stupid, evil, crazy chants through appliances after illegallly implaced RFIDs, microchips, or sensors
illegally implanted in my ears and nose that started after my first phone was hacked in 2017! Can't expect stupid people not to
be stupid, evil people not to be evil, and crazy people not to be crazy! They were just born that way!
"The US will become minority white in 2045 Census projects " :
"During that year [2045] whites will comprise 49.7 per cent of the population in contrast to 24.6 per cent for Hispanics ,
13.1 per cent for Blacks , 7.9 per cent for Asians and 3.8 per cent for multi-racial populations " Are these projections good
or bad for the "Jewish people " ?
Nov 22, 2013 Thomas DiLorenzo – The Revolution Of 1913
From the Tom Woods show Loyola economics professor Thomas DiLorenzo discusses three events from 1913 that greatly escalated
the transmogrification of America from the founder's vision (limited government) to its current state (unlimited government).
@Lot sons of
Abraham name their businesses after themselves (I'm sure this will insincerely be attributed to some fear of native kulaks' repressed
urge-to-pogrom, even in Finland or Japan.) The other is an observation made by an associate of a famous Austrian landscapist:
even merely remarking on their origins causes these guys mental distress.
Here in the melting pot, the difference couldn't be any starker. You can make small talk with any flavor of goy based on it:
that's a Polish name, isn't it? Yeah, how did you know! Try this one with Levy or Nussbaum down at The Smith Group or The
Jones Foundation and watch them plotz.
Jews have always weaponized usury. Long before Christianity, Jews operated the East/West mechanism on donkey caravan trade
routes. Silver would drain from the West, and Gold would drain from the east, while Jewish caravaneers would take usury on exchange
rate differences. This operated for thousands of years.
Haibaru donkey bones have been discovered outside of Sumer. The Aiparu/Haibaru (Hebrew) tribes were formed as merchants operating
between city states. In those days, psychopaths and criminals would be excommunicated from civilized city states, and would take
up with the wandering merchant tribe.
Why do you think the Jew is always interested in owing the money power? Why do you think the Jew perpetually stands outside
the walls of the city state, plotting its destruction?
History tells us things, and we had better listen. That is – real history, not what you learned in (((public skool))). There
are two ways to deal with the Jew: 1) Remove him from your country. 2) Limit him.
Limiting was done by Byzantium under Justinian. The Jew was limited FROM money counting/banking; limited from participation
in government; limited from access to pervert young minds – especially as school teachers and professors.
It takes a King or Tsar who cares about his population, and is willing to eject or filter out toxins from the body politic.
(((Democracy))) is a failed form of government, whereby monied Oligarchs control the polity by compromat and pulling strings.
You are not going to be able to vote your way out of the Jew problem.
@Ilya G Poimandres
edina. Ergo, Wahabbi Islam and the Takfiri's are doctrinaly correct, while Judaizer Christians (those that worship the old
testament) are out of alignment and heretics.
Judaism is actually a new religion that came into being after 73 AD, when the verbal tradition (Caballa) became written down
into Talmud.
Our Jewish friends have always been practicing usury, going back to since forever.
Our Jewish friends, I count as worse that Islamics. However two wrongs don't make a right. Islam badly needs reform or to be
expunged. Talmudic Judaism is by far the worst religion on the planet, and its adherents must malfunction by definition.
@Onebornfree
You are missing something because you are unwilling to adapt and learn with new information. This makes you an ideologue.
Libertarianism IS A JEWISH CONSTRUCT.
There are no such things as free markets. Money's true nature is law, not gold. Money didn't come into being with barter and
other nonsense lolbertarians believe.
Most of the luminaries that came up with "libertarian" economics are Jews, and it is a doctrine of deception. The idea is to
confuse the goyim with thoughts and ideas that make them easy pickings.
A determined in-group of predators operating in unison, will take down an "individual" every-time.
Don't expect anything to improve with Jay Clayton as SEC Chair, and his wife and her father Gretchen Butler Clayton who was
CEO of CSC and mysterious WMB Holdings which share the same address in addition to many Goldman Sachs divisions. Gretchen was
employed by Goldman Sachs as an attorney from 1999-2017. Many companies affiliated with the Panama Papers share the same address
as well.
Jewish people have treated me better than my own White Euro family.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them out . and so their charity is within
the tribe, but there is no charity within the tribe among Whites.
Jews, along with Asians and at least some Africans, believe in not just climbing the ladder, but in actually helping others
– at least family – up it also. Whites believe in climbing the ladder and then pulling it up after them.
I was explaining to a friend recently: My (relative) has proven that if I showed up at their door, starving, they'd not give
me a cheese sandwich, while in my experience, strangers have been overall a fairly kind lot and a stranger, 50/50, might. Therefore,
while I find the idea of robbing or burning down the house of a stranger abhorrent, I don't mind the idea so much when it involves
a person who's proven to be cold and evil.
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New York where they were being befriended
by a Jewish family. There was a ray of hope. The Irish kids, at least, would have been fed, steered into decent schooling, etc.
But foolishly they went back to Ireland, to be treated like utter dogshit by their fellow White family and "people".
Most of the predation going on in the US and worldwide is being done by WASPS who are using Jews as a convenient scapegoat.
Finally! An intelligent criticism of Trump for a change. So tired of the brainless Democrat/MSM impeachment circus.
They make me feel like a reflexive MAGAtard just for defending the constitution, logic, etc., from their never-ending stream of
inanities. Meanwhile, the real problem with Trump is not that he's Hitler; it's that he's not Hitler enough!
I am also so tired of Zionist-loving cucks bleeting on about the evils of the CRA without ever considering the role played
by the (((profiteers))) who lobbied such policies into law in the first place. Realize that what Paul Singer does for a living
used to be illegal in this country up until recently. That's right: US bankruptcy law used to forbid investors from buying up
debt second-hand at a discount and then trying to reclaim the entire face value from the debtor. But I see all kinds of
people even on this thread blaming the victim instead -- 'Damn goyishe deadbeats!' Whatever
What Singer and the other Jewish vultures engage in is not productive, and isn't even any recognisable form of work or business.
It is greed-motivated parasitism carried out on a perversely extravagant and highly nepotistic scale. In truth, it is Singer
and his co-ethnics who believe that money can be printed on the backs of productive workers, and who ultimately believe they
have a right to be "showered by free stuff promised by politicians."
@anon maintain
your honor, and manners and still succeed. Jews take the easy low road of deception and cheating. WASP take the higher road of
harder work and ethical business practice.
"Permit me to issue and control the money of a nation and I" care not who makes its laws"
That is what Mayer Amschel Rothchild said in the 1750s. Now, is it a stretch of my imagination to believe the Central Banks
of the West, all Jewish controlled, would unfairly favor their 'own' when issuing or disbursing the money they are permitted to
create.
We are not allowed to audit the Federal Reserve, so we know not what they do with it beyond what they tell us. In 2016 it was
discovered that between the year 1999 and 2016 well over $23 trillions had been stolen from just 2 departments of our government,
the DoD and HUD. (Someone should look at NASA). Is it possible the seed money, for not only Venture capitalists schemes but also
buying governments and law makers, has been diverted, shoveled out of the back door of these corrupt central banks and into the
hands of their fellow jews?
Anyway, the more exposure articles like this get the closer we get to ending their reign.
@Mefobills
he pressure will only be towards violence – for any nation or faith!
Judaism has monopolized for millennia though, and still acts as a victim. Different kettle of fish.
Also, you can debate the positives and negatives of Islam with a Muslim (not as a rabid ignoramus of course – you must be polite,
and have learnt something, as well as be open to learning more). Almost every debate with a Jew about Judaism has started with,
continued with, and ended with name calling for me however.
Judaism fails as a religion because it does not encourage the practitioner to look at themselves when confronted with error,
Islam still does imo.
Your statement: "Jews actually collaborated extensively in the imposition of tyranny on the working class in Eastern Europe
from 1917 to 1991" not only applies to Europe, but the united States of America as well.
1. Re Sidney, Nebraska: Maybe I'm missing something but wasn't it Cabela's owners, for example co-founder and chairman Jim
Cabela, who sold Cabela, not Elliot Management (Singer et al)? I gather Elliot Management owned only 11% of the company. Was that
enough to force them to sell?
2. The article confuses honest straightforward loans with tax farming and government corruption. Loans can be very useful,
e.g. for a car to get to a job, or for a house so you build up equity instead of paying rent.
According to the Talmud, we goyim are not the descendants of Adam and Eve, like the Jews. No, we are the bastard progeny
of Adam's first wife, Lilleth, who eloped with the demon Samael. So we goyim are really all half-demons and therefore we are an
abomination in the sight of Jew-hova, and we get what we deserve at the hands of his 'chosen people'.
@Colin Wright
to get carried away with this. Figures such as Andrew Carnegie, while impeccably gentile, were hardly paragons of scrupulous
ethics and disinterested virtue.
Andrew Carnegie built something that made life better for people. Making steel is a beneficial thing.
These evil vulture Jews build nothing – they make people poorer. They suck the wealth out of people who have little. They know
100% what they are doing.
Jesus expressed anger against the money changers on the temple steps.
It is OK for you to have natural human feelings and be angry at these Jew bastards.
@anon ith him
on this trip. It was an awful experience – consistent with all the books I read on psychopaths and also that book Jewish History,
Jewish Religion, the weight of 3000 years
Another very wealthy American mother of a friend asked her South African friends (also jews) to help her book trips in South
Africa (and they of course recommended only their Jewish friends) – it's their son who told me this.
So a lot of backstabbing, cultural nepotism and actively (but in a hidden way as most psychopaths like to do) they do at wakening
and isolating their host. That's their only advantage – not intelligence (at least in my experience )
I don't even know what capitalism means anymore. It doesn't seem like it's an actual free market system. Seems like it
is slavery for the little guy, and parasitism for the rich. Maybe we should ditch the word capitalism for usuryism.
@Ilya G Poimandres
o – including offensive war. I used the term political authority on purpose, because Islam is more than just a religion, it
is a political-theocratic construct that is all-encompassing.
There may not be a specific verse allowing aggressive violence, but there is something going on based on the data. (I admit
to being a lay-man and not an expert on minutia of Islam. I don't want to go there based on what I already know to be true.)
In Christianity, if there are calls for aggressive violence it is OUT OF ALIGNMENT because of super-session. Christian adherents
who do this are Judaizers, and have to use the old testament for justification.
'Everywhere they go, they leave behind nations in ruins. "
-- They always find the willing local collaborators ready to make a big profit. Who can forget Dick Cheney, the Enemy of Humanity?
The same kind of unrestricted criminality and amorality lives on in Tony Blair the Pious.
The fact that this Catholic weasel and major criminal Tony Blair is still not excommunicated tells all we need to know about
the Vatican.
Assange is rotting in a prison, while Tony Blair and Ghislaine Maxwell are roaming free. The Jewish connections pay off.
@J Adelman
s as "strong advocates for a robust and close relationship with Ukraine," the Democratic senators declared, "We have supported
[the] capacity-building process and are disappointed that some in Kyiv appear to have cast aside these [democratic] principles
to avoid the ire of President Trump," before demanding Lutsenko "reverse course and halt any efforts to impede cooperation with
this important investigation
And yet Trump pulls the Jews ever closer. A ruling race of ubermenschen now.
'No reason'.
Can you imagine what American Blacks and savage Hispanics let alone whites are going to do if the US economy craters like the
Russian economy, and everything is transferred to the banks?
Yeah . fine idea. I've always maintained there are two uses of the word "capitalism" industrial capitalism or competition of
ideas vs. financial capitalism, the Darwinian struggle for the most ruthless bankster to rig the "markets" most efficiently.
Whether we give it new terminology I don't care much . but I sure wish people would understand the difference, one way of another
!
@alex in San Jose
AKA digital Detroit as extended, and had aunts and uncles and cousins, who lived in the general area for centuries, then there
would be a network to fall back on.
See slaughter of the cities by Jones:
And yes, the FIRE sector and impetus behind the destruction of your extended family was JEWISH. The breakdown of neighborhoods
and ethnics was on purpose.
The Jew is anti-logos, and whatever he touches he destroys. (There are exceptions of course – but these people no longer possess
a negative Jewish spirit.)
Sorry your family was destroyed. When whites become un-moored they don't know how to act.
Quite bizarre post. First,he makes a half ass defense of Jew character.(Weinstein, Epstein don't represent jews! Well, they
kind of do. Any jew who is called to accounts for his crimes automatically does not represent jews! )
if you think it's wrong to buy or try to collect on defaulted debt, what is the alternative set of laws and behavior you
are recommending? If debts can simply be repudiated at will, capitalism cannot function.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad investors should be punished and good
investors rewarded. Resources should be well allocated. Otherwise it's not capitalism.
These insane Boomers seem to think that there is a Jewish coup underway to remove Trump because of all the things that Jews
are saying in Jewish publications and every single person involved being Jewish and stuff.
@Germanicus
About the Carnegie donated "Peace Palace" in The Hague, presently the seat of the In ternational Court of Justice:
Germanicus claims:
They are a function of Empire in Hague, who protect empire criminals, and assume a non existent legitimacy and jurisdiction
as a private entity to take down empire opponents.
Such as this ruling for instance:
Guardian 3 Oct.2018:
International court of justice orders US to lift new Iran sanctions
Mike Pompeo indicates US will ignore ruling, after judges in The Hague find unanimously in favor of Iran
"What Joyce regards as a defect of "vulture" funds, others might regard as an benefit. "
-- Of course. I hope you did not miss the fact that the Jewish vulture funds -- ruthless, unethical, and leaching on goyim
-- contribute to the Jewish Holocaust Museum.
Is not it touching that the same bloody destroyers of nations demand from the same nations a very special reverence -- out
of ethical considerations, of course -- towards the Jewish victims of WWII? But only Jewish victims.
All others were not victims but casualties. See Iraq, Syria, Libya, and Ukraine. See the unlimited hatred of ziocons towards
Russia.
" but maybe a few leftist thinkers would receive a much needed electric shock if they were to see the JQ framed in marxist
terms " – I would not count on the effect of the electric shock on the leftist thinkers. The role of Jewish Bolsheviks in
the Cheka, NKVD, GULAGs, genocides by famine has been known from the very beginning and yet it left no impact on the leftist thinkers.
Browder's case is really interesting. http://www.ihr.org /jhr/v17/v17n6p13_Michaels.html
"According to Harvard University scholar Graham Allison, who is also a former US assistant Secretary of Defense, ordinary
Russians have experienced, on average, a 75 percent plunge in living standards since 1991 -- almost twice the decline in Americans'
income during the Great Depression of the 1930s. But in the midst of this widespread economic misery, a small minority has grown
fabulously wealthy since the end of the Soviet era."
"Although Jews make up no more than three or four percent of Russia's population, they wield enormous economic and political
power in that vast and troubled country. "At least half of the powerful 'oligarchs' who control a significant percentage of the
economy are Jewish," the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New Russia," May-June
1997 Journal, pp. 21-27.)"
It's interesting how the appeal of Eduard Topol to Jews in Russia is now starting to echo Jewish calls in the United States
for Jews to stop the path they are currently on.
Here is the complete text of Topol's extraordinary "Open Letter to Berezovksy, Gusinsky, Smolensky, Khodorkovsky and other
Oligarchs," translated for the Journal by Daniel Michaels from the text published in the respected Moscow paper Argumenty i Fakty
("Arguments and Facts"), No. 38, September 1998:
Magnitsky and Bill Browder is also really interesting.
It turns out that a large measure of the Russiagate story arose because Russian lawyer Natalia Veselnitskaya, who traveled
to America to challenge Browder's account, arranged a meeting with Donald Trump Jr. and other Trump campaign advisers in June
2016 to present this other side of the story.
Then we had Democrats actually literally word for word doing what they accuse Trump of doing in Ukraine.
"It got almost no attention, but in May [2018], CNN reported that Sens. Robert Menendez (D-N.J.), Richard J. Durbin (D-Ill.)
and Patrick J. Leahy (D-Vt.) wrote a letter to Ukraine's prosecutor general, Yuriy Lutsenko, expressing concern at the closing
of four investigations they said were critical to the Mueller probe. In the letter, they implied that their support for U.S. assistance
to Ukraine was at stake. Describing themselves as "strong advocates for a robust and close relationship with Ukraine," the Democratic
senators declared, "We have supported [the] capacity-building process and are disappointed that some in Kyiv appear to have cast
aside these [democratic] principles to avoid the ire of President Trump," before demanding Lutsenko "reverse course and halt any
efforts to impede cooperation with this important investigation."
What's the first rule of Communist and Satanist Saul Alinsky? Always accuse your opponents of what you are doing.
Imagine having a Grandfather as the literal Chairman of the American Communist Party, and all the amazing lessons you would
learn about political maneuvering and ideology.
And it's amazing.
Browder's story is that Russian officials stole his companies seals and then fraudulently formulated a tax avoidance scheme
with a complete paper trail that they fabricated against him in totem. Precisely matching the amount of money he was trying to
remove from their country, like those other Jewish Oligarchs who imposed conditions that were multiples worse then even the American
depression.
When under oath it turns out that Magnitsky wasn't even a lawyer at all, and didn't go to law school. Why did the media owned
by Mormons of course keep saying that Magnitsky was Browder's lawyer?
Why did the Russians fraudulently fabricate a paper-trail for another Jewish Oligarch to steal money out of Russia? Just like
they colluded with Trump when a Russian lawyer sought to explain what happened. Because that totally happened.
Maybe the problem isn't Capitalism. Maybe, when even the ur-Shabbos goys at National Review are shaking their head and washing
their hands like Pilate, maybe it's a different problem.
Yet Trump holds these people ever close to his beating heart.
And then there are all these connections to Jeffrey Epstein that are like an explosion linking all these people.
Poor old Russia. Even Putin isn't worse then what came before.
t class is not tied to any territory has been observable since 1960.
I don't have time now to look up how many of 199 directors are Jews . but I know enough of the economic history of various
countries to know that Jews were the first business and finance globe trotters,,,,.from Spain to Amsterdam, France to Africa ,
etc.etc. Jew were first hired as reps and facilitators by the gentile business owners especially because of their breather tribal
contacts in many countries ..that was their stepping stone to becoming transnational capitalist themselves.
Understanding our global capitalist ruling elite and who they are is not rocket science
Yet more evidence is piling up that Donald J Trump is the Great Betrayer. A man who had the biggest mandate in post war history
to clean up the Swamp that is D.C., reform Immigration to save America and reform the economy for American workers. He has squandered
all of it while pandering to Jews.
When the Donald is revealed as the Great Betrayer where will Jews run? Yes, they have several back up plans. Patagonia, Ukraine
and Israel.
Imagine that. They have their own country and 2 back up plans. It is really tough being a hated, oppressed minority.
being much more cautious in their borrowing since the borrowing cost is so high.
Instead, this current arrangement basically uses bond funds to put up a false front, telling a debtor they can borrow at 2%
when the real rate should be at 20% given the known risks, then the debtor goes crazy borrowing because it's so cheap to borrow,
and when they can't pay back, the bond gets sold to the vultures who come collecting at 20% or they seize assets.
This is no different than the subprime mortgage crap, except now that is regulated so they go after sovereign debt and corporate
debt instead. These vultures need to go die period.
This is a great, concise overview of Canadian media influence by the "silent" Jewish overlords via Golden Tree.
I tried copy/paste of your comment on CBC, but it did NOT last 2minutes before being suspended!!
I am sorry to have used your comment without your permission, but I am going to "misspell" some words to defeat the algorithm
to get your message across.
@Lot e, and
these golfy-sounding names (Elliot, Monarch, GoldTree, OakTree, Canyon, Tilden Park) fit the perception. We whites receive the
society's hate for the wealth disparities created by high finance.
4. No, it is not difficult to do finance differently. Every other investor has higher patience for poor countries in Central
America and Africa, and they all look at Elliot with confused scorn.
And, things would probably run fine without hyper-aggressive multi-billionaires in pushing the courts to f- over those who
default on debts they owe to the maximum degree. Japan and Norway do quite fine with businesses that are run by gentle and humble
goys who feel ashamed at the thought of getting "too rich."
You will be thrown out.
You will have to choose between Israel, Ukraine and Patagonia. No one else will take you.
You have destroyed our politics, media and economy.
You are not respected.
You buy compliance with money.
You have bankrupted the U.S. dollar with debt pursuing Israel's enemies.
Ben Franklin and the American revolution was almost put in a similar pinch by the Amsterdam banker Jean DeNeufville. In a letter
to John Adams, 14 December 1781*, Franklin explained that DeNeufville wanted as security for a loan "all the lands, cities, territories,
and possessions of the said Thirteen States, which they may have or possess at present, and which they may have or possess in
the future, with all their income, revenue, and produce, until the entire payment of this loan and the interests due thereon."
Franklin considered that "extravagant" but Newhouse rejoined, "this was usual in all loans and that the money could not otherwise
be obtained". Franklin retold in this lengthy letter, "Besides this, I was led to understand that it would be very agreeable to
these gentlemen if, in acknowledgment of their zeal for our cause and great services in procuring this loan, they would be made
by some law of Congress the general consignee of America, to receive and sell upon commission, by themselves and correspondents
in the different ports and nations, all the produce of America that should be sent by our merchants to Europe."
Talk about shooting the moon
While Wikipedia says DeNeufville was Mennonite, Franklin concluded with this colorful -- and bitter -- remark , "By this time,
I fancy, your Excellency is satisfied that I was wrong in supposing John de Neufville as much a Jew as any in Jerusalem, since
Jacob was not content with any per cents, but took the whole of his brother Esau's birthright, and his posterity did the same
by the Canaanites, and cut their throats into the bargain; which, in my conscience, I do not think Mr. John de Neufville has the
least inclination to do by us while he can get any thing by our being alive. I am, with the greatest esteem, etc., ✪ B. Franklin."
Perhaps it was just an expression based on an earlier stereotype?
*Bigelow, 1904. The Works of Benjamin Franklin, Vol. 9 Letters and Misc. Writings
@steinbergfeldwitzcohen
o to Uganda and Ugandans were willing, but NO Zion had to have Palestine, and they got it through war, deception, and murder.
It was funded by usury, as stolen purchasing power from the Goyim.
The fake country of Israel, is not the biblical Israel, and it came into being by maneuverings of satanic men determined to
get their way no matter what, and is supported by continuous deception. Even today's Hebrew is resurrected from a dead language,
and is fake. Many fake Jews (who have no blood lineage to Abraham), a fake country, and fake language. These fakers, usurers,
and thieves do indeed have their eyes set on Patagonia, what they call the practical country.
I've been to TOO. However I can't bring myself to start commenting on a white nationalist website. I will admit I am unable
to articulate this discomfort presently.
As to your point about Marx – I actually forgot about his work on the JQ. The Saker, who is a columnist on this site, referenced
Marx's essay on the JQ some time ago. I must have not read the whole thing or I'd have remembered it. I didn't know that Marxism
originated with anti-Semitism, but that is fascinating. I have encountered some Marxists in my time and they focus exclusively
(predictably) on the cis-white-male patriarchy, or whatever occupies their brainwashed minds after an Introduction to Gender Studies
class.
@Anon repudiated
at will, capitalism cannot function."
Is this children's capitalist theory class time? throwing around some simple slogans for a susceptible congregation of future
believers?
Should be quite obvious that people, groups of people, if not whole nations , can be forced and or seduced into depths by means
of certain practices. There are a thousand ways of such trickery and thievery, these are not in the theory books though. In these
books things all match and work out wonderfully rationally
Then capitalism cannot function? Unfortunately it has become already dysfunctional, if not a big rotten cancer.
@J Adleman
Ezekiel 21:25 25 'Now to you, O profane, wicked prince of Israel, whose day has come, whose iniquity shall end
Jeremiah 5:9 Shall I not punish them for these things?" says the LORD. "And shall I not avenge Myself on such a nation as this?
As Jesus said which of the prophets have you not killed or persecuted? The truth hurts. As for me I do not hate Jews ..I feel
terribly sad for a people that are capable of greatness and squandered the gifts given to them by God. Are you a holy nation?
Don't make me laugh. Repent. Your time is coming. No more running and hiding. Deception will no longer save you only acceptance
of the Messiah.
he can't be bargained with,he can't reasoned with,he doesn't feel pity,remorse,or fear " In other words – a 'culture' as a
PSYCHOPATH it's a well-oiled psychopath support group
Hey! Don't mention anything a Jew ever did, especially usury, or else the entire cult will go up in a holocaustal mushroom
cloud of emo nasal whining. In Judaism you've got a fanatical sect that systematically selects and brainwashes its members to
inculcate extreme values of two Big Five personality axes: high neuroticism and low intellect (where intellect means open-mindedness.)
Note the existential crisis triggered by a straightforward lecture from The Society for the Study of Unbelievably Obvious Shit.
Of course Israel is holocausting the Palestinians. This is what happens when the founding myth of a nation is, We wiped em
all out and then they wiped us almost all out so now we gotta wipe em all out etc., etc., etc.
@J.W. en a
narcissist and a psychopath is that the former need people to like them whereas psychopaths genuinely could not care less (although
they learn early that acting as if they do can be very helpful , as can always trying to elicit sympathy etc).
As I noticed while reading a few books on psychopathy (I was inspired to after reading Steve Job's biography) – their whole 'culture'
is structured as a (collective ) PSYCHOPATH.
It seems that (collectively) they cannot care about others even if they wanted to. Due to their sickness
I am not saying they are all that way – but overall their 'culture' seems to be that way
The Sacklers occupy a hoity-toity rung in the philanthropy universe, as they have given enough $$$ to Harvard for H to paste
their name on its museum housing I believe its whole Asian art collection.
Students have now protested Harvard's high-profile gift of probity and cultural status to the Sacklers via, literally, an "Aushangerschild"
on a major university museum. Harvard protests back: Jeez, if we don't take the Sacklers' dough we might be obliged to stop taking
the dough from Exxon, etc.
@Anon ou are
right that loans should be repaid – it is immoral to allow a well connected mafia to change all the laws and remove protections
while pushing up prices of everything because it suits the lender (who has a licence to print).
They basically lend money that does not exist and get interest for that. So the more sheeple are tricked into borrowing the better
for them, but the worse for everyone else
They should not be allowed to bribe politicians to remove all the protection that was there since 1920s I think.
It's a marriage from hell: easy to bribe Anglosheep meets the masters of predatory bribing who own the printing press
That stupid cuck Trump just got impeached by the House. Thats a good lesson to everybody how much good Jew-ass kissing does
for you .you get stabbed in the back anyway lol
Couldn't have happened to a more deserving and treacherous scumbag!
But he should have been impeached for his treachery to the constitution and to the American people for his slavish devotion
to all things Jewish!
True, but irrelevant. The Jews that matter don't read the Talmud or believe in "Adam and Eve."
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
Frankly, it's these traditional religious notions of "anti-semitism" that get in the way of understanding what is, at the core,
an ethnic issue. It's Sheldon Adelson, the Zionist entity in Palestine, and the ADL that are the problem, not some looney-tunes
rabbi living in Brooklyn.
The other side of the explanation is the lacking of reaction of the victim, the american people. The least that the people
that loot the world trough and with the USA power should do, is ,at least ,let us,the american people, a free ride.
Not illegal in the Talmud either but most certainly illegal in all of the countries that DynCorp was caught profiting from
this type of business. For some reason they never seem to suffer for their exposure suggesting that they may be wielding the same
influence that Epstein had over our elected officials.
We dont have to get back to the Singer of this world but to our own politicians ,that allowed them to do this to us,and to
the world.In this kind of abusive realtionship the 2 sides are to blame.
@Just passing through
h and then moved over to the West with their newfound gains, buying up properties, forcing prices up for the natives. The
western corporations not only wanted cheap products to export back to the U.S., but they were also developing a whole new market
– Chinese consumers who would buy their products as well. Double plus good!
And once in the West, the Chinese and the Indians stick to their groups. They hire their own, promote their own, do business
together. A lot of corruption, money laundering, cheating, taking advantage of and bending laws. Rule of law? Code of ethics?
Morals? Do unto others? They never learned it. Opportunistic dual citizens.
I would not count on the effect of the electric shock on the leftist thinkers. The role of Jewish Bolsheviks in the Cheka,
NKVD, GULAGs, genocides by famine has been known from the very beginning and yet it left no impact on the leftist thinkers.
It unfortunately has not had much of an effect on a lot of people in the West, who remain ignorant or in denial of the role
played by Jewish Bolsheviks in historic mass murders and totalitarian repression.
Waiting for the Hollywood movie to tell the story.
This is why you need to start with Zarlinga, as there is no BS to lead you astray. Hudson tends to drill the bulls-eye too.
There is so much deception in the field of money and economy, that it is easy to get caught up in false narratives, like one-born
free libertarianism. Usury flows fund the deception, even to the point of leaving out critical passages in translations, such
as in Aristotle's works. Or, important works are bought up and burned.
Michael Hudson is the leading economist resurrecting Classical Economics. Reading all of Hudson and Zarlinga will take some
time and effort, but it is good to take a first step.
@Anon According
to Wikipedia : " The armed rebellion of the Mau Mau was the culminating response to Colonial rule . Although there had been previous
instances of violent resistance to colonialism , the Mau Mau revolt was the most prolonged and violent anti-colonial warfare in
the British Colonial colony. From the start the land was the primary British interest in Kenya ."
Just as the Kenyans suffered the consequences of British colonialism , the "Palestinians will suffer
the consequences of Zionist colonialism until Israel's original sin is boldly confronted and justly remedied "
foreignpolicyjournal.com
distinction of Jewish investors versus gentile investors – on average, of course – is their use of bribery to get the force
of government behind them. Rather than taking a bet about some group being able to pay back some bonds and letting the chips
fall where they may, Jews start bribing or influencing politicians to force that group to pay back the bonds.
Buy some bonds, charge outrageous fees, bribe officials in some form or other, get govt to force the payment of bonds and outrageous
fees. Rinse and repeat. Jews have been doing this in some form aor another for 1500 years. It's why the peasants get a tad angry
at both the Jews and their bribed politicians/nobility.
Trump is in league with the Jews? Yeah, who isn't? Obama's lips are still sore from kissing Jewish Wall Street bankers' asses
(notice that none of them went to jail). Same with the Clinton's.
You can get politicians to pass all sorts of laws in your favor if you've got enough dirt on them. After all, your side owns
the media, Hollywood, academia, the courts, the banks.
If dirt doesn't work, you can always threaten to impeach them in order to get what you want.
But Trump is also revealing every last dirty one of them (accidentally or on purpose). People see them now.
J Adelman comes out swinging. He's such a tough guy. But does he make sense? Does he care if he makes sense? The writer is
talking about those Jews who are vulture capitalists. He's not talking about every Jew. Isn't it a little odd that nearly all
of these funds are run by Jews? Can your corrupt mind accept that fact and address the question? Or are you going to bore us with
your religion and by that I mean your obsession with anti-semitism, which is your religion.
'Hmm -- The day after Trump in inaugurated for his second term -- will Iran be in his crosshairs? We need to think very
seriously about that!
My guess is Iran is in the crosshairs. Trump probably promised he'd start the war as soon as he was elected the first time
-- but he putzed around, and now it's almost 2020. Adelson et al are pissed -- but Trump's got a point. If he starts the war
now the unknown Democrat will win -- and do you trust their word instead? They just gotta trust Trump. Let him get reelected
-- then he'll come through.
This is one of those cases where I'll be happy to be proved wrong -- but such is my suspicion.
Stop splitting hairs. Is this the best you can do? Are you one of Lot's cronies? I don't normally address petty matters of
this kind but Joyce is describing a multitude of sins and misconduct orchestrated by various Jewish financiers around the globe.
It is not merely one phenomenon; thus, 'phenomena' fits. Go troll someone else.
Typical Jew baiting article. Mitt Romney isn't a "Jew" Ashish Masih isn't. Many more examples of gentiles taking advantage
of their brothers. May as well consider the Walton family of Wal-Mart to be vultures as well since they benefit the most from
this system, they're so called Christians, not Jews.
The problem is capitalism. Author seems to suggest that a moral economic system has been corrupted. The system was designed
in an era of widespread slavery folks. Its an immoral system that requires theft, slavery, war, immigration, all the things you
hate, to survive. The system is working exactly as it is designed to work. Exploit workers, the environment and resources, shift
all the profits from workers to the owners of capital, period. Welcome to the late stage, it eats and destroys itself
From the days of the colonists slaughtering the Injuns and stealing their land. The days of importing African slaves, and indentured
servants. The days of child labor and factory owners hiring Pinkertons to gun down workers who protested shitty wages and working
conditions. The good ol days of the gilded age. Now the age of offshoring to China or some other lower wage nation. Overthrowing
leaders not willing to let their resources and people be plundered and enslaved, driving refugees to our borders fleeing violence
and poverty. Importing H1B workers to drive down wages. It was always a corrupt system of exploitation/theft/slavery. This is
nothing new and doesn't require "Jews" to be immoral.
And all these so called "Christians" like Pastor Pence approve. Usury and capitalism run amok. I'm sure Jesus is smiling down
on all these Bible toting demons who allow their fellow man to be exploited by the parasites. Sad!
Good for Tucker. He has his moments I'd watch his show if he wasn't a partisan hack. But that will never happen working for
Fox or any other corporate media.
Trump loves his daughter and she is married to a Jew. If they're not getting their way, I could see them telling Trump: "Sad
what happened at the Pittsburgh synagogue, isn't it? Sure hope nothing like that happens to your daughter."
I don't envy Trump. He not only is up against the Democrats, but he is also fighting the globalist neocons in his own party.
Both parties want open borders and more war, something Trump does not believe in. As far as I can see, he's throwing them bones
in order to shut them up. If he gets elected again, which I think he will, we might see a different Trump. Who knows.
Rather amusing to read our resident Jewish apologists carrying on about the absolute sanctity of the necessity of collecting
debts to the functioning of the capitalistic system. These nations and corporate entities that are now in thrall of the Wall Street
Jews , were herded into debt by that other faction of the capitalist system, the dealers in easy money. Snookering the rubes into
lifelong debt, telling them that money is on the tap, promoting unsustainable spending habits and then let the guillotine come
down, for the vultures to feed on. They are two sides of the same coin.
Its damned funny that the rich Jews nowadays are absolutely addicted to usury, rentier activities, and debt collection, when
the Bible itself condemns such activities. But they are our elder brothers in faith according to some.
Carnegie was a Protestant. The Protestant cancer serves it's Jewish masters. Read 'The Jewish Revolutionary Spirit' by E. Michael
Jones. There is definitely a revolutionary nature to the international Jew just as there is to their Protestant dupes. Jewish
nature is to subvert the natural order and the west was built by the guidance of LOGOS. The Catholic Faith created by God guided
the creation of the west. These Jewish exploits are a result of the Wests rejection of its nature and its enslavement
1. rich or poor, creditor or debtor, in the final analysis, ultimately, all will become equal in the grave. the filthy rich
might decide to lay their corpses in coffins made of gold, but it will be in vain. the sorrows and the joys of this fleeting world
shall quickly pass like the shadow.
2. talmudics feel the need to accumulate money in order to have sense of security since they were stateless for two millennia.
paradoxically, amount of wealth is indirectly proportional to a sense of security, provoking backlash from aggrieved host people.
3. establishment of State of Israel did not reduce the need for the accumulation but has only heightened it since now talmudics
feel the need to support it so that she could maintain military superiority over neighbouring threats.
4. as long as Palestinians are not free and Israel does not make peace, talmudics will continue to meddle in American politics.
if you don't want to save the Palestinians for the sake of humanity and truth or justice, at least you should do it for your own
sake.
5. loan sharking, vulture whatever, etc., is the ugliness of big capitalism with capital C, what is beyond sickening is the promotion
of sodomy. if one becomes poor or homeless, it's a pity. to go against nature is an abomination.
6. by using such words as "homosexual" you have accepted the paradigm of the social engineers and corruptors, and are therefore
collaborating with them. words have consequences since that is how we convey ideas unless you own Hollywood and can produce your
own moving pictures too.
7. talmudics is a better word than as a great American scholar says, since people who promote sodomy are absolutely opposed to
the Torah (O.T.). those who still struggle to follow it couldn't care less what happens to benighted goyim, only becoming reinforced
in pride of their own purity as opposed to disgraced nations. thus, practically, they too are talmudics, alien to the spirit of
the ancient holy fathers and prophets of Israel. the word "Orthodox" has been stolen and now has lost all meaning or it means
the exact opposite of what it originally meant.
8. Blessed are the meek, for they shall inherit the earth. Matthew 5:5
Well there's nothing wrong in principle about specialists in valuing distressed debt and managing it nuying such debt and using
the previously established mechanisms for getting value out of their investment. So the problem is how they go about enforcing
their rights and the lack of regulation to mitigate hardship in hard cases.
Still it is notable that it should, overwhelmingly be a Jewish business and such a powerful medium for enriching Jewish causes
and communities at the expense of poor Americans.
George Bush needed Tony Blair's support to attack Iraq , Donald Trump now has the support of Boris Johnson to attack Iran :
"Boris Johnson refuses to rule out military intervention on Iran ." metro.co.uk
It is said that the "deep state " removed Theresa May from office as she was "too soft" on Iran . As you suggest the attack
will not happen until Trump's second term unless, in the meantime , there is a false flag attack like 9/11 which can be blamed
on the Iranians .
While Whites theoretically still have the numbers to affect/determine the outcome of elections, a majority of Whites usually
stay home because they are tired of the 'evil of two lessers' choice they are offered -- even voting for Trump got them little/nothing.
I said nothing of an electoral solution to America's problems the problems will not be solved that way.
That scary thought has crossed my mind, too, Art. I've even started wondering if this whole impeachment circus is really
part of an elaborate plot to guarantee Trump's re-election. I mean, would Pelosi's insane actions make the slightest sense otherwise?
And everyone has noted how this is such a 'Jew coup,' haven't they? It all looks so suspicious
What our Jewish friends have done to Argentina, through maneuvering the elections, killing dissidents, and marking territory,
is a cautionary tale to anybody woke enough to see with their own eyes.
@Mefobills
mo.. maybe other than when 100% of the Ummah agree on something, I read that could remove a surah of the Quran, like a voice of
God. That rhymes nicely imo.
Of course how to judge which ruling to use? I agree, it brings in a casuistry into the faith that generally helps to confuse..
I don't know much about it though yet.
I think Islam preaches a decent message, but the average practitioner is open to misinterpret it quite a bit. This is a failing
of the teaching.. but I think Mohammed's message was corrupted like Christ's message pretty much straight after his death. Gospel
of Thomas and Tolstoy's rewrites all the way for something closer imo.
@sally n in
iniquity, and that is where your eye should gaze, not necessarily at the FED or any central bank.
The debt money system and finance capitalism is state sponsored usury, and is a Jewish construct.
Vulture capitalism is simply vultures buying up or creating distressed assets and then changing the law, or using force to
then collect face value of the debt instrument or other so called asset. Vultures will use hook or crook to force down what they
are buying, and hook or crook to force up what they are selling. God's special people can do this because when they look in the
mirror, they are god, and are sanctioned to do so.
Maybe the vulture should replace the bald eagle as America's favorite bird since our dear shabbos goy President Trump and cohorts
are undermining the First Amendment and trying to make it a crime to criticize Jews and/or Israel. Oh and don't think I am promoting
the other Zionist and their shabbos goy on the demshevik side. The Jew CONTROLS both sides and "our" two party system has become
Jew vs. Jew, not republican vs. democrat. Lenin said that the best way to control the opposition was to lead it and (((they)))
are at it AGAIN.
@Ilya G Poimandres
zies, who twist scripture. Judaism, especially Talmudic Judaism is Kabala and utterances of the sages, and it morphs and changes
over time. For example, after Sabatai Sevi, the Kol-Neidre was weaponized, and this construct is used by today's Zionists to wreak
havoc. Before Sabatai, there was Hillel, who weaponized usury.
Yes, I agree about Christianity changing quite a bit. In the first 300 years it was much different than today, especially after
the Arien controversy was settled by Constantine's maneuvering of Bishops at council of Nicea. For example, before; reincarnation
was part of Christian doctrine, and after; reincarnation was excluded.
I have long maintained that libertarianism/capitalism is really like a kind of Calvinism for atheists. Calvinists used to assume
that, since whatever happened was God's will and God's will was invariable good, then whatever happened was good. Likewise, many
modern cucks seem to have just substituted The Market for God. Morally speaking, it all lets man off the hook for anything that
results–especially when those men happen to be Jewish financiers!
No, boys and girls, The Market is not inherently good. It requires that a moral system be superimposed on top of it in order
to make it moral.
@Anon k of
this MI6 asset (and potential killer) who tried to fleece Russia, you probably can benefit from watching a movie by Nekrasov about
him. See references in:
It looks like it was Browder who killed Magnitsky, so that he can't spill the beans. And then in an act of ultimate chutzpah
played the victim and promoted Magnitsky act.
There is no defending these jewish malefactors. It has been pointed out that immorality is a disposition to be found in every
ethnicity. The problem is that the jews with that disposition are more clever than folks from other ethnicities with the same
dispostion. Being more clever, they are outstandinly better at depradation. I don't see how and why the recognition of the existence
of evil jews justifies the author's hatred of jews as a whole.
Colin, I'm going to assume this is a rhetorical question, as there is not one example that would cause you to suspect there
is really any doubt about the types of organizations that the Sacklers are donating their ill-gotten wealth to.
@Digital Samizdat
ocities, including the murder of civilians, predominantly Jews and Poles under the Nazi German administration. The term
Banderites was also used by the Bandera followers themselves, and by others during the Holocaust, and the massacres of Poles
and Jews in Volhynia and Eastern Galicia by OUN-UPA in 1943–1944.
@Digital Samizdat
and infest England, is not well understood by the average Goy.
Our modern world is a direct line back to this big-bang event. Christian Zionism goes back much further in time than to just
Cyrus Scofield and Darby. Our Jewish friends in Amsterdam were even publishing bibles at great expense, to then push the narrative
that the "people of god and old testament" deserve to return to England.
(The usurers had been previously kicked out of England by King Edward in 1290. The usurers had been plying their game, and
"putting house to house" to where English citizens were being dispossessed from their own lands.)
@Anonymouse
y Jewish as were the Bolsheviks of a hundred years ago, and they have greatly benefited from the political immunity provided by
this totally bizarre inversion of historical reality. Partly as a consequence of their media-fabricated victimhood status, they
have managed to seize control over much of our political system, especially our foreign policy, and have spent the last few years
doing their utmost to foment an absolutely insane war with nuclear-armed Russia. If they do manage to achieve that unfortunate
goal, they will surely outdo the very impressive human body-count racked up by their ethnic ancestors, perhaps even by an order-of-magnitude
or more.
@Mefobills
ted into being seen as the greatest victims, a transformation so seemingly implausible that future generations will surely
be left gasping in awe.
Aided by no small part by chutzpah. The uncanny ability to ability to call black white and to call good evil. With no cultural
love of truth to anchor them in reality. Thus detached, they are free to invent an alternate reality. I wonder if they do not
suffer from cognitive dissonance. They seem genetically protected from it.
They are actually self-deluded and want to infect the rest of us with their visions of victimhood.
@Realist ;
votes these greedy corrupt politicians into office? Hint: It is Whites who are the majority.
My first comment to you was #256 -- again "for the record": I did not give enough of a damn about you or your idiotic
statement ("Stupid Whites are responsible for allowing this to happen") to comment/reply to you before you mentioned voting
.
"LOL"
And I don't appreciate it when people attribute specific words, views, or thoughts to me that I did not express
-- make a note of it, asshole.
Descendants of this immigration wave are the liberal jews pushing the jew coup against Trump. This is why they are from Ukraine
(former pale of settlement area) or Russian haters.
To my mind, Trump is a Christian Zionist and has naturally allied with Bibi and the Zionist religious factions, such as Chabbad/Likkud.
Since U.S. has been fully infiltrated, then having Mossad and its agents on your side, is a strategy to keep from being suicided
by the deep state, like JFK.
I'm willing to give Trump some lee-way, given the circumstances of our current reality.
Only when operating within the confines of Western Christian culture, or forced into western education by the Tsars, did Jews
break free to be productive. And even then that production came at high cost to the host societies.
In other words, a good argument can be made, that if Jews had never infiltrated into Western Civilization, then said Westerners
would have been much better off.
Sorry if real history is butt-hurting.
Today's Iran is another model on how to deal with the Jew problem. Jews are limited there in the same way as was done in Byzantium.
@Colin Wright
ow" href="https://www.counterpunch.org/2019/12/18/impeachment-what-lies-beneath/">over at CounterPunch
So here's my entirely speculative tea-leaf reading: If there's a hidden agenda behind the urgency to remove Trump, one that
might actually garner the votes of Republican Senators, it is to replace him with a president who will be a more reliable and
effective leader for a military attack on Iran that Israel wants to initiate before next November. Spring is the cruelest season
for launching wars.
His story is that the Israelis consider Pence to be more reliable. Who knows
No wonder that the majority of Jews do not want to live in the Jewish State. too many Jews there.
They are quetching about antisemitism while attacking the western civilization -- from the assault on the First Amendment to the
cheerleading for more wars for Israel in the Middle East.
No one keeps the Jews from joining their brethren in Israel. There is no need to sing "Next year in Jerusalem." Enough already.
Just go there -- and stay there.
@Mefobills
ons that distract us from seeing the top of the pyramid. However, it would appear that Marx finally gets to finance in Volume
Three of Capital. I could read the whole thing myself, but I would rather simply ask you what you think. How do you reconcile
Marx the Illuminati Jewish agent with Marx the perspicacious critic of capitalism? Where were his real loyalties? Did he stick
the dynamite at the end of his magnum opus instead of at the beginning in order to hide it from his finance masters, whom he knew
would never actually read that far? Was he attempting to assuage a guilty conscience by sneaking the truth into a footnote?
@annamaria
are quetching about antisemitism while attacking the western civilization -- from the assault on the First Amendment to
the cheerleading for more wars for Israel in the Middle East.
The complete lack of shame it takes to act like this is amazing to me. Also the hubris it would take. Though if you see yourself
as a chosenite, those behaviors fit.
Apparently if you hang around then long enough, the behavior is contagious. Biden's shady Ukrainian dealings, which are 100%
real are being denied and instead projected onto Trump. It's infecting our politics. The shabbos goy are emulating their masters.
@redmudhooch
ts since the cave but that is not capitalism. Capitalism is Usury – profit for the sake of profit independent of usefulness,
welfare, community, lifestyle.
.
And as was argued by the great German economist/sociologist Werner Sombart, Capitalism was really invented by Jews However as
E Michael Jones has argued, Protestantism – particularly Anglo Calvinism- was a backsliding of Christianity into Jewish materialism
– the spiritual basis for capitalism. So everything seemingly goes around and around. Capitalism cannot be blamed solely on the
Jews but Jews can never be abstracted from the evils of capitalism. We have to keep both balls in the air
Grab a small piece of paper. Add some fancy, symbolic stuff to it, like a fire-breathing dragon, with big, burning eyes, named
' Nimajneb , the faerie overlord, that hovers over an upside-down pyramid. Oh, and you'll need a number, let's say, '100.'
Done. Print it out. Walk to the nearest person, say, "I've got here a $100 bill," and see what happens
Yet, the FED can take the same little piece of paper, sprinkle some magic dust on it, et voilà, you've got your $100 greenback
[aka IOU $100 banknote].
Money makes the world go round?
Spin out of control into a state of utter madness, I'd say.
@Buddy can
read through economic history or texts and spot the lies and fakery. So where does that leave the average layman to turn and not
be hoaxed?
Sorry it is so hard out there to navigate. I commend you for trying. I'm feeling pressure to write a book, because even Hudson
does not initiate people from level zero up to someone advanced enough to resist the hoaxers.
Richard Werner is pretty good, but you have to navigate around his favoritism of private banking. Money is law.. and he doesn't
want to acknowledge that. This is what you run into, and the only way is for you to navigate as best you can and see if things
ring true.
Real science has been suppressed and removed from the public sphere. Or it's been perverted for mass surveillance and social
command and control and dual systems.
I fully believe that execrable demons like Soros never die because they're getting baby blood from orphans passed through some
heinous engine into their vile bodies.
Meanwhile, we're forced to deal with nonsense like anthropogenic climate change, string theory, dark matter and other Jewry
the sole purpose of which is to centralise power over mind and body in the hand of Jews and Masons.
The Zionist racial bigotry behind S447 was foreshadowed by Israel Singer of the World Jewish Congress in 1996:
"More than 3 million Jews died in Poland and Poles will not be the heirs of Polish Jews. We will never allow it. We will
harass them until Poland is ice covered again. If Poland fails to satisfy Jewish demands, it will be publicly humiliated and
attacked internationally . – secretary general of the World Jewish Congress"
Notice the guy's last name – Singer. This is another form of Jewish mafia vulture capitalism, using any means to hurt the masses.
What is S447?
Section 3 of Act 447, the provision for heirless property, is the part that reveals the law's intent. Under existing laws,
heirless property becomes the property of the state. After WW2 there was a lot of property without owners (whether owned by
Poles or Jews), and it has been sold ever since. This law has the potential to cause national havoc, as the vast majority of
Poles own their own homes. Even in the relatively cosmopolitan capital of Warsaw, 79% of city-dwellers own their homes and
apartments.
Under S447, any Polish-Jew or descendent of said Polish Jew can lay claim to property to property deemed heirless and sold
after the war, thus all land that can be claimed to have been owned by Jews before 1939 will be transferred to the global Jewish
diaspora. If this law is put into practice, approximately 30% of Warsaw homeowners will be forced to pay "rent" to random Jews
claiming to be Holocaust survivors or their descendants in New York City and Tel Aviv.
How would this "law" work in Poland?
Under S447, any Polish-Jew or descendent of said Polish Jew can lay claim to property to property deemed heirless and sold
after the war, thus all land that can be claimed to have been owned by Jews before 1939 will be transferred to the global Jewish
diaspora. If this law is put into practice, approximately 30% of Warsaw homeowners will be forced to pay "rent" to random Jews
claiming to be Holocaust survivors or their descendants in New York City and Tel Aviv.
Trump was "impeached" for not giving arms freely to ZUS controlled Ukraine. The arms have been used to shell and kill civilians
in East Ukraine. Yet, Trump should be impeached for pushing this Jewish Mafia vulture like capitalism on Poland.
Pressure from the US government is only reason this law is even being considered. While Donald Trump appeals to the West
and Polish patriotism in his speeches, his government's actions say something radically different. Last February, US Secretary
of State Mike Pompeo demanded the Polish state pass this law. Last August, the American congress urged more pressure on the
Polish state to get S447 through.
"Tucker Carlson's recent attack on the activities of Paul Singer's vulture fund"
Yup, the bricks and mortar outdoor gear shops, Cabela's + Bass Pro need 2 HQs. Nebraska could have stopped it but instead chose
farm subsidies, forever war, and pensions for government workers. To have that much spending excess in the government spending
you need high efficiency from the civilian sector.
The reaction in Nebraska seems to be a big yawn. My guess is Cabela was constantly trying to reduce their state and local taxes,
at some point keeping the low wage retail jobs while dumping the high wage HQ jobs made sense, short term, so they sold Sidney
NB down the river.
Candidate targets Sasse on Sidney response, other issues
"Nobody tried anything," was the compaint(sic) Innis heard on his visits to the struggling community.
Well mefo let me tell you a funny story.This guy i know made some nasty comments about jews and not long after he got cancer.His
doctor,a jewish cancer specialist put him back on his feet.
Know what the funny part is.He still makes the same comments.
Few escaped the pervasive prejudice, however. In the early 1900s, Dr. Paul Ehrlich, a German Jew who discovered a treatment
for syphilis and is considered the father of chemotherapy, popularized the term "magic bullet" to describe a medical compound
that would "aim exclusively at the dangerous intruding parasites" yet not "touch the organism itself."
But though Dr. Ehrlich was awarded the Nobel Prize in 1908, he was not made a full professor at a university until 1914, a
year before he died. (That posting was at the University of Frankfurt, in the year of its founding.) In the 1930s, as the Nazis
came to power, his name was removed from textbooks and taken off Frankfurt's street signs. Paul-Ehrlich-Strasse regained its name
only after World War II.
@ANZ of bankers
and religious fanatics or a land-based theocratic toy-state of Israel.
It is the spirit of parasitism that is "infectious" and works against patriotism. Hense the local profiteers, from Rumsfeld
to McCain, Biden, Brennan, Pelosi, Rubio and the likes who have been hastening the demise of the US for the immediate monetary
compensation tied to the allegiance to the Jewish cause. The zionized NYT and the presstituting stink tanks the Atlantic Council
(affiliated with the openly subversive Integrity Initiative), American Enterprise Institute and such have been working openly
against the US interests and for ziocon interests.
"Herzyl admired the Germans of the day, and wanted Jews to be like the German's he so admired. Herzyl thought that if Jews
had their own country of Zion, they would settle down and become normal people."
-- The dream was an illusion. When the meme "is it good for the Jew?" beats all and any moral principles, then the world gets
a nation of thieves and murderers quetching non-stop about their eternal victimhood. Pathetic.
From the position of the USA Secretary of State, Madeleine Albright pushed for the bombing of the Federal Republic of Yugoslavia
in 1999, when NATO planes bombed without a UN mandate. She also supported the jihad in Bosnia during 1992-1995, and the manipulation
of the facts about Srebrenica, but also personally earned from the privatization of Kosovo Telecommunications. She should,
therefore, bear the consequences of her political decisions and acknowledge responsibility for the bloodshed, in which thousands
of civilians were killed.
But in fairness, the Koch brothers are no damn good for the nation either.
No, they are (were) not. However, they also got a lot of negative media attention while these Jewish vulture capitalists
have mostly been given a pass. Also, whites are about 55% of the population while Jews are about 2%.
@silviosilver
er because the debt was already in default or was at imminent risk of defaulting, which is why the debt sells at a heavy
discount, since existing debt holders are often happy to sell cheap and get something rather than hold on and risk getting
nothing.
If A enters into a contract with B to borrow money, and then fails to be pay it back to B, why should C be able to come in
and buy the debt from B and expect to be paid back? A entered into a contract with B, not C. And why should C expect to be able
to employ the machinery of state coercion to force A to honor a contract that A didn't even make with C in the first place? Mr. Anon , says:
December 21, 2019
at 7:37 pm GMT
@Thales the Milesian
ters sent representatives to a small central government. This form of government was usurped in 1913, by the "money powers,"
and these money powers use elections as a veneer to sanction their behind the scenes rule.
Here is another quote from the Ivan the Terrible article, which sums things up:
n 1601, just a few years after Ivan's death, Russia was starving, leaderless and under attack. Again, under elite rule,
with no ruling monarch, Russia was plunged into years of war and violence. Fighting oligarchy has been the traditional job
of any monarch and is the ultimate purpose of government.
@Robjil olves
to the "were so smart" and look at the medical advances, nobel prizes, etc. we've contributed.
Conveniently left out of account, is that these advances would have been done anyway in their absence. The goyim do possess
the intelligence and fortitude to solider on without jews in our midst, and in-fact, when jews are absent from our civilizations,
advancement accelerates.
The best thing for a jew to do is turn his back on the tribe, and re-join humanity.
To any Jew reading this . walk away from the tribe. Man-up and get some intestinal fortitude, leave the parasite method behind
you, and join humanity.
I'm feeling pressure to write a book, because even Hudson does not initiate people from level zero up to someone advanced
enough to resist the hoaxers.
Have you considered writing articles? Series of articles could later on become raw material for a book. Perhaps easier path
to take and could perhaps provide useful feedback along the way.
It sure looks like you could write far more informative and interesting articles than many writers here on Unz because of your
broad perspective. The big picture is always more interesting and I agree with you about the importance of the subject.
@Mr. Anon d
by these degenerate types of people in order to take illicit gains.
In the U.S., (I'm an American), these usury flows funnel into the press – to where the press becomes owned, so that these Oligarchic
interests can continue to take rents and unearned income through their various schemes.
I might add, our intelligent UNZ readers, have noticed that the U.S. mainstream press is predominantly Jewish owned. Intelligent
people notice patterns are some of us are unwilling to look away. No amount of deception through the mainstream press can reduce
the revulsion moral people instinctively feel when watching vultures operate.
@Bookish1 ing
whiteness has never been more urgent.' By Mark Levine"
When challenged for apparently encouraging genocide, Levine and his cronies answer that "whiteness", as they are employing
the term, is merely an accidental property as opposed to an essential quality. So stripping an organism of its whiteness will
not diminish it to any significant degree, does not threaten its very existence, merely prunes it into a more acceptable shape.
And yet when some poor misguided soul has the temerity to put up a sign saying "It's Okay To Be White", the Mark Levines of
the world have a cow. Suddenly, "white" is not a mere accidental quality at all.
The Koch Brothers (what's left of them; one died recently) are industrialists. They build things people want. They are innovators.
Yes, the Koch Brothers are filthy rich but they employ tens of thousands of people in the US alone.
Most importantly, the Koch Bros. are not parasitic, money-skimming extractors or wealth like the vulture capitalists described
by Joyce.
@Mefobills
s and schemes. The advantage of their technique is that it does not leave a positive trace but a negative trace. It is much more
difficult to notice absence than presence. You can't see all the money that is constantly being vacuumed out of the economy. It
doesn't leave a visible hole. And since none of us has ever witnessed firsthand what a rent-free economy might actually look like
(since they are not allowed to exist), we internalize the belief that such an economy goes against natural law, when in fact the
contrary is true.
Is there any way for you to link to more of your writing without giving away your identity?
Paul Ralph Ehrlich (born May 29, 1932) is an American biologist, best known for his warnings about the consequences of population
growth and limited resources.[2][3] He is the Bing Professor of Population Studies of the Department of Biology of Stanford University
and president of Stanford's Center for Conservation Biology.
Under S447, any Polish-Jew or descendent of said Polish Jew can lay claim to property to property deemed heirless and sold
after the war, thus all land that can be claimed to have been owned by Jews before 1939 will be transferred to the global Jewish
diaspora.
Let's make a variant of the Polish S447 applicable to Palestinians and find out how much the illegal occupiers of Palestine
like to see 'justice.'
@mcohen eir
factories full of low IQ but compliant workers. 3) The finance banking class who want new debts to pay off old debts. New Debtors
help fund a new debt cycle. 4) New people through population replacement, destroy the history and cohesion of the host country.
By de-racinating and destroying the host people, then Plutocrats can continue with their thefts unchallenged.
The debt money cycle is something like a pyramid, where it sucks upward toward plutocracy. Plutocrats and Oligarchs then emit
hypnosis and propaganda through the owned press to maintain their status. The funnel, or bottom of the pyramid wants new debts
and new debtors.
how do entities like Puerto Rico get so far in debt in the first place? so many problems because of what appeared to be
incompetent and comatose government.
Yes, ultimately the blame must lie with the voters: they picked douche, when they should have picked turd.
@Daniel Rich
l, Germany and Russia were both strangled. The US's turn is now. The US wants to strangle Poland too with this s447 law. Trump
should have been impeached for pushing this law on Poland.
Pressure from the US government is only reason this law is even being considered. While Donald Trump appeals to the West
and Polish patriotism in his speeches, his government's actions say something radically different. Last February, US Secretary
of State Mike Pompeo demanded the Polish state pass this law. Last August, the American congress urged more pressure on the
Polish state to get S447 through.
The real eureka moment for me came when I finally understood that money and debt were created at the same time on opposite
sides of the ledger. Only the two columns are not equal. One column grows through magic while the other does not. Once the
sorcery has been wrought, the creditors can simply sit back and wait as the mechanism eventually transfers all the wealth in
the world to them.
That is pretty good. Economics and most equations do not codify time. The equal sign cannot comprehend time, so most of the
math used in economics textbooks is telling lies.
Also, as I mentioned earlier, the bad guys put their thumb on the scale and call things equal. They do this with swaps of unlike
kinds. For example, you can build up housing prices with bubble economics, then collapse the economy by preventing new loans,
or doing call-in loans. That then forces prices downward. The bankster/vulture class then forces a swap of the asset to collapse
(cancel) the debt instrument. In this case, the house is transferred to creditor to erase debts. The house transfers to collapse
a money contract, which is a swap of unlike kinds. Vultures do the same thing, they don't necessarily want money in exchange for
the debt instrument they have bought.
With regards to double entry hypothecation – at the first instance of time, when debt instrument is signed ONLY THEN IS IT
A MIRROR. The credit created and the debt claims are 1:1 only at the instant (minus fees). Later in time, the debt claims grow
while the credit created does not. This is why debt claims destroy the natural world, as people rape the world converting forests
to board feet of lumber, to then make a price, to then fetch money.
In the first cycles of a loan it is ALL USURY. Worse it is seignorage. Seignorage is greater purchasing power now, whereas
the money is worth less later.
In the first cycles of the loan, the bank credit that you pay back, virtually none of it goes to paying off principle. The
credit decrements the asset side of your ledger (your savings go down) and then point at the banker, to increase the asset side
of his ledger. In the first cycles of the loan, your liability column (principle on the loan) goes down only slightly or not at
all.
This is pure usury, plain and simple. There is little to risk the loan emitter either, as a house is fungible and can be grabbed
by law. If a real asset is attached to the double entry ledger, it is to lower risk to the creditor (banker), not the debtor.
A double entry ledger can lie, or tell the truth. It would tell the truth if we used fees in this case and didn't hypothecate
new credit. But, then again, as you mention most people are locked into a hypnotic trance.
The proper way to do things is with sovereign money, not private corporate bank money at usury.
Whenever a nations people demand their sovereignty, they are attacked by the usual suspects. A lot of people don't want to
admit that both world wars were started by the finance class, with Jews as leading agents, to then demonize Germany.
Germany had the temerity under the Kaiser to run an Industrial Capitalist Mixed Economy using its own sovereign credit, and
then Hitler resurrected this system in 1933.
renegadetribune.com ; "US Court sentences Israeli CEO to 22 years
for scamming Americans , media ignore it ":
"The company specifically targeted the elderly and the vulnerable , one of over 100 companies perpetrating a scam called binary
options Israel permitted the scam to go on for a decade "
Will Trump pardon him before he leaves office ? The Jerusalem Post : " Trump pardons Israeli drug smuggler" after serving just
4 years of a 20 year sentence .
Contracts often have provisions for successors and assignees. The real question is whether the weaker party was sufficiently
strong to know what they were signing and have a good chance of being able to carry out their side of the bargain. Many sovereign
buyers are about as good risk as an unemployed man who wants to buy a car on credit.
@Just passing through
countries have been looted, the Jews have turned on the Whites and the latter are now crying that their criminal comrades
have now betrayed them."
It's called comeuppance.
But IQ doesn't explain fully but the readiness to believe the west . Congo is particularly a sad case. It has been fighting
a war for last 60 years .
As far as Belgium is concerned, that nations should be swamped to the brim with Congolese making it burst at the seams .
Who cares if some moronic Trump supporters get all shook up in Battle Creek . Who gives a toss ?
Trump is a fraud , a huckster a corrupt filthy white thrash
@geokat62 iven
the environmental damage said industries have caused. The vulture capitalists recover debt from failed states. A worthy cause
indeed, especially for investors.
mark green says:
December 21, 2019 at 9:53 pm GMT • 100 Words
@FvS
The Koch Brothers (what's left of them; one died recently) are industrialists. They build things people want. They are innovators.
Yes, the Koch Brothers are filthy rich but they employ tens of thousands of people in the US alone.
Most importantly, the Koch Bros. are not parasitic, money-skimming extractors or wealth like the vulture capitalists described
by Joyce.
@mcohen ly
able to secure large amounts of debt at very favourable interest rates. But this very soon changed. The vultures at GS, after
peering into the Greece's true financial records, knew how vulnerable Greek finances were and were betting heavily against Greek
sovereign debt by shorting it. This soon drove borrowing rates sky high which made it nearly impossible for the Greek govt to
roll over their short term debt obligations.
So, thanks to the vulture capitalists at GS, a large percentage of the Greek population has been suffering and will continue
to suffer under the austerity policies that were introduced in the wake of the financial crises.
@annamaria
d us out from the classic American tradition into the modern Zionist vision. These turncoats are a uniquely despicable lot since
they come with smiles and handshakes to kill the soul of our nation.
If history serves as a guide, it will take a government led by s strongman to right this ship. Democracy has proven too easily
corruptible by a private banking cartel that can print its way to dominance. This cartel will select, groom, install and maintain
their double agents into our political, economic and cultural spheres.
Here is the most plain lesson I can take from this: don't allow privatized money as the national currency.
@mcohen
oycott abroad. It did this by using a barter system: equipment and commodities were exchanged directly with other countries,
circumventing the international banks. This system of direct exchange occurred without debt and without trade deficits. Germany's
economic experiment, like Lincoln's, was short-lived; but it left some lasting monuments to its success, including the famous
Autobahn, the world's first extensive superhighway.1
Greece or any nation need not be in "debt". It is a game, a game of money printed out of thin air. All Greece has to do, is
give up the debt game. Barter game is a better game.
Roger Elletson, in his excellent book "Money: A Medium of Power"(Amazon), defines the purpose of usury: "Under the current
monetary regime, the effect, and indeed the purpose, of usury is to create compounding (think 'little by little') monetary claims
from usurers against the productive output and underlying assets of nations."
@Robjil n proportion
to the economies needs, as is what happened in Germany. Hitler laughed at the gold-men, and considered gold money as a tool used
by the Jews in their "international capital game."
Purchasing power was put into the German economy using Oeffa and Mefo bills. When the bills were discounted (redeemed) at a
bank, said bank turned around and presented the bills to the Central Bank (Reichsbank). Reichsbank then created new Reichsmarks
to pay off the Bills. In this way millions of marks of new credit flooded into the German economy. By 1938 the tax roles in Germany
had almost tripled, and it was not due to Gold or "international credit."
All that you and I really know about Mefobills is that information about the nature of money and economics is being freely
given and appears to be much appreciated according to other commenters. We don't know anything about what other activities Mefobills
is engaged in so your comment is nonsense thinly disguised as petty insults.
In Billions for the Bankers, Debts for the People (1984), Sheldon Emry commented:
Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to
a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without gold and without
debt, and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under
the heel of the Bankers. Such history of money does not even appear in the textbooks of public (government) schools today.
The underdog in Israel are Palestinians. The Chosen, in Israel and elsewhere, treat them like vermin. The Israeli chosen are
the most color-conscious and racist people in the Western world.
I would say WASP's and Jews savaged Germany in WW2. Perhaps then the Jews turned on the WASPS. But WASP's are a curious bunch.
They seem to have absolutely no loyalty to their own people. Look at what they have done to the English white working class. WASP's
also are very enamored of Jews. If anything their loyalty sees to be to the Jews and not their own
That may be the case in the Exodus dramas but the idea of 'who is thy brother' was already made clear earlier in Genesis –
the story of Abel and Cain. The later Jews and the Christians merely rediscovered what was the original plan : that is, that all
mankind share one brotherhood under one God.
So the Greek debt was caused by the purchase of too many weapons to defend against other countries like Turkey in NATO, an
American-led organization that promises to provide security to all its member states? So the populace of a treaty-bound ally should
suffer US-enforced austerity to have weapons so that vulture capitalists can enjoy large profits which they largely funnel to
Jewish causes while the Jewish state never is expected to suffer austerity for weapons?
@MrFoSquare
. The texts are diabolically equivocal and ingeniously interlocking. The exoteric interpretation is innocent (Torah) and full
of plausible deniability, the esoteric interpretation is malevolent (Talmud), and the ultra-esoteric interpretation (Kabbalah)
is Satanic. At the very bottom you have the ultimate esoteric language of gematria. The good news is that it is easy to see through
the necromancy once you understand how money magic functions. But this is only possible if we refuse the temptation of greed.
We have not done a very good job of resisting greed, and those of us who succumb to this temptation deserve to be swindled.
@Achilles Wannabe
re to be Jewish, people like Joyce would be on the case saying it was all da jooz, but he isn't very keen to blame WASPs for
the black-on-white violence in American public schools, makes ya wonder.
WASP's also are very enamored of Jews. If anything their loyalty sees to be to the Jews and not their own
Jews have always been present in the elite, WASPs identify with Jews because they identfy with the elite. I am quite sure even
to this day, WASPs and Jews are working together, it is just that the lower rungs of White society are being overwhelmed first
and it seems unlikely that these North-Eastern WASPs will feel the pain any time soon.
New England Neo-Calvinists never saw Southern and Border Anglo-Celts as brothers. Not at all. Thus the Civil War. As for their
closer kin, poorer Mayflower, etc., descendants, they mixed in with Germans, Scandinavians, and, horror of horrors, the Irish,
as they moved West. Bing Crosby was a Mayflower descendant.
Joyce's conclusions -- that any of this behavior is uniquely "Jewish" -- are absurd. The facts he cites refer to no more than
simply the standard operations of the market economy.
Some people just loath the very concept of credit and finance, so they reflexively praise any "analysis" which they believe
justifies their anger.
Others are casting about for somebody or something to blame for their own incompetence -- the poor, downtrodden debtor "victims"
-- and they too are happy to have their failings explained away.
On the substantive issues, this essay is just hot air.
@jack daniels
e financial system by allowing widespread bank failures. But the banking executives whose criminal incompetence and, in some
cases, corruption led to the crisis should definitely have been jailed, or at least permanently barred from ever working in the
industry again. (Liberal egalitarianism shouldn't so lightly get off the hook either. After all, it is lunatic egalitarians who
insisted that blacks and hispanics are just as good credit risks as whites, and who demanded that banks extend loans even to obvious
deadbeats.)
This is an infinitely more important issue than bellyaching about "vulture" funds and trying to portray them as uniquely Jewish.
@Wyatt what
they owe – in other words, to just give their money away?
And if there's a predilection among jewish men to engage in predatory lending and collecting tactics that is disproportionate
to their of the population, there's something about their genes or their culture that shapes them to be this way.
Okay, but so what? Given that there's nothing immoral – and much that is beneficial – about lending and borrowing, why should
this be any more of an issue than that west Africans genes help them excel at sportsball or east Asians genes at math and engineering?
Jewish elites are infinitely more tribal and ethnocentric than WASP elites, which is demonstrated by their charitable giving,
which is far more narrowly focused on specifically Jewish causes than that of WASP elites is focused on specifically WASP causes.
Given their small numbers, Jewish elites usually must make tactical alliances with Gentile elites; but when their ethnic interests
conflict with general elite interests (e.g., Marxist class conflicts), the former will almost always prevail. Hence, any WASP
"loyalty" to Jews as a group is foolish.
@Mefobills
this month's Executive Order Jews extracted from Trump declaring Jews to be a distinct race/nationality.
Usury is a power relation, where you steal from others because you can. Laws are changed to enable the thefts.
The people of Euro lineage, i.e., the descendants of Christendom, usually don't steal even when they easily could because they
are naturally indifferent as to materialism, their complimentary instinctive drives being 1) for adventure in overcoming challenges
while staying within the bounds of ethical self-restraint; and 2) intellectual curiosity to learn what's out there and how to
harmoniously survive and coexist with realities discovered.
"The Jewish crime rate tends to be higher than that of non-Jews and other religious groups for white-collar offenses, that
is, commercial or commercial finance.
*Also where special laws have been enacted for religious groups the crime rate among Jews tended to be even higher.
*Jews are found to be significantly over-represented in both fraudulent and genuine bankruptcies (almost ten times the rate of
non-Jews)."
@annamaria
t's not news to me that hyperethnocentric Jewish financiers help fund hyperethnocentric Jewish organizations.
Ultimately, though, that funding is a consequence of Jewish participation in the economy. So if that in itself is wrong, then
this essay is not so much a criticism of Jewish behavior, but crosses over into a criticism of Jewish existence – how are
you supposed to live if you're barred from economic participation? – which to me is a different kettle of fish altogether. As
much as I hate the term, that's something even I would call anti-semitic (note the absence of sneer quotes, which for me are practically
mandatory).
@Mr. Anon er
appetite for risk. See, sometimes I don't know that I'm not going to be repaid; it's just that I now assess the prospects
of being repaid as failing to meet some risk criterion I have. Other people's risk assessments differ from mine, which creates
a market for existing debt.
Sometimes the market highly irrationally prices financial assets – most evident (in hindsight) at market peaks and troughs
– so there are certainly some good opportunities in distressed debt. I just don't see that "vulture" funds which scan the market
looking for distressed debt are doing anything fundamentally different to any other buyers of debt.
@Hibernian
ch and Germans from NY and the middle colonies like the Rockefellers Roosevelt's. Basically they are individualized deracinated
people who are not even brothers to each other. They worship mammon – money and power. Jews are of course anything but deracinated.
They are however the world's leading usurers so the WASP with his Protestant Ethic – usury sanctified – is bawled over by them
– not just financially but psychologically. They have handed the Jews their universities, their cultural institutions. They are
a people who gave themselves up to a people for whom there is no one but themselves. The rest of us are just along for the ride
– treacherous as it is
I'd be very surprised if the last sentence of the above excerpt was true. Also it's a no brainer that US courts are more favorable
to foreigners than third world courts are.
No, but they shouldn't necessarily expect to get it. They took the risk in lending to a bad credit-risk. At least they provided
something of value – the money. Singer's fund provides nothing of value. They're just parasites.
Should they simply be forced to "lend" to people who are completely unwilling to pay what they owe – in other words, to
just give their money away?
Nobody forced them to lend anything. They did it of their own accord. They didn't have to make the loans. They could have done
something else with the money.
Elsztain and Mindlin, both Top Jews, now control Argentina.
Elsztain and Mindlin's close connections to a merging network of some of the most powerful globalists in the world today
suggest their role to be one of sniffing out the opportunities and laying the groundwork for hostile take-over of resources
and infrastructure by these elite scavengers who prey upon target nations, protected from view by the likes of Elsztain and
Mindlin, who are little more than mafia outreach agents."
@silviosilver
nterest in relations with Israel comes as a number of Central and South American countries, notably Brazil, have adopted increasingly
pro-Israel positions in line with policies of US President Donald Trump.
Guatemala opened a new embassy in Jerusalem al-Quds in occupied Palestine shortly after the US formally transferred its embassy
from Tel Aviv to the city in May 2018, which prompted worldwide condemnation and anger among Palestinians.
In August, Honduras also recognized Jerusalem al-Quds as the the so-called capital of Israel and announced that it sought to
open a diplomatic office there.
@mcohen callously
don't care about the suffering they cause, or sadistically delight in it. The more distressed mortgages they can find at a discount,
the more homes they can seize, the more non-co-ethnics they can render homeless, the happier they are. Like Gordon Gekko, and
unlike bankers who lend money for production of goods, they don't produce anything -- -they simply parasitize the lending and
borrowing of the productive economy.
If they are an asset to society, if their activities are a boon to society, let them practice those activities exclusively in
Israel and among their own coethnics elsewhere, and contravene Talmudic injunctions.
Okay, but so what? Given that there's nothing immoral – and much that is beneficial – about lending and borrowing, why should
this be any more of an issue than that west Africans genes
You don't get the difference between the Jewish white collar crime and Africans being good at sports ball?
That comparison doesnt make sense.
@silviosilver
history of Jews in Russia during the Bolshevik revolution? The kettle and fish fit right: Mr. Snger has been financing the
Holo-museums while destroying the lives of the millions in South America. Pushing the ball-point (!) written story of Anne Frank
upon American kids while immiserating hundreds of thousands of Argentian kids is morally ugly. Ugly.
As for antisemitism, the involvement of US leading zionists, and the Jewish State itself, in supporting Ukrainian banderites
(self-proclaimed neo-nazi) has buried the canard of antisemitism forever. There is no hope for the moral recovery of your Holobiz
Museums and "eternal victimhood" memes.
Actually we get the Jewish version of the history of Jews in Germany as we get the Jewish version of our own history – founding
to Trump. It is breathtaking how Jews, Semophiles and people who are intimidated by Jews and Semophiles have created how we understand
ourselves. This has been going on since Dec 7, 1941. There is almost no one left who remembers when stand up Euro Gentiles wrote
history
@annamaria
in a speech he gave at Brown in 1966, George Lincoln Rockwell addressed the role of Jews in the Russian Revolution -- you can
listen to the speech here –>
Brown link -- he covers
similar material in a 1967 speech at UCLA –>
UCLA link
.
One must take lessons from the great ruler Frederick the Great of Prussia about how to deal with Jewish scams. You see, Jewish
scams have a long history. And most of these Jewish scamsters donate a lot of money to Jewish organisations.
Well Frederick the Great came up with a novel and effective solution to all this. He just charged the official Jewish organisations
the amount in money in loss to Prussian society due to such scams. Guess What? The Jewish scams stopped. Totally stopped.
"Oy Vey" screamed the Jews, "All the money ended up in the hands of the cursed goyim and all our efforts and hard work in scamming
went to waste. "
Makes me wonder if Democracy is really a better form of government than Monarchy.
Joyce's article contends that the victims of these Jewish vulture capitalists are overwhelmingly goyim, while the ultimate
benefactors (through their charitable donations) are Jews. You never dispute, let alone refute, this contention. However, you
do contend that these vulture capitalists somehow benefit society as a whole (through some sort of economic "discipline" or whatever),
but resent the suggestion that they confine this beneficial discipline (like they confine their charitable donations) to Jews,
a suggestion you call "antisemitic".
Yeah, that is it. In college I knew a Brahmin intimately. I was struck by the contrast between her quiet classic WASP disdain
towards ordinary white conventionality and her near awe of what I thought of as Jewish vulgarity -chutzpah.
There was something ersatz Semitic in the original New England Puritanism = a sort of Jewish 1.0. Now the WASP's think the
Jews are better at their game than they are. They are right of course. The question is should anyone be playing that game.
Singer's fund provides nothing of value. They're just parasites.
We were talking about the nature of bonds. The fact bond/debt can be bought and sold does provide value – it makes it
more likely that the credit which business need to expand and to hire workers will be provided, and provided at a lower interest
rate. So the existence of the Singers of the world, troubling as it might be to you or me (in my case, given what he does with
his money), is best regarded as providing indirect value – in the sense that they make our credit system possible.
@silviosilver
thin air, then loaned out at interest and/or against real assets as collateral, and/or perhaps traded by 'vultures' -- or
the part of the "credit system" that burdens millions of young adults with debt in the form of student loans, which ultimately
is also money created out of nothing and loaned to them.
Within a few years, interest on the national debt will be the second largest federal expenditure, i.e. even greater than defense
spending -- always left unexplained is why the US, a sovereign entity with the authority to issue currency, has to borrow money
to run a deficit.
Fractional reserve banking (unstable and exploitative) and assignment of debt to assignees/purchasers (provided the borrower
has agreed to a covenant allowing this) are two separate issues. It is possible to have either one without the other. The idea
that you're released from your debt if your lender dies or moves to a far off city or gets worn out trying to collect or whatever
is a notion worthy of a junior high school juvenile delinquent. Also if national sovereignty means the right to welsh on debts,
then no one in his right mind will lend to a sovereign nation and then they cannot get credit.
(of course this will have consequences too; living beyond one's means indefinitely always does eventually).
Student loan debt is massively detrimental to affordable family formation -- I also see it as immoral to burden
young people in this way.
Multi-generational national indebtedness is profoundly immoral -- it's a disgrace that there is little to no recognition
of this, or outrage about what is going on.
@eah edit
system" that burdens millions of young adults with debt in the form of student loans, which ultimately is also money created
out of nothing and loaned to them.
That's much more a consequence of the prevailing American attitude towards higher education – that individuals should pay for
it rather than the state – than it is the monetary system.
If fractional reserve banking is nothing more than "creating money out of nothing," then don't you ever ask yourself how it
is that a bank could find itself in financial trouble? Why doesn't it just create some more money out of thin air and put itself
back in the black?
@eah ts, although
for individuals some are protected, or a repayment plan (for individuals) or a reorganization plan (for corporations.) It requires
the payment of often large legal fees. It's not equivalent to walking away (although sometimes it looks like close to the same
thing) or having the debt forgiven based on political pressure, and it doesn't have anything to do with whether any of the creditors
are assignees who bought the paper, or not.
Printing press finance just means that government, instead of private interests, defrauds the people. Edison was a great inventor
but hardly a sophisticated economic and /or political thinker.
@eah out better
than others. If paying $0.10 on the dollar automatically made you rich, the world would have a lot more billionaires than it does
now. The rate would quickly be bid up to $0.95 on the dollar in no time flat. Also, legal fees and other collection costs (towing
away or storing ships, etc.) need to be taken into account.
I suspect that Mr. Singer may use his political influence to get the US, and likely some other governments, to aid in the collections.
That is an issue in itself. That is where the ethical issue lies. As another poster mentioned, the way he uses his money (his
idea of the good of society) is also an issue.
The answer to your last sentence is that the government places limits through reserve requirements. If this were not so a run
on the bank could end the charade. Sometimes these runs still happen and the FDIC steps in. Unlike the government, the bank has
to redeem its paper (checks and passbooks) on demand. The government has not done this for private parties since 1933, or for
foreign governments since 1971. It can and does tell you to just continue circulating the paper, which creditors are required
to accept, no matter how watered down it is.
@Hibernian
it has full authority to do, instead of selling debt , taxpayers, including future generations of taxpayers, are nor
burdened with interest payments, nor with repayment of principal .
Edison was a great inventor but hardly a sophisticated economic and /or political thinker.
Sure bud, whatever you say -- the essential question here is, was he correct in his statement re debt issuance and who benefits
from it, also its disadvantages, vs dollar issuance? -- the answer is yes, he clearly was: it makes no sense for a government
to sell debt when it can just spend money .
@silviosilver
uch more a consequence of the prevailing American attitude towards higher education – that individuals should pay for it rather
than the state – than it is the monetary system.
Sure, right -- BOOM!, suddenly the "the prevailing American attitude towards higher education", also young people, just
changed, and within a generation or so, it was decided to exploit the hell out of them and burden them with huge amounts of
debt .
"LOL" -- you are naive.
Regardless of the etiology, student debt is immoral and something must be done about it.
Bankruptcy law, like other laws, limits the discretion of judges. Sure, in practice, this is aspirational. As is the notion
that some judges deviations from the law are motivated by fairness.
"LOL" -- yeah, "what's the difference?" -- at least in the case of a government spending money into existence, which it
has full authority to do, instead of selling debt, taxpayers, including future generations of taxpayers, are nor burdened with
interest payments, nor with repayment of principal.
A super iconoclast vis a vis businessmen, especially if they're Jewish, but a true believer that Government is the same
thing as The People, or at least represents them perfectly or almost perfectly.
it makes no sense for a government to sell debt when it can just spend money.
And it makes no sense to work, save, be frugal, borrow only as necessary, and pay back what you borrow, when you can write
bad checks oh wait Government is Divinely Anointed! It is of the People, by the People, and for the People!
Which one of us is being obtuse? I'll leave it as an exercise for the student.
So, can anyone tell my why Jewish people would want to fund homosexual causes? What benefit does it give them? I'm just beginning
to understand the mass migration thing, but still neither of these seem explicitly Jewish. Doesn't the Torah ban homosexuality?
Just wondering
Carnegie was born in 1836 in Dunfermline, Fife. His father was a handloom weaver and an active Chartist who marched for the
rights of the working man. So when Andrew went to sleep every night knowing he had starved, beaten and killed his factory workers,
he spent his $$$$ trying to assuage his conscience.
Andrew is not a hero, hero's don't kill their employees by starvation and shooting!
Despicable man, trying to pave his way to Heaven.
Similar to Mr. Bloomberg who states that his path to heaven is assured by his good works.
Carnegie was born in 1836 in Dunfermline, Fife. His father was a handloom weaver and an active Chartist who marched for the
rights of the working man. So when Andrew went to sleep every night knowing he had starved, beaten and killed his factory workers,
he spent his $$$$ trying to assuage his conscience.
Andrew is not a hero, hero's don't kill their employees by starvation and shooting!
Despicable man, trying to pave his way to Heaven.
Similar to Mr. Bloomberg who states that his path to heaven is assured by his good works.
This was the Frankfurt School's great insight. The best way to undermine a sense of nationalism is to divide the people through
the promotion of identity politics, including LGBTQ.
Some of what Paul Singer does with his money: create front organizations to recruit Christians in the effort to make the Middle
East safe for Israel, and the world safe for Jews:
This guy is competing for world's top butt goy. Unfortunately there is a lot of competition. The author, Robert Nicholson,
is President of Philos Project, a pro-Zionist "Christian" organization that is funded by Paul Singer.
The above tweet refers to this piece in the NY Post by Robert Nicholson, director of the 'Philos Project':
An interesting blog post from a few years ago (2015) re the sudden appearance of the 'Philos Project' -- even today it is difficult
to find info (eg financial) on this organization:
The article bounces back and forth between two completely different fields: private equity
and distressed debt funds. The latter is completely defensible. A lot of bondholders,
probably the majority, cannot hold distressed or defaulted debt. Insurance companies often
can't by law. Bond mutual funds set out in their prospectuses they don't invest in anything
rated lower than A, AA, or whatever. Even those allowed to hold distressed debt don't want
the extra costs involved with doing so, such as carefully following bankruptcy proceedings
and dealing with delayed and irregular payments.
The author is not a finance expert but he correctly spotlights flaws of so-called 'predatory
capitalism' which is disproportionately Jewish.
Private equity is rife with vices like asset-stripping and looting e.g Eddie Lampert
('Jewishness' member) plus El Trumpo appointee Steven Mnuchin at Sears.
Vulture funds often load all sorts of costs, even frivolous ones, and extra interest charges
on the original debt to maximize profit.
Some countries have the Duplum rule which limits the amount you are liable to a creditor
when you default on a debt.
@Robjil
ssociates, was overwhelmingly effective. Before a crucial shareholder vote on the Lee's
planned merger, Samsung Securities CEO Yoon Yong-am said:
"We should score a victory by a big margin in the first battle, in order to take the
upper hand in a looming war against Elliott, and keep other speculative hedge funds from
taking short-term gains in the domestic market."
When the vote finally took place a few days ago, a conclusive 69.5% of Samsung
shareholders voted in favor of the Lee proposal, leaving Elliott licking its wounds and
complaining about the "patriotic marketing" of those behind the merger.
@J
Adelman perpetual victim .everyone hates me without a reason. My sin is greater than I
can bear (Cain) everyone who comes across me will kill me. I spend my time wandering the
earth (boo ho). And despite slaying your brother you are accorded divine protection.
Jesus said (paraphrasing here) that if the unclean spirit is cast out of a man and is not
replaced with something wholesome he takes "seven other spirits" into himself and becomes
totally insane. You did this to yourself and you will realize that your problem is no longer
with man but with God himself. Jacob the deceiver has wrestled all his life against his
fellow man and triumphed but now he will confront God himself. Get ready to meet your Maker
and see how far your excuses will get you with the Almighty.
@J
Adelman nder. Jewish business behavior has a retarding effect on societies. It's
prominent, large, rapacious and extremely selfish.
As long as Jews made their money then fuck everybody else.
Yes, it's unfair when innocent Jews suffer. When the actions of other members of it's DNA
choose schemes and dishonorable ways to make money it's going to happen.
Stop acting like innocent victims all the time. This narcissistic stance might explain why
Jews are hated seemingly everywhere. Relationships with narcissists are no fun and the means
necessary to break free are often hurtful and unfortunate for everyone involved.
Jews see themselves as the ingroup, and the "goyim" as the outgroup. Since Whites are the
"outgroup" it's not just acceptable, but praiseworthy, to exploit them. To "beat" them at
war.
The problem is that Whites wrongly do not see Jews as an outgroup – something that
Jews themselves take great pains to discourage via their various front groups like the
ADL.
There is no "technical" fix, there is no objective "system" that can change this dynamic.
There is no "level playing field."
Whites need to ostracize Jews at all levels. Boycott, Divest and Sanction – not just
their apartheid regime of Jew bigotry in Zionist-occupied Palestine, but at every level of
society, business, civil institutions, etc.
Jews are destroying the world. Everywhere they go, they leave behind nations in ruins.
Look at Europe, Africa and the Americas, Jews have left their ugly footprints. Corruption,
prostitution, drugs and human trafficking are their trade.
@Just
passing through obs time and time again throughout their history, to the point bishops
and priests would harbor Jews in the cathedrals and lock the doors before the peasants could
arrest them.
Indeed, the infighting among Whites promoted by the likes of Jones is yet again another
assist from Catholic powers to their partners, the Jews.
The popular "neo-reactionary/NRx" movement, started by the Ashkenazi Curtis Yarvin, is yet
another "right-wing" fad that blames Calvinists for all the problems in the world.
Jews are blameless, yet again another White ethnicity/religion is at fault.
No wonder Jews get away with what they do. Whites are too busy infighting over false
history demonizing various rival cults.
So, the "vultures" flew out to the West after devouring the Russian empire and now with
the help of the likes of the homeboy or more like a two bit whore, Ben Sasse, they've
descended on America and have started gutting it out.
Where will they fly next? White Christians don't want them and black/brown Muslims can't
stand them but perhaps China is their next destination being that they have shipped most of
the jobs out there and the whole lot of them are marrying "Chinese-American" women in droves
for good measure.
In the coming battle of the titans, the one who's name can't be pronounced, viz. Yahweh,
hopefully has better guns than Jehovah and Allah, for it sure is gonna need it when the
latter two gang up on it maybe Buddha will give it a helping hand being that they're
practically in-laws now!
@Father
O'Hara ians and Chinese (South Asians) are the richest in both countries (except for Jews
of course).
What I have found is that these two groups come from a debt-averse culture, their kids
actually live with their parents until they have saved enough money for a house and other
such things required to start a family.
Whites meanwhile are WAY to trusting of these faceless financial institutions, they get
into debt very easily and thus become slaves, if you have kids, the first thing you should
educate them about is finance and debt, don't throw them out to the dogs either, it's tragic
to see some getting into debt and then having other problems like drugs and alcohol
addictions.
Wow what a confused mess. Here's a summary: Vulture capitalism is bad for no particular
reason but only an evil anti-Semite (like you) would dare criticize capitalism.
I think the term "vulture capitalism" is calumnious to vultures, who, as carrion birds,
perform a useful and purifying function in nature.
The Jews as a collective, i.e., the Jews who identify as such, concur in the death
sentence of Christ handed down by their Sanhedrin and espouse the Talmudic mitzvah of killing
the best of the gentiles (which naturally implies elevating the worst of the gentiles to
power and prominence) are more to be likened to plague bearing rodents. Unlike vultures, rats
feast on corruption and putrescence, spread disease and also kill the living.
We embrace the finance capitalist worldview at our peril. In its essence, it is nothing
but the worship of money making and profiteering as the supreme aspiration of life,
irregardless of its horrible effects on our compatriots and fellow humans. In doing so, we
become Jews at heart.
There is nothing wrong with industry and the profit motive per se. Predatory finance
contributes nothing to the well being of a nation and the needs of the physical economy- it
is supremely toxic and corrosive of both. It must be expunged and its champions expropriated
and exiled. People like the odious Peter Singer have no place in a moral world; they ought to
be first expropriated, then exiled as far away from their host societies as possible.
I was personally wounded by the anti gay rhetoric peppered across this article. I can't
help making the association that Paul singer's son came out as gay and that this must be the
source of the author's animus against him and the others. Shakespeare, who was also
homosexual, described this state of mind as "a green eyed monster," i.e. jealousy. I'm
mortified that other members of the commentariat have not taken issue with this. Maybe we
would be more compassionate to the denizens of middle America if they allowed our most basic
civil rights.
Oh those kind jews have always been for the working class? But there is a white working
class and jews want them extinct from the face of the earth. Read 'Abolishing whiteness has
never been more urgent.' By Mark Levine
@silviosilver
ors to default was CAUSED BY the big Wall Street firms' irresponsible behavior.
Also, most people do tend to temper economic contracts with a degree of compassion.
Gentile capitalism does not exist in a vacuum.
I recall reading about a young female environmentalist who was refusing to leave a
venerable redwood tree that was scheduled to be cut down. The WASP businessman who owned the
tree was extremely patient with the girl, tried to win her over, threw her food and drinks,
and so on. The land with the tree was then sold to some Jewish firm. At that point the
article left off. The tree was cut down with no further negotiation.
The greatest jewish vulture fund is the zionist privately owned feral reserve aka the FED
, is creates money out of thin air and feeds this money to the otherwise bankrupt zionist
banks and not just here in the ZUS but in Europe, and the BIS is the vulture fund of vulture
funds owned by the zionists, the biggest scam in the history of the world.
By the way, Tucker Carlson said that 911 truthers were nuts, that says it all about
him.
@Colin
Wright usual with Joyce (and not only Joyce of course). You take something that is human,
talk of Jews, point to that something in Jews, and pretend, trusting that your readers will
pretend the same, that it's a Jewish-specific something.
Because if you were to say: everyone does this, everywhere, but when Jews do it it's just on
a larger scale, then you'd be shining light on the fact that what changes with Jews is just
skills, and that they are intelligent enough to co-operate more than the others.
Like when Mac Donald speaks of Jewish self-deception.
I feel I am swimming in self-deception everytime I talk with people (more so with women), and
they aren't Jewish. Do people do anything, but self-deceive?
So?
Jews are doing to White countries what Whites and Jews did to India, no honour amongst
thieves, the ones with the higher verbal IQ wins.
Also it is important to note that the reason India came under the sway of Anglo-Zionist
banking cartels so easily was because how divided it was, I reckon that is why they are
promoting mass immigration. Import lots of different groups, then run lots of race-baiting
stories to distract the plebs from their financial machinations.
This is why Jews are well represented in non-antisemitic White Nationalist organisations
like Jared Taylor's AmRen, they are great at playing both sides.
And he funded the building of the Peace Palace ("Vredespaleis") in The Hague, presently
the seat of the International Court of Justice, an institution not held in high esteem in
the home country of the generous donor.
@Wally
't really engage in lofty ambitons to dominate the world and as such are intact at the moment
and seem like they will remain that way for a long time, they are the true conservatives,
WASPs have always had a Jewish streak within their corrupt souls and are now paying the price
for engaging with a criminal race.
Why do you think Epstein has all these Gentiles in his pocket? You think do-gooding
gentiles just randomly decided to get into bed with Epstein and Co.? How many East Asians and
Eastern Euros do you see terrified of being outed as paedophiles.
Don't deceive yourselves, all debts are paid in the end, especially when the creditors are
Jews.
" it is truly remarkable that vulture funds like Singer's escaped major media attention
prior to this ."
Not really. The Jew's grip is starting to slip now, though. More and more people are
becoming aware that they are virulent parasites and always have been.
@Mulegino1
l capitalism is the competition of ideas, innovation, efficient manufacturing and quality
products made and produced by honest companies. That competition can, in theory at least,
make people (and companies) "try harder". But only when a company's success is determined by
the strength of its products, not by the "deals" it cuts with Jewish financial, advertising,
"marketing" and swindling rackets, designed to line the pockets of the Jew while destroying
honest competition by Gentiles who struggle to play fair and innovate.
Jewish vulture "capitalism" contributes NOTHING of value to any company or any culture. It
never has and never will.
@Colin
Wright sity, and over 2500 Free Libraries from coast to coast, in a time when very little
was done to help what we now call the "underprivileged".
In fact, he gave away 90% of his massive fortune–about $75 Billion in current
dollars. Funding, in the process, many charities, hospitals, museums, foundations and
institutions of learning. He was a major benefactor of negro education.
He was a staunch anti-imperialist who believed America should concentrate its energies on
peaceful endeavors rather than conquering and subduing far-off lands.
Although they are even more keen to put their names on things, today's robber barons leave
behind mainly wreckage.
@anon
who were true conservatives in that all they wished was prosperity for their people in their
own lands without any aggressive foreign policy moves.
Basically, WASPs thought that they could win in the end, but they were out Jew'd and now
they are crying.
The one difference you will notice is that certain subsections of WASPs, notable the
British, actually did build infrastructure in the countries they looted, this to me was borne
out of a sense of guilt, so to be fair, WASPs were not as parasitic and ruthless as Jews.
But in the end, the more ruthless wins. To quote the Joker
Andrew Carnegie left behind institutions like Carnegie Hall, Carnegie-Mellon University,
and over 2500 Free Libraries from coast to coast, in a time when very little was done to
help what we now call the "underprivileged".
And he funded the building of the Peace Palace ("Vredespaleis") in The Hague, presently
the seat of the International Court of Justice, an institution not held in high esteem in the
home country of the generous donor.
"If man will strike, strike through the mask!"
Ahab, Moby Dick
It was very gratifying to see Tucker Carlson's
recent attack on the activities of Paul Singer's vulture fund, Elliot Associates, a group I
first
profiled four years ago. In many respects, it is truly remarkable that vulture funds like
Singer's escaped major media attention prior to this, especially when one considers how
extraordinarily harmful and exploitative they are. Many countries are now in very significant
debt to groups like Elliot Associates and, as Tucker's segment very starkly illustrated, their
reach has now extended into the very heart of small-town America. Shining a spotlight on the
spread of this virus is definitely welcome. I strongly believe, however, that the problem
presented by these cabals of exploitative financiers will only be solved if their true nature is
fully discerned. Thus far, the descriptive terminology employed in discussing their activities
has revolved only around the scavenging and parasitic nature of their activities. Elliot
Associates have therefore been described as a quintessential example of a "vulture fund"
practicing "vulture capitalism." But these funds aren't run by carrion birds. They are operated
almost exclusively by Jews. In the following essay, I want us to examine the largest and most
influential "vulture funds," to assess their leadership, ethos, financial practices, and how they
disseminate their dubiously acquired wealth. I want us to set aside colorful metaphors. I want us
to strike through the mask.
It is commonly agreed that the most significant global vulture funds are Elliot Management,
Cerberus, FG Hemisphere, Autonomy Capital, Baupost Group, Canyon Capital Advisors, Monarch
Alternative Capital, GoldenTree Asset Management, Aurelius Capital Management, OakTree Capital,
Fundamental Advisors, and Tilden Park Investment Master Fund LP. The names of these groups are
very interesting, being either blankly nondescript or evoking vague inklings of Anglo-Saxon or
rural/pastoral origins (note the prevalence of oak, trees, parks, canyons, monarchs, or the use
of names like Aurelius and Elliot). This is the same tactic employed by the Jew Jordan Belfort,
the "Wolf of Wall Street," who operated multiple major frauds under the business name Stratton
Oakmont.
These names are masks. They are designed to cultivate trust and obscure the real background of
the various groupings of financiers. None of these groups have Anglo-Saxon or venerable origins.
None are based in rural idylls. All of the vulture funds named above were founded by, and
continue to be operated by, ethnocentric, globalist, urban-dwelling Jews. A quick review of each
of their websites reveals their founders and central figures to be:
Elliot Management -- Paul
Singer, Zion Shohet, Jesse Cohn, Stephen Taub, Elliot Greenberg and Richard Zabel Cerberus --
Stephen Feinberg, Lee Millstein, Jeffrey Lomasky, Seth Plattus, Joshua Weintraub, Daniel Wolf,
David Teitelbaum FG Hemisphere -- Peter Grossman Autonomy Capital -- Derek Goodman Baupost Group
-- Seth Klarman, Jordan Baruch, Isaac Auerbach Canyon Capital Advisors -- Joshua Friedman,
Mitchell Julis Monarch Alternative Capital -- Andrew Herenstein, Michael Weinstock GoldenTree
Asset Management -- Steven Tananbaum, Steven Shapiro Aurelius Capital Management -- Mark Brodsky,
Samuel Rubin, Eleazer Klein, Jason Kaplan OakTree Capital -- Howard Marks, Bruce Karsh, Jay
Wintrob, John Frank, Sheldon Stone Fundamental Advisors -- Laurence Gottlieb, Jonathan Stern
Tilden Park Investment Master Fund LP -- Josh Birnbaum, Sam Alcoff
The fact that all of these vulture funds, widely acknowledged as the most influential and
predatory, are owned and operated by Jews is remarkable in itself, especially in a contemporary
context in which we are constantly bombarded with the suggestion that Jews don't have a special
relationship with money or usury, and that any such idea is an example of ignorant prejudice.
Equally remarkable, however, is the fact that Jewish representation saturates the board level of
these companies also, suggesting that their beginnings and methods of internal promotion and
operation rely heavily on ethnic-communal origins, and religious and social cohesion more
generally. As such, these Jewish funds provide an excellent opportunity to examine their
financial and political activities as expressions of Jewishness, and can thus be placed in the
broader framework of the Jewish group evolutionary strategy and the long historical trajectory of
Jewish-European relations.
How They Feed
In May 2018, Puerto Rico declared a form of municipal bankruptcy after falling into more than
$74.8
billion in debt, of which more than $34 billion is interest and fees. The debt was owed to
all
of the Jewish capitalists named above, with the exception of Stephen Feinberg's Cerberus
group. In order to commence payments, the government had instituted a policy of fiscal austerity,
closing schools and raising utility bills, but when Hurricane Maria hit the island in September
2017, Puerto Rico was forced to stop transfers to their Jewish creditors. This provoked an
aggressive attempt by the Jewish funds to seize assets from an island suffering from an 80% power
outage, with the addition of further interest and fees. Protests broke out in several US cities
calling for the debt to be forgiven. After a quick stop in Puerto Rico in late 2018, Donald Trump
pandered to this sentiment when he told Fox News, "They owe a lot of money to your friends on
Wall Street, and we're going to have to wipe that out." But Trump's statement, like all of
Trump's statements, had no substance. The following day, the director of the White House budget
office, Mick Mulvaney, told reporters: "I think what you heard the president say is that Puerto
Rico is going to have to figure out a way to solve its debt problem." In other words, Puerto Rico
is going to have to figure out a way to pay its Jews.
Trump's reversal is hardly surprising, given that the President is considered extremely
friendly to Jewish financial power. When he referred to "your friends on Wall Street" he really
meant his friends on Wall Street. One of his closest allies is Stephen Feinberg, founder
and CEO of Cerberus, a war-profiteering vulture fund that has now accumulated
more than $1.5 billion in Irish debt , leaving the country prone to a "
wave of home repossessions " on a scale not seen since the Jewish mortgage traders behind
Quicken Loans (Daniel Gilbert) and Ameriquest (Roland Arnall)
made thousands of Americans homeless . Feinberg has also been associated with mass evictions
in Spain, causing a collective of Barcelona anarchists to
label him a "Jewish mega parasite" in charge of the "world's vilest vulture fund." In May
2018, Trump made Feinberg
chair of his Intelligence Advisory Board , and one of the reasons for Trump's sluggish
retreat from Afghanistan has been the fact Feinberg's DynCorp has enjoyed years of lucrative government
defense contracts training Afghan police and providing ancillary services to the military.
But Trump's association with Jewish vultures goes far beyond Feinberg. A recent piece
in the New York Post declared "Orthodox Jews are opening up their wallets for Trump in
2020." This is a predictable outcome of the period 2016 to 2020, an era that could be neatly
characterised as How Jews learned to stop worrying and love the Don. Jewish financiers are
opening their wallets for Trump because it is now clear he utterly failed to fulfil promises on
mass immigration to White America, while pledging his commitment to Zionism and to socially
destructive Jewish side projects like the promotion of homosexuality. These actions, coupled with
his commuting
of Hasidic meatpacking boss Sholom Rubashkin 's 27-year-sentence for bank fraud and money
laundering in 2017, have sent a message to Jewish finance that Trump is someone they can do
business with. Since these globalist exploiters are essentially politically amorphous, knowing no
loyalty but that to their own tribe and its interests, there is significant drift of Jewish
mega-money between the Democratic and Republican parties. The New York Post reports, for
example, that when Trump attended a $25,000-per-couple luncheon in November at a Midtown hotel,
where 400 moneyed Jews raised at least $4 million for the America First [!] SuperPAC, the
luncheon organiser Kelly Sadler, told reporters, "We screened all of the people in attendance,
and we were surprised to see how many have given before to Democrats, but never a Republican.
People were standing up on their chairs chanting eight more years." The reality, of course, is
that these people are not Democrats or Republicans, but Jews, willing to push their money in
whatever direction the wind of Jewish interests is blowing.
The collapse of Puerto Rico under Jewish debt and elite courting of Jewish financial predators
is certainly nothing new. Congo , Zambia , Liberia ,
Argentina , Peru ,
Panama , Ecuador ,
Vietnam , Poland , and
Ireland are just some of the countries that have slipped fatefully into the hands of the Jews
listed above, and these same people are now closely watching
Greece and
India . The methodology used to acquire such leverage is as simple as it is ruthless. On its
most basic level, "vulture capitalism" is really just a combination of the
continued intense relationship between Jews and usury and Jewish involvement in medieval tax
farming. On the older practice, Salo Baron writes in Economic History of the Jews that
Jewish speculators would pay a lump sum to the treasury before mercilessly turning on the
peasantry to obtain "considerable surpluses if need be, by ruthless methods." [1]
The activities of the Jewish vulture funds are essentially the same speculation in debt, except
here the trade in usury is carried out on a global scale with the feudal peasants of old now
replaced with entire nations. Wealthy Jews pool resources, purchase debts, add astronomical fees
and interests, and when the inevitable default occurs they engage in aggressive legal activity to
seize assets, bringing waves of jobs losses and home repossessions.
This type of predation is so pernicious and morally perverse that both the
Belgian and
UK governments have taken steps to ban these Jewish firms from using their court systems to
sue for distressed debt owed by poor nations. Tucker Carlson, commenting on Paul Singer's
predation and the ruin of the town of Sidney, Nebraska, has said:
It couldn't be uglier or more destructive. So why is it still allowed in the United States?
The short answer: Because people like Paul Singer have tremendous influence over our political
process. Singer himself was the second largest donor to the Republican Party in 2016. He's
given millions to a super-PAC that supports Republican senators. You may never have heard of
Paul Singer -- which tells you a lot in itself -- but in Washington, he's rock-star famous. And
that is why he is almost certainly paying a lower effective tax rate than your average fireman,
just in case you were still wondering if our system is rigged. Oh yeah, it is.
Aside from direct political donations, these Jewish financiers also escape scrutiny by hiding
behind a mask of simplistic anti-socialist rhetoric that is common in the American Right,
especially the older, Christian, and pro-Zionist demographic. Rod Dreher, in a commentary on
Carlson's
piece at the American Conservative , points out that Singer gave a speech in May 2019
attacking the "rising threat of socialism within the Democratic Party." Singer continued, "They
call it socialism, but it is more accurately described as left-wing statism lubricated by showers
of free stuff promised by politicians who believe that money comes from a printing press rather
than the productive efforts of businesspeople and workers." Dreher comments: "The productive
efforts of businesspeople and workers"? The gall of that man, after what he did to the people of
Sidney."
What Singer and the other Jewish vultures engage in is not productive, and isn't even any
recognisable form of work or business. It is greed-motivated parasitism carried out on a
perversely extravagant and highly nepotistic scale. In truth, it is Singer and his co-ethnics who
believe that money can be printed on the backs of productive workers, and who ultimately believe
they have a right to be "showered by free stuff promised by politicians." Singer places himself
in an infantile paradigm meant to entertain the goyim, that of Free Enterprise vs Socialism, but,
as Carlson points out, "this is not the free enterprise that we all learned about." That's
because it's Jewish enterprise -- exploitative, inorganic, and attached to socio-political goals
that have nothing to do with individual freedom and private property. This might not be the free
enterprise Carlson learned about, but it's clearly the free enterprise Jews learn about -- as
illustrated in their extraordinary
over-representation in all forms of financial exploitation and white collar crime. The
Talmud, whether actively studied or culturally absorbed, is their code of ethics and their
curriculum in regards to fraud, fraudulent bankruptcy, embezzlement, usury, and financial
exploitation. Vulture capitalism is Jewish capitalism.
Whom They Feed
Singer's duplicity is a perfect example of the way in which Jewish finance postures as
conservative while conserving nothing. Indeed, Jewish capitalism may be regarded as the root
cause of the rise of Conservative Inc., a form or shadow of right wing politics reduced solely to
fiscal concerns that are ultimately, in themselves, harmful to the interests of the majority of
those who stupidly support them. The spirit of Jewish capitalism, ultimately, can be discerned
not in insincere bleating about socialism and business, intended merely to entertain
semi-educated Zio-patriots, but in the manner in which the Jewish vulture funds disseminate the
proceeds of their parasitism. Real vultures are weak, so will gorge at a carcass and regurgitate
food to feed their young. So then, who sits in the nests of the vulture funds, awaiting the
regurgitated remains of troubled nations?
Boston-based Seth Klarman (net worth $1.5 billion), who like Paul Singer has
declared "free enterprise has been good for me," is a rapacious debt exploiter who was
integral to the financial collapse of Puerto Rico, where he hid much of activities behind a
series of shell companies. Investigative journalists eventually discovered that Klarman's Baupost
group was behind much of the aggressive legal action intended to squeeze the decimated island for
bond payments. It's clear that the Jews involved in these companies are very much aware that what
they are doing is wrong, and they are careful to avoid too much reputational damage, whether to
themselves individually or to their ethnic group. Puerto Rican journalists, investigating the
debt trail to Klarman, recall trying to follow one of the shell companies (Decagon) to Baupost
via a shell company lawyer (and yet another Jew) named Jeffrey Katz:
Returning to the Ropes & Gray thread, we identified several attorneys who had worked
with the Baupost Group, and one, Jeffrey Katz, who -- in addition to having worked directly
with Baupost -- seemed to describe a particularly close and longstanding relationship with a
firm fitting Baupost's profile on his experience page. I called
Katz and he picked up, to my surprise. I identified myself, as well as my affiliation with the
Public Accountability Initiative, and asked if he was the right person to talk to about Decagon
Holdings and Baupost. He paused, started to respond, and then evidently thought better of it
and said that he was actually in a meeting, and that I would need to call back (apparently,
this high-powered lawyer picks up calls from strange numbers when he is in important meetings).
As he was telling me to call back, I asked him again if he was the right person to talk to
about Decagon, and that I wouldn't call back if he wasn't, and he seemed to get even more
flustered. At that point he started talking too much, about how he was a lawyer and has
clients, how I must think I'm onto some kind of big scoop, and how there was a person standing
right in front of him -- literally, standing right in front of him -- while I rudely insisted
on keeping him on the line.
One of the reasons for such secrecy is the intensive Jewish philanthropy engaged in by Klarman
under his Klarman Family
Foundation . While Puerto Rican schools are being closed, and pensions and health provisions
slashed, Klarman is regurgitating the proceeds of massive debt speculation to his " areas of focus "
which prominently includes " Supporting the global Jewish community and
Israel ." While plundering the treasuries of the crippled nations of the goyim, Klarman and
his co-ethnic associates have committed themselves to "improving the quality of life and access
to opportunities for all Israeli citizens so that they may benefit from the country's
prosperity." Among those in Klarman's nest, their beaks agape for Puerto Rican debt interest, are
the American Jewish Committee, Boston's Combined Jewish Philanthropies, the Holocaust Memorial
Museum, the Honeymoon Israel Foundation, Israel-America Academic Exchange, and the Israel
Project. Klarman, like Singer, has also been an enthusiastic proponent of liberalising attitudes
to homosexuality, donating $1 million to a Republican super PAC aimed at supporting pro-gay
marriage GOP candidates in 2014 (Singer donated $1.75 million). Klarman, who also contributes to candidates who support
immigration reform, including a path to citizenship for undocumented immigrants, has said "The
right to gay marriage is the largest remaining civil rights issue of our time. I work one-on-one
with individual Republicans to try to get them to realize they are being Neanderthals on this
issue."
Steven Tananbaum's GoldenTree Asset Management has also fed well on Puerto Rico, owning $2.5
billion of the island's debt. The Centre for Economic and Policy Research has commented
:
Steven Tananbaum, GoldenTree's chief investment officer, told a business conference in
September (after Hurricane Irma, but before Hurricane Maria) that he continued to view Puerto
Rican bonds as an attractive investment. GoldenTree is spearheading a group of COFINA
bondholders that collectively holds about $3.3 billion in bonds. But with Puerto Rico facing an
unprecedented humanitarian crisis, and lacking enough funds to even begin to pay back its
massive debt load, these vulture funds are relying on their ability to convince politicians and
the courts to make them whole. The COFINA bondholder group has spent
$610,000 to lobby Congress over the last two years, while GoldenTree itself
made $64,000 in political contributions to federal candidates in the 2016 cycle. For
vulture funds like GoldenTree, the destruction of Puerto Rico is yet another opportunity for
exorbitant profits.
Whom does Tananbaum feed with these profits? A brief glance at the spending of the
Lisa and Steven Tananbaum Charitable Trust reveals a relatively short list of beneficiaries
including United Jewish Appeal Foundation, American Friends of Israel Museum, Jewish Community
Center, to be among the most generously funded, with sizeable donations also going to museums
specialising in the display of degenerate and demoralising art.
Following the collapse in Irish asset values in 2008, Jewish vulture funds including OakTree
Capital swooped on mortgagee debt to seize tens of thousands of Irish homes, shopping malls, and
utilities (Steve Feinberg's Cerberus took control of public waste disposal). In 2011, Ireland
emerged as a hotspot for distressed property assets, after its bad banks began selling loans that
had once been held by struggling financial institutions. These loans were quickly purchased at
knockdown prices by Jewish fund managers, who then aggressively sought the eviction of residents
in order to sell them for a fast profit. Michael Byrne, a researcher at the School of Social
Policy at University College Dublin, Ireland's largest university, comments : "The aggressive
strategies used by vulture funds lead to human tragedies." One homeowner, Anna Flynn recalls how
her mortgage fell into the hands of Mars Capital, an affiliate of Oaktree Capital, owned and
operated by the Los Angeles-based Jews Howard Marks and Bruce Karsh. They were "very, very
difficult to deal with," said Flynn, a mother of four. "All [Mars] wanted was for me to leave the
house; they didn't want a solution [to ensure I could retain my home]."
When Bruce Karsh isn't making Irish people homeless, whom does he feed with his profits? A
brief glance at the spending of the
Karsh Family Foundation reveals millions of dollars of donations to the Jewish Federation,
Jewish Community Center, and the United Jewish Fund.
Paul Singer, his son Gordin, and their Elliot Associates colleagues Zion Shohet, Jesse Cohn,
Stephen Taub, Elliot Greenberg and Richard Zabel, have a foothold in almost every country, and
have a stake in every company you're likely to be familiar with, from book stores to dollar
stores. With the profits of exploitation, they
fund campaigns for homosexuality and mass migration , boost Zionist politics,
invest millions in security for Jews , and promote wars for Israel. Singer is a Republican,
and is on the Board of the Republican Jewish Coalition. He is a former board member of the Jewish
Institute for National Security Affairs, has funded neoconservative research groups like the
Middle East Media Research Institute and the Center for Security Policy, and is among the largest
funders of the neoconservative Foundation for Defense of Democracies. He was also connected to
the pro-Iraq War advocacy group Freedom's Watch. Another key Singer project was the Foreign
Policy Initiative (FPI), a Washington D.C.-based advocacy group that was founded in 2009 by
several high-profile Jewish neoconservative figures to promote militaristic U.S. policies in the
Middle East on behalf of Israel and which received its seed money from Singer.
Although Singer was initially anti-Trump, and although Trump once
attacked Singer for his pro-immigration politics ("Paul Singer represents amnesty and he
represents illegal immigration pouring into the country"), Trump is now essentially funded by
three Jews -- Singer, Bernard Marcus, and Sheldon Adelson, together accounting for over $250
million in pro-Trump political money . In return, they want war with Iran. Employees of
Elliott Management were one of the main sources of funding for the 2014 candidacy of the Senate's
most outspoken Iran hawk, Sen. Tom Cotton (R-AR), who urged Trump to conduct a "retaliatory
strike" against Iran for purportedly attacking two commercial tankers. These exploitative Jewish
financiers have been clear that they expect a war with Iran, and they are lobbying hard and
preparing to call in their pound of flesh. As one political commentator put it, "These donors
have made their policy preferences on Iran plainly known. They surely expect a return on their
investment in Trump's GOP."
The same pattern is witnessed again and again, illustrating the stark reality that the
prosperity and influence of Zionist globalism rests to an overwhelming degree on the predations
of the most successful and ruthless Jewish financial parasites. This is not conjecture,
exaggeration, or hyperbole. This is simply a matter of striking through the mask, looking at the
heads of the world's most predatory financial funds, and following the direction of regurgitated
profits.
Make no mistake, these cabals are everywhere and growing. They could be ignored when they
preyed on distant small nations, but their intention was always to come for you too. They are now
on your doorstep. The working people of Sidney, Nebraska probably had no idea what a vulture fund
was until their factories closed and their homes were taken. These funds will move onto the next
town. And the next. And another after that. They won't be stopped through blunt support of "free
enterprise," and they won't be stopped by simply calling them "vulture capitalists."
Strike through the mask!
Notes
[1] S.
Baron (ed) Economic History of the Jews (New York, 1976), 46-7.
To what extent is Jewish success a product of Jewish intellect and industry versus being a
result of a willingness to use low, dirty, honorless and anti-social tactics which, while maybe
not in violation of the word of the law, certainly violate its spirit? An application of
"chutzpah" to business, if you will -- the gall to break social conventions to get what you
want, while making other people feel uncomfortable; to wheedle your way in at the joints of
social norms and conventions -- not illegal, but selfish and rude. Krav Maga applies the same
concept to the martial arts: You're taught to go after the things that every other martial art
forbids you to target: the eyes, the testicles, etc. In other sports this is considered "low"
and "cheap." In Krav Maga, as perhaps a metaphor for Jewish behavior in general, nothing is too
low because it's all about winning .
There's a rather good article on the New Yorker discussing the Sacklers and the
Oxycontin epidemic. It focusses on the dichotomy between the family's ruthless promotion of the
drug and their lavish philanthropy. 'Leave the world a better place for your presence' and
similar pieties and Oxycontin.
The article lightly touches on the extent of their giving to Hebrew University of Jerusalem
-- but in general, treads lightly when it comes to their Judaism.
understandably. The New Yorker isn't exactly alt-right country, after all. But can
Joyce or anyone else provide a more exact breakdown on the Sacklers' giving? Are they genuine
philanthropists, or is it mostly for the Cause?
'To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit? '
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
I won't defend high finance because I don't like it either. But this is a retarded and
highly uninformed attack on it.
1. The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of bondholders,
probably the majority, cannot hold distressed or defaulted debt. Insurance companies often
can't by law. Bond mutual funds set out in their prospectuses they don't invest in anything
rated lower than A, AA, or whatever. Even those allowed to hold distressed debt don't want the
extra costs involved with doing so, such as carefully following bankruptcy proceedings and
dealing with delayed and irregular payments.
As a result, it is natural that normal investors sell off such debt at a discount to funds
that specialize in it.
2. Joyce defends large borrowers that default on their debt. Maybe the laws protecting
bankrupts and insolvents should be stronger. But you do that, and lenders become more
conservative, investment declines, and worthy businesses can't get investments. I think myself
the laws in the US are too favorable to lenders, but there's definitely a tradeoff, and the
question is where the happy middle ground is. In Florida a creditor can't force the sale of a
primary residence, even if it is worth $20 million. That's going too far in the other
direction.
3. " either blankly nondescript or evoking vague inklings of Anglo-Saxon or rural/pastoral
origins "
More retardation. Cerberus is a greek dog monster guarding the gates of hell. Aurelius is
from the Latin word for gold. "Hemisphere" isn't an Anglosaxon word nor does in invoke rural
origins.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a company
"Oaktree" should be limited to those of purely English blood! Jews must name their companies
"Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
4. The final and most general point: it's trivially easy to attack particular excesses of
capitalism. Fixing the excesses without creating bigger problem is the hard part. Two ideas I
favor are usury laws and Tobin taxes.
Very true. What's really disgusting about Singer is that he funds startups in Israel. So as
a Jewish American citizen he cares more for the well being of the average Israeli than
Americans. There's nothing 'conservative' about these hedge fund Jews. I'm glad to be a
Neanderthal according to Mr. Klarman's view. I happen to like Western Civilization and its
inherent beauty especially when confronted against globalist Zionists who think nothing of the
consequences of their behavior.
Jewishness aside, maximizing shareholder is the holy grail of all capitalist enterprises.
The capitalist rush to abandon the American working class when tariff barriers evaporated is
just another case of vulturism. Tax corporations based on the domestic content of their
products and ban usury and vulturism will evaporate.
Someone with the username kikz posted a link to this article in the occidental observer. I
read it and thought it was a great article. I'm glad it's featured here.
The article goes straight for the jugular and pulls no punches. It hits hard. I like
that:
1. It shines a light on the some of the scummiest of the scummiest Wall Street players.
2. It names names. From the actual vulture funds to the rollcall of Jewish actors running each.
It's astounding how ethnically uniform it is.
3. It proves Trump's ties with the most successful Vulture kingpin, Singer.
4. It shows how money flows from the fund owners to Zionist and Jewish causes.
This thing reads like a court indictment. It puts real world examples to many of the
theories that are represents on this site. Excellent article.
Tucker could have done a number on Trump friend Schwarzman too.Mark my words you're gonna
have another melt down now that all the people who lost their home and ended up in rentals stop
paying their rent that is now 2 1/2 times what their mortgage was.
This is another fake bubble being securitized and sold off. Just like putting people into
houses with ARMs who couldnt afford them when the rates went up, Scharzman will fill up his
rentals to 99% occupancy with special deals to sell them to investors, when the special deal
period runs out and the rent goes up people will move out looking for cheaper housing and the
securities wont be worth shit.
Blackstone Group , CEO Stephen A. Schwarzman Buys Houses in Bulk to Profit from Mortgage
Crisis
This is not surprising that this has happened. All of the de-regulation on Wall Street,
lobbied for by Wall Street has allowed this to transpire.
Congress does not even read the bills that they sign into law, let alone write them! Many
are written by ALEC American Legislative Exchange Council, the Chamber of Commerce, the
Realtor's assosiation, the Medical Industrial Complex, public employee unions, and various
other special interest groups!
Why is it a pressing issue to actively promote homosexuality? What is the point? That is
realy strange! There is a difference between not actively discriminating and actively
promoting!
Are they trying to worsen the AIDS epidemic or lower the birth rate? It does not make sense
to be actively promoting and encouraging homosexuality.
In Florida a creditor can't force the sale of a primary residence, even if it is worth $20
million
Unless the law has changed in the last two years they can .. the Fla exemption says the
affected property cannot be larger than half an acre in a municipality or 160 acres
elsewhere.
I had a friend interested in a foreclosed horse farm in Fla .I think it was 200 acres, valued
at about 6 million.
@Colin
Wright se funds, their legal expertise, and their political connections mean that borrowers
can more successfully be held to account. If I owned, say, Puerto Rican debt in my retirement
account, the chances that I could make Puerto Rico honor its obligations are much slimmer.
None of this is to suggest that finance, as we today know it, is perfect and that it
couldn't be reformed in any way to make its operation more conducive to nationalistic social
values, only that anti-cap ideologues like Joyce weave lurid tales of malfeasance out of
completely humdrum market economics (which is precisely the same market economics that Tucker
Carlson learned about too, btw).
Of course that Joyce is peddling his own obsessions, but I have to admit that Singer &
comp. are detestable. I know that what they're doing is not illegal, but it should be (in my
opinion), and those who are involved in such affairs are somehow odious. The same goes for
Icahn, Soros etc.
Ethnic angle is evident, too: how come Singer works exclusively with his co-ethnics in this
multi-ethnic USA? Non-Jewish & most Jewish entrepreneurs don't behave that way.
@Colin
Wright usual with Joyce (and not only Joyce of course). You take something that is human,
talk of Jews, point to that something in Jews, and pretend, trusting that your readers will
pretend the same, that it's a Jewish-specific something.
Because if you were to say: everyone does this, everywhere, but when Jews do it it's just on a
larger scale, then you'd be shining light on the fact that what changes with Jews is just
skills, and that they are intelligent enough to co-operate more than the others.
Like when Mac Donald speaks of Jewish self-deception.
I feel I am swimming in self-deception everytime I talk with people (more so with women), and
they aren't Jewish. Do people do anything, but self-deceive?
So?
I generally like Tucker but thought his piece on Singer was way off base and a silly hit
job. As others above have commented, if you think it's wrong to buy or try to collect on
defaulted debt, what is the alternative set of laws and behavior you are recommending? If debts
can simply be repudiated at will, capitalism cannot function. (Also, while it would take too
much time and space to debate the Puerto Rico situation here, it bears noting that the entire
PR public debt burden of ~$75 billion comes to around $25,000 per resident -- about a third of
the comparable burden of public sector debt per person in the United States, which itself
ignores tens of trillions of "off balance" sheet liabilities for underfunded social security,
Medicare, Medicaid and public sector pension obligations. The source of PR's problems lies
pretty clearly at the feet of PR's long corrupt politicians -- not the incidental holders of
its bonds who would simply like to be repaid or have the debt reasonably restructured.)
Other minor points worth noting:
Joyce names a few Jews associated with Baupost but misleadingly omits its president, the guy
who is running the show: Jim Mooney, a proud graduate of Holy Cross and big supporter of
Catholic and Jesuit causes. If memory serves, Jim was also the guy behind some of Baupost's
biggest and most successeful distressed debt (or "vulture" to use Joyce's pejorative term)
trades. The firm's Jewish founder (Seth Klarman) has also donated tons of money to secular
causes, including something like $60 million for a huge facility at Cornell.
Speaking of donations and Jews, I believe Bloomberg (not technically a "vulture" capitalist
but clearly just as bad -- I.e., Jewish -- on the Joyce scale) gave $1.5 billion to his alma
mater, Johns Hopkins. If memory serves, that may have been the largest donation to any
university ever. Maybe Carnegie's donations were greater in "real" dollars, but Bloomberg's
donation is still pretty significant -- with likely more to come.
Earlier this week, the Observer reported on a spat that had broken out between a
division of the giant Samsung empire and the American hedge fund Elliott Management. The
most newsworthy feature of the dispute involved a series of articles on Korean business
sites that pointedly criticized Elliott's CEO Paul Singer and directly attacked him for
being Jewish, noting that "Jewish money has long been known to be ruthless and merciless"
and claiming "It is a well-known fact that the US government is swayed by Jewish
capital."
"Do the Jews Really Control America?" asked one Chinese newsweekly headline in 2009. The
factoids doled out in such articles and in books about Jews in China -- for example: "The
world's wealth is in Americans' pockets; Americans are in Jews' pockets" -- would rightly
be seen to be alarming in other contexts. But in China, where Jews are widely perceived as
clever and accomplished, they are meant as compliments. Scan the shelves in any bookstore
in China and you are likely to find best-selling self-help books based on Jewish knowledge.
Most focus on how to make cash. Titles range from 101 Money Earning Secrets From Jews'
Notebooks to Learn To Make Money With the Jews.
"... Where is AOC in all this? She was th e prime mover on impeachment, specifically impeachment over a phone call rather than concentration camps and genocide. And now with impeachment she gave Pelosi cover to sell the country out again. I was wondering why many libreral centrists were expreasing admiration for her, a socialist. Maybe they recognized something? ..."
Interesting, to me at least, that the rocket docket timetable of the House impeachment
coincided with the deadline to pass a budget to avoid a(nother) govt shutdown. While all msm
eyes were transfixed by the hyperventilating spectacle, behind the scenes the budget passed
through the Dem House was filled with more tax breaks for the corporations and the .001%,
more money than the admin asked for the MIC, and killed a bill that would end medical
'surprise billing' (another gift to medical PE investors and giant hospital corporations),
basically a whole neolib wish list.
Interesting the two events coincided, and, that Nancy decided not to sent on the articles
to the Senate at this time. What gives? Is she hold on to them for a future time when she'll
need to use them as another distraction for the msm to report on? (no, that could not be the
reason. ;) )
Pointed this out a couple of days ago (Slate and Buzzfeed). Happy that it is not just the
online press pointing out it was Democrats killing this measure, Democrats in leadership
positions. I also like that few, if any, of our media is falling for the kabuki used by Neal
to stick the shiv in. Everyone gets that the 'competing plan' was there strictly to derail a
law that end the hugely profitable but fraudulent price gauging of healthcare by private
equity.
If he keeps this up, walking POS Schumer might make me miss Al D'Amato nah Al and Chuck
are just two different colors of tulle, adding illusion to the political process.
..and they could have just passed it for the good PR and then de-fanged it
administratively, but it looks like they wanted to press the point:
"No, Proles, we're not gonna let you breathe, not a bit."
Where is AOC in all this? She was th e prime mover on impeachment, specifically
impeachment over a phone call rather than concentration camps and genocide. And now with
impeachment she gave Pelosi cover to sell the country out again. I was wondering why many
libreral centrists were expreasing admiration for her, a socialist. Maybe they recognized
something?
@Colin
Wright Intelligence and bias for co-operation may lead some groups to far greater
achievements, in scams as well as in everything else.
That aside, I think we daily meet plenty of individuals who'd sell their mothers, and
maybe kill lives, for pennies. They are like machines not even conscious of what they are
doing.
I meet them daily, in whatever activity, and none of them is Jewish. Also their shops,
businesses, and so on are always the ones that prosper more: people love being scammed, and
people love the show of power implicit in making you pay some extra for the service you
requested, and still keeping plenty of customers with you.
So, it's the usual with Joyce (and not only Joyce of course). You take something that is
human, talk of Jews, point to that something in Jews, and pretend, trusting that your readers
will pretend the same, that it's a Jewish-specific something.
Because if you were to say: everyone does this, everywhere, but when Jews do it it's just on
a larger scale, then you'd be shining light on the fact that what changes with Jews is just
skills, and that they are intelligent enough to co-operate more than the others.
Like when Mac Donald speaks of Jewish self-deception.
I feel I am swimming in self-deception everytime I talk with people (more so with women), and
they aren't Jewish. Do people do anything, but self-deceive?
So?
Elliott Management is perhaps most notorious for its 15-year battle with the government
of Argentina, whose bonds were owned by the hedge fund. When Argentine president Cristina
Kirchner attempted to restructure the debt, Elliott -- unlike most of the bonds' owners --
refused to accept a large loss on its investment. It successfully sued in US courts, and in
pursuit of Argentine assets, convinced a court in Ghana to detain an Argentine naval
training vessel, then docked outside Accra with a crew of 22o. After a change of its
government, Argentina eventually settled and Singer's fund received $2.4 billion, almost
four times its initial investment. Kirchner, meanwhile, has been indicted for
corruption.
This massive transfer of the American tech industry has largely been the work of one
leading Republican donor -- billionaire hedge fund manager Paul Singer, who also funds the
neoconservative think tank American Enterprise Institute (AEI), the Islamophobic and
hawkish think tank Foundation for Defense of Democracies (FDD), the Republican Jewish
Coalition (RJC), and also funded the now-defunct Foreign Policy Initiative (FPI).
Singer's project to bolster Israel's tech economy at the U.S.' expense is known as
Start-Up Nation Central, which he founded in response to the global Boycott, Divest and
Sanctions (BDS) movement that seeks to use nonviolent means to pressure Israel to comply
with international law in relation to its treatment of Palestinians.
@Lot
You give partial information which seem misleading and use arguments which are also weak and
not enlightening.
1- Even if its natural that unsafe bonds are sold, this doesn't justify the practices and
methods of those vulture fonds which buy those fonds which are socially damaging. I'm not
certain of the details because it's an old case and people should seek more information. Very
broadly, in the case of Argentina most funds accepted to make an agreement with the country
and reduce their demands. Investors have to accept risks and losses. Paul Singer bought some
financial papers for nothing at that time and forced Argentina to pay the whole price. For
years Argentina refused to pay, but with the help of New York courts and the new Argentinian
president they were forced to pay Singer. This was not conservative capitalism but
imperialism. You can only act like Singer if you have the backing of courts, of a government
which you control and of an army like the US army. A fast internet search for titles of
articles: "Hedge fund billionaire Paul Singer's ruthless strategies include bullying CEOs,
suing governments and seizing their navy's ships". "How one hedge fund made $2 billion from
Argentina's economic colapse".
Andrew Sayer, professor in an English university, says in his book "Why we can't afford
the rich" that finances as they are practiced now may cost more than bring any value to a
society. It's a problem if some sectors of finances make outsized profits and use methods
which are more than questionable.
2- You say that if borrowers become more protected "lenders become more conservative,
investment declines, and worthy businesses can't get investments." I doubt this is true. In
the first place, risk investments by vulture fonds probably don't create any social value.
The original lenders who sold their bonds to such vulture fonds have anyway big or near total
losses in some cases and in spite of that they keep doing business. Why should we support
vulture fonds, what for? What positive function they play in society? In Germany, capitalism
was much more social in old days before a neoliberal wave forced Germany to change Rhine
capitalism. Local banks lended money to local business which they knew and which they had an
interest that they prosper. Larger banks lended money to big firms. Speculation like in
neoliberal capitalism wasn't needed.
3- The point which you didn't grasp is that there is a component of those business which
isn't publicly clear, the fact that they funcion along ethnic lines.
4- It would be easy to fix excesses of capitalism. The problem is that the people who
profit the most from the system also have the power to prevent any change.
The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of
bondholders, probably the majority, cannot hold distressed or defaulted debt. Insurance
companies often can't by law. Bond mutual funds set out in their prospectuses they don't
invest in anything rated lower than A, AA, or whatever. Even those allowed to hold
distressed debt don't want the extra costs involved with doing so, such as carefully
following bankruptcy proceedings and dealing with delayed and irregular payments.
The author is not a finance expert but he correctly spotlights flaws of so-called
'predatory capitalism' which is disproportionately Jewish.
Private equity is rife with vices like asset-stripping and looting e.g Eddie Lampert
('Jewishness' member) plus El Trumpo appointee Steven Mnuchin at Sears.
Vulture funds often load all sorts of costs, even frivolous ones, and extra interest
charges on the original debt to maximize profit.
Some countries have the Duplum rule which limits the amount you are liable to a creditor
when you default on a debt.
I generally like Tucker but thought his piece on Singer was way off base and a silly hit job.
As others above have commented, if you think it's wrong to buy or try to collect on defaulted
debt, what is the alternative set of laws and behavior you are recommending? If debts can
simply be repudiated at will, capitalism cannot function. (Also, while it would take too much
time and space to debate the Puerto Rico situation here, it bears noting that the entire PR
public debt burden of ~$75 billion comes to around $25,000 per resident -- about a third of
the comparable burden of public sector debt per person in the United States, which itself
ignores tens of trillions of "off balance" sheet liabilities for underfunded social security,
Medicare, Medicaid and public sector pension obligations. The source of PR's problems lies
pretty clearly at the feet of PR's long corrupt politicians -- not the incidental holders of
its bonds who would simply like to be repaid or have the debt reasonably restructured.)
Other minor points worth noting:
Joyce names a few Jews associated with Baupost but misleadingly omits its president, the
guy who is running the show: Jim Mooney, a proud graduate of Holy Cross and big supporter of
Catholic and Jesuit causes. If memory serves, Jim was also the guy behind some of Baupost's
biggest and most successeful distressed debt (or "vulture" to use Joyce's pejorative term)
trades. The firm's Jewish founder (Seth Klarman) has also donated tons of money to secular
causes, including something like $60 million for a huge facility at Cornell.
Speaking of donations and Jews, I believe Bloomberg (not technically a "vulture"
capitalist but clearly just as bad -- I.e., Jewish -- on the Joyce scale) gave $1.5 billion
to his alma mater, Johns Hopkins. If memory serves, that may have been the largest donation
to any university ever. Maybe Carnegie's donations were greater in "real" dollars, but
Bloomberg's donation is still pretty significant -- with likely more to come.
@sally
Sally, please, knock it off. If you worked on Wall Street you'd know this article is just the
tip of the iceberg of Jewish financial criminality. Years ago Jim Cramer of CNBC fame, who
used to appear with Goldman Sachs' former and current PR man Larry Kudlow, also headed Wall
Street's top hedge fund at the time, Cramer Berkowitz. A former employee and Jewish at that
wrote an expose, Trading With the Enemy letting non-Jews in the reading public in on
what's really going on. Of course there's a Jewish pipeline giving them the news before it's
news, which is what it means to be a Wall Street insider. Or so says Jim Cramer, and the book
establishes this with solid evidence and not speculation.
For example, one of the Jewish anchors on CNBC would routinely call Cramer, which the
author overheard at the trading desk, and tip Cramer off about a market moving news story
about to be aired so Cramer could front run the market, fanatically divvying the orders out
to avoid scrutiny. His most important client was Norman Podoretz of socialist fame, who put
up the seed money for Cramer, who'd be on the phone to Cramer throughout the day checking on
his investments when not pushing socialism on the stupid goys. That's what socialism means in
America. The big names among Jewish stock and bond analysts at the big houses would also be
on the line with Cramer right before market making analysis was about to be released.
It's also the case that no economy and society can survive the sort of FIRE parasitism
this country's now burdened with, which as Spengler put it a century ago, amounts to tricking
a profit off every penny of goyisher labor. A dog can handle a number of ticks and fleas
sucking its blood, but will die soon enough when the ticks and fleas are consuming a quarter
or more of its blood. As Dr Joyce points out in yet another brilliant article, DJT is
demonstrably a puppet of the Jewish billionaires mentioned, who're in a rage to destroy the
families and everything the fools attending his rallies hold dear.
@J
Adelman Yes, the Jews have always stood up for the underdog (except when they were slave
traders) and promoted social harmony (except for cultural Marxism) and "Jewish influence" is
purely a figment of your imagination (except WWI and the Communist revolution .and and ). And
they definitely have nothing to do with the financial industry or banks (it is all a
conspiracy the protocols ya know).
Do you really believe your own poopaganda? A little introspection goes a long way. Why
have you been persecuted or kicked out of every country you have ever lived in? You never,
ever do anything wrong?
No one is demonizing you. You do it to yourself. People like Epstein and Weinstein are
your standard bearers. Events like 9/11 are your trophies. Your infiltration of the body
politic and malign influence in society is once again becoming visible to everyone and it is
making you afraid.
You have done it again. You never, ever learn. You play the perpetual victim .everyone
hates me without a reason. My sin is greater than I can bear (Cain) everyone who comes across
me will kill me. I spend my time wandering the earth (boo ho). And despite slaying your
brother you are accorded divine protection.
Jesus said (paraphrasing here) that if the unclean spirit is cast out of a man and is not
replaced with something wholesome he takes "seven other spirits" into himself and becomes
totally insane. You did this to yourself and you will realize that your problem is no longer
with man but with God himself. Jacob the deceiver has wrestled all his life against his
fellow man and triumphed but now he will confront God himself. Get ready to meet your Maker
and see how far your excuses will get you with the Almighty.
Jewish financists are no longer Jewish, much like a socialist who became minister is no
longer a socialist minister. Unregulated finance promotes a set of destructive behaviors which
has nothing to do with nationality or ethnicity.
Of course that Joyce is peddling his own obsessions, but I have to admit that Singer &
comp. are detestable. I know that what they’re doing is not illegal, but it should be (in
my opinion), and those who are involved in such affairs are somehow odious. The same goes for
Icahn, Soros etc. Still Ethnic angle is evident, too: how come Singer works exclusively with his
co-ethnics in this multi-ethnic USA? Non-Jewish & most Jewish entrepreneurs don’t
behave that way.
It was very gratifying to see Tucker Carlson's
recent attack on the activities of Paul Singer's vulture fund, Elliot Associates, a group I
first
profiled four years ago. In many respects, it is truly remarkable that vulture funds like
Singer's escaped major media attention prior to this, especially when one considers how
extraordinarily harmful and exploitative they are. Many countries are now in very significant
debt to groups like Elliot Associates and, as Tucker's segment very starkly illustrated, their
reach has now extended into the very heart of small-town America. Shining a spotlight on the
spread of this virus is definitely welcome. I strongly believe, however, that the problem
presented by these cabals of exploitative financiers will only be solved if their true nature
is fully discerned. Thus far, the descriptive terminology employed in discussing their
activities has revolved only around the scavenging and parasitic nature of their activities.
Elliot Associates have therefore been described as a quintessential example of a "vulture fund"
practicing "vulture capitalism." But these funds aren't run by carrion birds. They are operated
almost exclusively by Jews. In the following essay, I want us to examine the largest and most
influential "vulture funds," to assess their leadership, ethos, financial practices, and how
they disseminate their dubiously acquired wealth. I want us to set aside colorful metaphors. I
want us to strike through the mask.
It is commonly agreed that the most significant global vulture funds are Elliot Management,
Cerberus, FG Hemisphere, Autonomy Capital, Baupost Group, Canyon Capital Advisors, Monarch
Alternative Capital, GoldenTree Asset Management, Aurelius Capital Management, OakTree Capital,
Fundamental Advisors, and Tilden Park Investment Master Fund LP. The names of these groups are
very interesting, being either blankly nondescript or evoking vague inklings of Anglo-Saxon or
rural/pastoral origins (note the prevalence of oak, trees, parks, canyons, monarchs, or the use
of names like Aurelius and Elliot). This is the same tactic employed by the Jew Jordan Belfort,
the "Wolf of Wall Street," who operated multiple major frauds under the business name Stratton
Oakmont.
These names are masks. They are designed to cultivate trust and obscure the real background
of the various groupings of financiers. None of these groups have Anglo-Saxon or venerable
origins. None are based in rural idylls. All of the vulture funds named above were founded by,
and continue to be operated by, ethnocentric, globalist, urban-dwelling Jews. A quick review of
each of their websites reveals their founders and central figures to be:
Elliot Management
-- Paul Singer, Zion Shohet, Jesse Cohn, Stephen Taub, Elliot Greenberg and Richard Zabel
Cerberus -- Stephen Feinberg, Lee Millstein, Jeffrey Lomasky, Seth Plattus, Joshua Weintraub,
Daniel Wolf, David Teitelbaum FG Hemisphere -- Peter Grossman Autonomy Capital -- Derek Goodman
Baupost Group -- Seth Klarman, Jordan Baruch, Isaac Auerbach Canyon Capital Advisors -- Joshua
Friedman, Mitchell Julis Monarch Alternative Capital -- Andrew Herenstein, Michael Weinstock
GoldenTree Asset Management -- Steven Tananbaum, Steven Shapiro Aurelius Capital Management --
Mark Brodsky, Samuel Rubin, Eleazer Klein, Jason Kaplan OakTree Capital -- Howard Marks, Bruce
Karsh, Jay Wintrob, John Frank, Sheldon Stone Fundamental Advisors -- Laurence Gottlieb,
Jonathan Stern Tilden Park Investment Master Fund LP -- Josh Birnbaum, Sam Alcoff
The fact that all of these vulture funds, widely acknowledged as the most influential and
predatory, are owned and operated by Jews is remarkable in itself, especially in a contemporary
context in which we are constantly bombarded with the suggestion that Jews don't have a special
relationship with money or usury, and that any such idea is an example of ignorant prejudice.
Equally remarkable, however, is the fact that Jewish representation saturates the board level
of these companies also, suggesting that their beginnings and methods of internal promotion and
operation rely heavily on ethnic-communal origins, and religious and social cohesion more
generally. As such, these Jewish funds provide an excellent opportunity to examine their
financial and political activities as expressions of Jewishness, and can thus be placed in the
broader framework of the Jewish group evolutionary strategy and the long historical trajectory
of Jewish-European relations.
How They Feed
In May 2018, Puerto Rico declared a form of municipal bankruptcy after falling into more
than
$74.8 billion in debt, of which more than $34 billion is interest and fees. The debt was
owed to
all of the Jewish capitalists named above, with the exception of Stephen Feinberg's
Cerberus group. In order to commence payments, the government had instituted a policy of fiscal
austerity, closing schools and raising utility bills, but when Hurricane Maria hit the island
in September 2017, Puerto Rico was forced to stop transfers to their Jewish creditors. This
provoked an aggressive attempt by the Jewish funds to seize assets from an island suffering
from an 80% power outage, with the addition of further interest and fees. Protests broke out in
several US cities calling for the debt to be forgiven. After a quick stop in Puerto Rico in
late 2018, Donald Trump pandered to this sentiment when he told Fox News, "They owe a lot of
money to your friends on Wall Street, and we're going to have to wipe that out." But Trump's
statement, like all of Trump's statements, had no substance. The following day, the director of
the White House budget office, Mick Mulvaney, told reporters: "I think what you heard the
president say is that Puerto Rico is going to have to figure out a way to solve its debt
problem." In other words, Puerto Rico is going to have to figure out a way to pay its Jews.
Trump's reversal is hardly surprising, given that the President is considered extremely
friendly to Jewish financial power. When he referred to "your friends on Wall Street" he really
meant his friends on Wall Street. One of his closest allies is Stephen Feinberg, founder
and CEO of Cerberus, a war-profiteering vulture fund that has now accumulated
more than $1.5 billion in Irish debt , leaving the country prone to a "
wave of home repossessions " on a scale not seen since the Jewish mortgage traders behind
Quicken Loans (Daniel Gilbert) and Ameriquest (Roland Arnall)
made thousands of Americans homeless . Feinberg has also been associated with mass
evictions in Spain, causing a collective of Barcelona anarchists to
label him a "Jewish mega parasite" in charge of the "world's vilest vulture fund." In May
2018, Trump made Feinberg
chair of his Intelligence Advisory Board , and one of the reasons for Trump's sluggish
retreat from Afghanistan has been the fact Feinberg's DynCorp has enjoyed years of lucrative government
defense contracts training Afghan police and providing ancillary services to the military.
But Trump's association with Jewish vultures goes far beyond Feinberg. A recent piece
in the New York Post declared "Orthodox Jews are opening up their wallets for Trump in
2020." This is a predictable outcome of the period 2016 to 2020, an era that could be neatly
characterised as How Jews learned to stop worrying and love the Don. Jewish financiers
are opening their wallets for Trump because it is now clear he utterly failed to fulfil
promises on mass immigration to White America, while pledging his commitment to Zionism and to
socially destructive Jewish side projects like the promotion of homosexuality. These actions,
coupled with his commuting
of Hasidic meatpacking boss Sholom Rubashkin 's 27-year-sentence for bank fraud and money
laundering in 2017, have sent a message to Jewish finance that Trump is someone they can do
business with. Since these globalist exploiters are essentially politically amorphous, knowing
no loyalty but that to their own tribe and its interests, there is significant drift of Jewish
mega-money between the Democratic and Republican parties. The New York Post reports, for
example, that when Trump attended a $25,000-per-couple luncheon in November at a Midtown hotel,
where 400 moneyed Jews raised at least $4 million for the America First [!] SuperPAC, the
luncheon organiser Kelly Sadler, told reporters, "We screened all of the people in attendance,
and we were surprised to see how many have given before to Democrats, but never a Republican.
People were standing up on their chairs chanting eight more years." The reality, of course, is
that these people are not Democrats or Republicans, but Jews, willing to push their money in
whatever direction the wind of Jewish interests is blowing.
The collapse of Puerto Rico under Jewish debt and elite courting of Jewish financial
predators is certainly nothing new. Congo , Zambia , Liberia ,
Argentina , Peru ,
Panama , Ecuador ,
Vietnam , Poland , and
Ireland are just some of the countries that have slipped fatefully into the hands of the
Jews listed above, and these same people are now closely watching
Greece and
India . The methodology used to acquire such leverage is as simple as it is ruthless. On
its most basic level, "vulture capitalism" is really just a combination of the
continued intense relationship between Jews and usury and Jewish involvement in medieval
tax farming. On the older practice, Salo Baron writes in Economic History of the Jews
that Jewish speculators would pay a lump sum to the treasury before mercilessly turning on the
peasantry to obtain "considerable surpluses if need be, by ruthless methods." [1] S. Baron
(ed) Economic History of the Jews (New York, 1976), 46-7. The activities of the
Jewish vulture funds are essentially the same speculation in debt, except here the trade in
usury is carried out on a global scale with the feudal peasants of old now replaced with entire
nations. Wealthy Jews pool resources, purchase debts, add astronomical fees and interests, and
when the inevitable default occurs they engage in aggressive legal activity to seize assets,
bringing waves of jobs losses and home repossessions.
This type of predation is so pernicious and morally perverse that both the
Belgian and
UK governments have taken steps to ban these Jewish firms from using their court systems to
sue for distressed debt owed by poor nations. Tucker Carlson, commenting on Paul Singer's
predation and the ruin of the town of Sidney, Nebraska, has said:
It couldn't be uglier or more destructive. So why is it still allowed in the United
States? The short answer: Because people like Paul Singer have tremendous influence over our
political process. Singer himself was the second largest donor to the Republican Party in
2016. He's given millions to a super-PAC that supports Republican senators. You may never
have heard of Paul Singer -- which tells you a lot in itself -- but in Washington, he's
rock-star famous. And that is why he is almost certainly paying a lower effective tax rate
than your average fireman, just in case you were still wondering if our system is rigged. Oh
yeah, it is.
Aside from direct political donations, these Jewish financiers also escape scrutiny by
hiding behind a mask of simplistic anti-socialist rhetoric that is common in the American
Right, especially the older, Christian, and pro-Zionist demographic. Rod Dreher, in a
commentary on Carlson's
piece at the American Conservative , points out that Singer gave a speech in May
2019 attacking the "rising threat of socialism within the Democratic Party." Singer continued,
"They call it socialism, but it is more accurately described as left-wing statism lubricated by
showers of free stuff promised by politicians who believe that money comes from a printing
press rather than the productive efforts of businesspeople and workers." Dreher comments: "The
productive efforts of businesspeople and workers"? The gall of that man, after what he did to
the people of Sidney."
What Singer and the other Jewish vultures engage in is not productive, and isn't even any
recognisable form of work or business. It is greed-motivated parasitism carried out on a
perversely extravagant and highly nepotistic scale. In truth, it is Singer and his co-ethnics
who believe that money can be printed on the backs of productive workers, and who ultimately
believe they have a right to be "showered by free stuff promised by politicians." Singer places
himself in an infantile paradigm meant to entertain the goyim, that of Free Enterprise vs
Socialism, but, as Carlson points out, "this is not the free enterprise that we all learned
about." That's because it's Jewish enterprise -- exploitative, inorganic, and attached to
socio-political goals that have nothing to do with individual freedom and private property.
This might not be the free enterprise Carlson learned about, but it's clearly the free
enterprise Jews learn about -- as illustrated in their extraordinary
over-representation in all forms of financial exploitation and white collar crime. The
Talmud, whether actively studied or culturally absorbed, is their code of ethics and their
curriculum in regards to fraud, fraudulent bankruptcy, embezzlement, usury, and financial
exploitation. Vulture capitalism is Jewish capitalism.
Whom They Feed
Singer's duplicity is a perfect example of the way in which Jewish finance postures as
conservative while conserving nothing. Indeed, Jewish capitalism may be regarded as the root
cause of the rise of Conservative Inc., a form or shadow of right wing politics reduced solely
to fiscal concerns that are ultimately, in themselves, harmful to the interests of the majority
of those who stupidly support them. The spirit of Jewish capitalism, ultimately, can be
discerned not in insincere bleating about socialism and business, intended merely to entertain
semi-educated Zio-patriots, but in the manner in which the Jewish vulture funds disseminate the
proceeds of their parasitism. Real vultures are weak, so will gorge at a carcass and
regurgitate food to feed their young. So then, who sits in the nests of the vulture funds,
awaiting the regurgitated remains of troubled nations?
Boston-based Seth Klarman (net worth $1.5 billion), who like Paul Singer has
declared "free enterprise has been good for me," is a rapacious debt exploiter who was
integral to the financial collapse of Puerto Rico, where he hid much of activities behind a
series of shell companies. Investigative journalists eventually discovered that Klarman's
Baupost group was behind much of the aggressive legal action intended to squeeze the decimated
island for bond payments. It's clear that the Jews involved in these companies are very much
aware that what they are doing is wrong, and they are careful to avoid too much reputational
damage, whether to themselves individually or to their ethnic group. Puerto Rican journalists,
investigating the debt trail to Klarman, recall trying to follow one of the shell companies
(Decagon) to Baupost via a shell company lawyer (and yet another Jew) named Jeffrey Katz:
Returning to the Ropes & Gray thread, we identified several attorneys who had worked
with the Baupost Group, and one, Jeffrey Katz, who – in addition to having worked
directly
with Baupost – seemed to describe a particularly close and longstanding relationship
with a firm fitting Baupost's profile on his experience page. I called
Katz and he picked up, to my surprise. I identified myself, as well as my affiliation with
the Public Accountability Initiative, and asked if he was the right person to talk to about
Decagon Holdings and Baupost. He paused, started to respond, and then evidently thought
better of it and said that he was actually in a meeting, and that I would need to call back
(apparently, this high-powered lawyer picks up calls from strange numbers when he is in
important meetings). As he was telling me to call back, I asked him again if he was the right
person to talk to about Decagon, and that I wouldn't call back if he wasn't, and he seemed to
get even more flustered. At that point he started talking too much, about how he was a lawyer
and has clients, how I must think I'm onto some kind of big scoop, and how there was a person
standing right in front of him – literally, standing right in front of him –
while I rudely insisted on keeping him on the line.
One of the reasons for such secrecy is the intensive Jewish philanthropy engaged in by
Klarman under his Klarman Family
Foundation . While Puerto Rican schools are being closed, and pensions and health
provisions slashed, Klarman is regurgitating the proceeds of massive debt speculation to his "
areas of
focus " which prominently includes " Supporting the global Jewish community
and Israel ." While plundering the treasuries of the crippled nations of the goyim, Klarman
and his co-ethnic associates have committed themselves to "improving the quality of life and
access to opportunities for all Israeli citizens so that they may benefit from the country's
prosperity." Among those in Klarman's nest, their beaks agape for Puerto Rican debt interest,
are the American Jewish Committee, Boston's Combined Jewish Philanthropies, the Holocaust
Memorial Museum, the Honeymoon Israel Foundation, Israel-America Academic Exchange, and the
Israel Project. Klarman, like Singer, has also been an enthusiastic proponent of liberalising
attitudes to homosexuality, donating $1 million to a Republican super PAC aimed at supporting
pro-gay marriage GOP candidates in 2014 (Singer donated $1.75 million). Klarman, who also
contributes to candidates
who support immigration reform, including a path to citizenship for undocumented immigrants,
has said "The right to gay marriage is the largest remaining civil rights issue of our time. I
work one-on-one with individual Republicans to try to get them to realize they are being
Neanderthals on this issue."
Steven Tananbaum's GoldenTree Asset Management has also fed well on Puerto Rico, owning $2.5
billion of the island's debt. The Centre for Economic and Policy Research has
commented :
Steven Tananbaum, GoldenTree's chief investment officer, told a business conference in
September (after Hurricane Irma, but before Hurricane Maria) that he continued to view Puerto
Rican bonds as an attractive investment. GoldenTree is spearheading a group of COFINA
bondholders that collectively holds about $3.3 billion in bonds. But with Puerto Rico facing
an unprecedented humanitarian crisis, and lacking enough funds to even begin to pay back its
massive debt load, these vulture funds are relying on their ability to convince politicians
and the courts to make them whole. The COFINA bondholder group has spent
$610,000 to lobby Congress over the last two years, while GoldenTree itself
made $64,000 in political contributions to federal candidates in the 2016 cycle. For
vulture funds like GoldenTree, the destruction of Puerto Rico is yet another opportunity for
exorbitant profits.
Whom does Tananbaum feed with these profits? A brief glance at the spending of the
Lisa and Steven Tananbaum Charitable Trust reveals a relatively short list of beneficiaries
including United Jewish Appeal Foundation, American Friends of Israel Museum, Jewish Community
Center, to be among the most generously funded, with sizeable donations also going to museums
specialising in the display of degenerate and demoralising art.
Following the collapse in Irish asset values in 2008, Jewish vulture funds including OakTree
Capital swooped on mortgagee debt to seize tens of thousands of Irish homes, shopping malls,
and utilities (Steve Feinberg's Cerberus took control of public waste disposal). In 2011,
Ireland emerged as a hotspot for distressed property assets, after its bad banks began selling
loans that had once been held by struggling financial institutions. These loans were quickly
purchased at knockdown prices by Jewish fund managers, who then aggressively sought the
eviction of residents in order to sell them for a fast profit. Michael Byrne, a researcher at
the School of Social Policy at University College Dublin, Ireland's largest university,
comments : "The
aggressive strategies used by vulture funds lead to human tragedies." One homeowner, Anna Flynn
recalls how her mortgage fell into the hands of Mars Capital, an affiliate of Oaktree Capital,
owned and operated by the Los Angeles-based Jews Howard Marks and Bruce Karsh. They were "very,
very difficult to deal with," said Flynn, a mother of four. "All [Mars] wanted was for me to
leave the house; they didn't want a solution [to ensure I could retain my home]."
When Bruce Karsh isn't making Irish people homeless, whom does he feed with his profits? A
brief glance at the spending of the
Karsh Family Foundation reveals millions of dollars of donations to the Jewish Federation,
Jewish Community Center, and the United Jewish Fund.
Paul Singer, his son Gordin, and their Elliot Associates colleagues Zion Shohet, Jesse Cohn,
Stephen Taub, Elliot Greenberg and Richard Zabel, have a foothold in almost every country, and
have a stake in every company you're likely to be familiar with, from book stores to dollar
stores. With the profits of exploitation, they
fund campaigns for homosexuality and mass migration , boost Zionist politics,
invest millions in security for Jews , and promote wars for Israel. Singer is a Republican,
and is on the Board of the Republican Jewish Coalition. He is a former board member of the
Jewish Institute for National Security Affairs, has funded neoconservative research groups like
the Middle East Media Research Institute and the Center for Security Policy, and is among the
largest funders of the neoconservative Foundation for Defense of Democracies. He was also
connected to the pro-Iraq War advocacy group Freedom's Watch. Another key Singer project was
the Foreign Policy Initiative (FPI), a Washington D.C.-based advocacy group that was founded in
2009 by several high-profile Jewish neoconservative figures to promote militaristic U.S.
policies in the Middle East on behalf of Israel and which received its seed money from
Singer.
Although Singer was initially anti-Trump, and although Trump once
attacked Singer for his pro-immigration politics ("Paul Singer represents amnesty and he
represents illegal immigration pouring into the country"), Trump is now essentially funded by
three Jews -- Singer, Bernard Marcus, and Sheldon Adelson, together accounting for over $250
million in pro-Trump political money . In return, they want war with Iran. Employees of
Elliott Management were one of the main sources of funding for the 2014 candidacy of the
Senate's most outspoken Iran hawk, Sen. Tom Cotton (R-AR), who urged Trump to conduct a
"retaliatory strike" against Iran for purportedly attacking two commercial tankers. These
exploitative Jewish financiers have been clear that they expect a war with Iran, and they are
lobbying hard and preparing to call in their pound of flesh. As one political commentator put
it, "These donors have made their policy preferences on Iran plainly known. They surely expect
a return on their investment in Trump's GOP."
The same pattern is witnessed again and again, illustrating the stark reality that the
prosperity and influence of Zionist globalism rests to an overwhelming degree on the predations
of the most successful and ruthless Jewish financial parasites. This is not conjecture,
exaggeration, or hyperbole. This is simply a matter of striking through the mask, looking at
the heads of the world's most predatory financial funds, and following the direction of
regurgitated profits.
Make no mistake, these cabals are everywhere and growing. They could be ignored when they
preyed on distant small nations, but their intention was always to come for you too. They are
now on your doorstep. The working people of Sidney, Nebraska probably had no idea what a
vulture fund was until their factories closed and their homes were taken. These funds will move
onto the next town. And the next. And another after that. They won't be stopped through blunt
support of "free enterprise," and they won't be stopped by simply calling them "vulture
capitalists."
Strike through the mask!
Notes
[1] S.
Baron (ed) Economic History of the Jews (New York, 1976), 46-7.
To what extent is Jewish success a product of Jewish intellect and industry versus being a
result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit?
An application of "chutzpah" to business, if you will – the gall to break social
conventions to get what you want, while making other people feel uncomfortable; to wheedle
your way in at the joints of social norms and conventions – not illegal, but selfish
and rude.
Krav Maga applies the same concept to the martial arts: You're taught to go after the
things that every other martial art forbids you to target: the eyes, the testicles, etc. In
other sports this is considered "low" and "cheap." In Krav Maga, as perhaps a metaphor for
Jewish behavior in general, nothing is too low because it's all about winning .
There's a rather good article on the New Yorker discussing the Sacklers and the
Oxycontin epidemic. It focusses on the dichotomy between the family's ruthless promotion of
the drug and their lavish philanthropy. 'Leave the world a better place for your presence'
and similar pieties and Oxycontin.
The article lightly touches on the extent of their giving to Hebrew University of
Jerusalem -- but in general, treads lightly when it comes to their Judaism.
understandably. The New Yorker isn't exactly alt-right country, after all. But can
Joyce or anyone else provide a more exact breakdown on the Sacklers' giving? Are they genuine
philanthropists, or is it mostly for the Cause?
@anon'To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit? '
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
I won't defend high finance because I don't like it either. But this is a retarded and highly
uninformed attack on it.
1. The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of bondholders,
probably the majority, cannot hold distressed or defaulted debt. Insurance companies often
can't by law. Bond mutual funds set out in their prospectuses they don't invest in anything
rated lower than A, AA, or whatever. Even those allowed to hold distressed debt don't want
the extra costs involved with doing so, such as carefully following bankruptcy proceedings
and dealing with delayed and irregular payments.
As a result, it is natural that normal investors sell off such debt at a discount to funds
that specialize in it.
2. Joyce defends large borrowers that default on their debt. Maybe the laws protecting
bankrupts and insolvents should be stronger. But you do that, and lenders become more
conservative, investment declines, and worthy businesses can't get investments. I think
myself the laws in the US are too favorable to lenders, but there's definitely a tradeoff,
and the question is where the happy middle ground is. In Florida a creditor can't force the
sale of a primary residence, even if it is worth $20 million. That's going too far in the
other direction.
3. " either blankly nondescript or evoking vague inklings of Anglo-Saxon or rural/pastoral
origins "
More retardation. Cerberus is a greek dog monster guarding the gates of hell. Aurelius is
from the Latin word for gold. "Hemisphere" isn't an Anglosaxon word nor does in invoke rural
origins.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a
company "Oaktree" should be limited to those of purely English blood! Jews must name their
companies "Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
4. The final and most general point: it's trivially easy to attack particular excesses of
capitalism. Fixing the excesses without creating bigger problem is the hard part. Two ideas I
favor are usury laws and Tobin taxes.
Jewishness aside, maximizing shareholder is the holy grail of all capitalist enterprises. The
capitalist rush to abandon the American working class when tariff barriers evaporated is just
another case of vulturism. Tax corporations based on the domestic content of their products
and ban usury and vulturism will evaporate.
Someone with the username kikz posted a link to this article in the occidental observer. I
read it and thought it was a great article. I'm glad it's featured here.
The article goes straight for the jugular and pulls no punches. It hits hard. I like
that:
1. It shines a light on the some of the scummiest of the scummiest Wall Street
players.
2. It names names. From the actual vulture funds to the rollcall of Jewish actors running
each. It's astounding how ethnically uniform it is.
3. It proves Trump's ties with the most successful Vulture kingpin, Singer.
4. It shows how money flows from the fund owners to Zionist and Jewish causes.
This thing reads like a court indictment. It puts real world examples to many of the
theories that are represents on this site. Excellent article.
Andrew Carnegie left behind institutions like Carnegie Hall, Carnegie-Mellon University,
and over 2500 Free Libraries from coast to coast, in a time when very little was done to
help what we now call the “underprivileged”.
And he funded the building of the Peace Palace (“Vredespaleis”) in The Hague,
presently the seat of the International Court of Justice, an institution not held in high
esteem in the home country of the generous donor.
Jimmy1969 says: December
19, 2019 at 2:12 pm GMT 200 Words Golden Tree Asset Management bought up Post Media in
Canada at a fire sale years ago from the bankrupt Asper family. Post Media is a conglomerate
that controls dozens and dozens of media outlets in all of Canada including 95% of all the
major Newspapers in every large city. Therefore Canadian news is de facto controlled by an
American New York Jewish hedge fund. That fact has been known for years and is joked about on
all of the bar stools in Canada where reporters hang out .but not in the Press. No one writes
about it none of the Nationalistic Professors, Journalists, Members of Parliament no one. One
fact is certain you will never ever see a single bad word in any of their papers critical of
Israel, or any actions of Israelis. Any comment critical of Israel or Zionist power, no matter
how objective or moderate is immediately deleted. And sadly this is no joke. The world should
take note of how Canada is strangled. Read More Replies: @bike-anarkist
Replies: @the
grand wazoo , @eah
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@silviosilver
Paying what you owe is perfectly fine and moral. Paying double of what you owe on account of
inflated fees and interest is blood sucking. Doing this to developing nations is downright
cruel.
Let's say Congo owes $10 billion. A finance firm buys that debt for $8 billion, collects
the full $10 billion (which already includes interest) and make a $2 billion profit. That's
not too terrible.
But to buy the debt for $8 billion and then force Congo to pay $60 billion is Jewish.
Playing the victim while accusing Congo of financial mismanagement and forcing them to close
their schools and hospitals – very Jewish. Evading the ethical implications of one's
actions and seeking cover behind legalism like a coward –> Jew level –
Godlike
Jews see themselves as the ingroup, and the "goyim" as the outgroup. Since Whites are the
"outgroup" it's not just acceptable, but praiseworthy, to exploit them. To "beat" them at
war.
The problem is that Whites wrongly do not see Jews as an outgroup – something that
Jews themselves take great pains to discourage via their various front groups like the
ADL.
There is no "technical" fix, there is no objective "system" that can change this dynamic.
There is no "level playing field."
Whites need to ostracize Jews at all levels. Boycott, Divest and Sanction – not just
their apartheid regime of Jew bigotry in Zionist-occupied Palestine, but at every level of
society, business, civil institutions, etc.
Jews are destroying the world. Everywhere they go, they leave behind nations in ruins.
Look at Europe, Africa and the Americas, Jews have left their ugly footprints. Corruption,
prostitution, drugs and human trafficking are their trade.
Reading the (obvious) Jews commenting here on their various financial swindle-systems is a
lot like reading zionists defending Israel. The basic tactics are always the same:
1.) Focus on some small aspects or most recent events and make a comparison to Gentiles or
other events with similar micro-narratives. "See? Everyone else does it! Why single out us
poor, persecuted Jews?"
2.) Use these minute distractions to drown out the overall issues, underlying concepts,
long history or guiding ideology in noise and minutiae.
3.) Never start at the beginning of the story and follow the trajectory though; always
start in the middle and focus on some trivial detail, use it to defend the (never stated)
sicko ideology that started the problem in the first place. Completely ignore any timelines
or larger perspectives.
David Icke calls it (or used to call it -- - back when his backbone was healthy) the
Reptilian Brain. The ability to manipulate trivial minutiae while never addressing underlying
concepts or timelines.
It is hard to feel sorry for WASPs, they struck a deal with the Jews centuries ago
Catholic political powers have been "striking deals with Jews" for two thousand years.
There is a synagogue in Rome right next to the Vatican which has been legally privileged
since the days of Christ. As E. Michael Jones detailed in his book, Jewish Revolutionary
Spirit , the Catholic Church itself defended Jews from the angry mobs time and time again
throughout their history, to the point bishops and priests would harbor Jews in the
cathedrals and lock the doors before the peasants could arrest them.
Indeed, the infighting among Whites promoted by the likes of Jones is yet again another
assist from Catholic powers to their partners, the Jews.
The popular "neo-reactionary/NRx" movement, started by the Ashkenazi Curtis Yarvin, is yet
another "right-wing" fad that blames Calvinists for all the problems in the world.
Jews are blameless, yet again another White ethnicity/religion is at fault.
No wonder Jews get away with what they do. Whites are too busy infighting over false
history demonizing various rival cults.
So, the "vultures" flew out to the West after devouring the Russian empire and now with the
help of the likes of the homeboy or more like a two bit whore, Ben Sasse, they've descended
on America and have started gutting it out.
Where will they fly next? White Christians don't want them and black/brown Muslims can't
stand them but perhaps China is their next destination being that they have shipped most of
the jobs out there and the whole lot of them are marrying "Chinese-American" women in droves
for good measure.
In the coming battle of the titans, the one who's name can't be pronounced, viz. Yahweh,
hopefully has better guns than Jehovah and Allah, for it sure is gonna need it when the
latter two gang up on it maybe Buddha will give it a helping hand being that they're
practically in-laws now!
My question is how do entities like Puerto Rico get so far in debt in the first
place?
For the same reason individuals get into debt, financial incompetence and sometimes a bit
of bad luck.
I've personally never understood how people can take out loans from companies like Wonga
or QuickQuid (both Jewish owned incidentally) seeing as they quite clearly advertise their
exorbitant interest rates.
Look up income by ethnic group in the UK and US, you will find that Indians and Chinese
(South Asians) are the richest in both countries (except for Jews of course).
What I have found is that these two groups come from a debt-averse culture, their kids
actually live with their parents until they have saved enough money for a house and other
such things required to start a family.
Whites meanwhile are WAY to trusting of these faceless financial institutions, they get
into debt very easily and thus become slaves, if you have kids, the first thing you should
educate them about is finance and debt, don't throw them out to the dogs either, it's tragic
to see some getting into debt and then having other problems like drugs and alcohol
addictions.
I came out of that book with the utmost admiration for Bill Browder.
You don't seem to be serious, if I understood what you want to say. Even Der Spiegel has
published a critical article in English about Browder, Browder is the one who pushed for
sanctions against Russia because of the case Magnitsky:
Questions Cloud Story Behind U.S. Sanctions
The story of Sergei Magnitsky has come to symbolize the brutal persecution of
whistleblowers in Russia. Ten years after his death, inconsistencies in Magnitsky's story
suggest he may not have been the hero many people -- and Western governments -- believed him
to be.
@Anonymous
Sure, but you're talking utopia. The reality is that public entities issue bonds to finance
special projects or even their operations. Somebody then buys the bonds and expects to be
paid back.
@Realist
There is something especially deficient with Whites when it comes to money matter, how can
such a large number of Whites take short-term loans from companies like Wonga and QuickQuid,
when the nature of their business (usury) is very clearly advertised. I was around 10 years
old when I was astounded at the 5000% APR loans advertised on TV, and wondered if I
understood interest right.
Parents, especially White ones, really need to educate their children on personal finance
and debt, it seems a lot of Whites these days do not actually own anything and all their
flashy gadgets and whatnot are being loaned out (buying Iphone on contract for example),
these people are the hardest hit as they can't scrape together even a couple of hundred
pounds/dollars/euros when hard times come. Its farcical albeit tragic.
Wow what a confused mess. Here's a summary: Vulture capitalism is bad for no particular
reason but only an evil anti-Semite (like you) would dare criticize capitalism.
And they want the island of Puerto Rico for themselves, save a few thousand able bodies to
serve as maids and gardeners. But what about the triple-raced residents of the island itself?
Well, that's easy! Dump them in states like Florida and New York and let the suckers pay for
it. After all, it's not like they are going to vote for the other side we get to eat the cake
and keep it too!
An article that appeared in Goebbels newspaper, Der Angriff (The Attack) titled
"The Jew", a short excerpt that is relevant to your comment;
The Jew is immunized against all dangers: one may call him a scoundrel, parasite,
swindler, profiteer, it all runs off him like water off a raincoat. But call him a Jew and
you will be astonished at how he recoils, how injured he is, how he suddenly shrinks back:
"I've been found out."
I think the term "vulture capitalism" is calumnious to vultures, who, as carrion birds,
perform a useful and purifying function in nature.
The Jews as a collective, i.e., the Jews who identify as such, concur in the death
sentence of Christ handed down by their Sanhedrin and espouse the Talmudic mitzvah of killing
the best of the gentiles (which naturally implies elevating the worst of the gentiles to
power and prominence) are more to be likened to plague bearing rodents. Unlike vultures, rats
feast on corruption and putrescence, spread disease and also kill the living.
We embrace the finance capitalist worldview at our peril. In its essence, it is nothing
but the worship of money making and profiteering as the supreme aspiration of life,
irregardless of its horrible effects on our compatriots and fellow humans. In doing so, we
become Jews at heart.
There is nothing wrong with industry and the profit motive per se. Predatory finance
contributes nothing to the well being of a nation and the needs of the physical economy- it
is supremely toxic and corrosive of both. It must be expunged and its champions expropriated
and exiled. People like the odious Peter Singer have no place in a moral world; they ought to
be first expropriated, then exiled as far away from their host societies as possible.
I was personally wounded by the anti gay rhetoric peppered across this article. I can't help
making the association that Paul singer's son came out as gay and that this must be the
source of the author's animus against him and the others. Shakespeare, who was also
homosexual, described this state of mind as "a green eyed monster," i.e. jealousy. I'm
mortified that other members of the commentariat have not taken issue with this. Maybe we
would be more compassionate to the denizens of middle America if they allowed our most basic
civil rights.
@J
Adelman Oh those kind jews have always been for the working class? But there is a white
working class and jews want them extinct from the face of the earth. Read 'Abolishing
whiteness has never been more urgent.' By Mark Levine
@silviosilver
You make several good points but you don't address the issue of capitalists manipulating the
politicians with campaign contributions. If a fund gets paid off by public money due to
politicians putting the fund owners ahead of the taxpayers, that's corrupt. What happened to
the 'creative destruction' principle by which large IBs like Goldman would have been allowed
to collapse and their principals carried off in leg-irons in 2008? Oh -- they are "too big to
fail and too big to jail." So much for the free market myth.
Moreover, most Jews support endless free money for "victim groups" to be forcibly
extracted from the middle-class. Never mind if Mr. Jones has a lengthy criminal record, let's
pay for him to go to college, let's pay his rent, let's pay his medical bills, etc. Why then
take such a hard line on people who foolishly get into debt?
Moreover, the economic downturn that caused many mortgagors to default was CAUSED BY the
big Wall Street firms' irresponsible behavior.
Also, most people do tend to temper economic contracts with a degree of compassion.
Gentile capitalism does not exist in a vacuum.
I recall reading about a young female environmentalist who was refusing to leave a
venerable redwood tree that was scheduled to be cut down. The WASP businessman who owned the
tree was extremely patient with the girl, tried to win her over, threw her food and drinks,
and so on. The land with the tree was then sold to some Jewish firm. At that point the
article left off. The tree was cut down with no further negotiation.
The greatest jewish vulture fund is the zionist privately owned feral reserve aka the FED ,
is creates money out of thin air and feeds this money to the otherwise bankrupt zionist banks
and not just here in the ZUS but in Europe, and the BIS is the vulture fund of vulture funds
owned by the zionists, the biggest scam in the history of the world.
By the way, Tucker Carlson said that 911 truthers were nuts, that says it all about
him.
Mass immigration for cheap labor, the weaponization of the grievance industry against
white majority/European nations and the use for the production of anti-white race baiting
media.
Much great work!! Very impressed. Would recommend to Moses himself.
@Colin
Wright I remember seeing a clip where Jared Taylor was on some talk show. He was calmly
citing statistics on how blacks are over represented among violent criminals. A sassy black
women broken in with "Jeffrey Dahmer Ted Bundy they were all white!" Not her exact words but
something to that effect. Naxalt, in other words.
I don't think Joyce is suggesting that all unscrupulous capitalists are Jews, or vice
versa. It is true that gentiles can be scumbags (the Enron boys.)
Now most Muslims are not terrorists, and many terrorists are not Muslims.
And yet it seems like there are many people who will notice patterns among other groups,
rightfully roll their eyes when they hear PC arguments in favor of those groups, and then
pull out the naxalt and what-about-isms when you notice patterns in Jewish behavior.
@Dutch
Boy Your statement: "maximizing shareholder is the holy grail of all capitalist
enterprises" statement is spot on.
I've been saying that for decades.
Labor is never given value, but is a commodity-a "necessary evil" according to the Wall
Street types and is to be minimized and marginalized at all costs.
Adolph Hitler's Germany monetized labor and gave it value. THAT is the reason that the
jews went after Germany. Post WW1 Germany was successful in its economy due to throwing off
the shackles (and shekels) of the internationalist banksters.
Henry Ford CREATED a market which had not existed when he paid his employees $5.00 per day
when the average wage of the day was around $1.25 per day. His premise was not entirely
altruistic as assembly line work was monotonous; a way had to be found to retain employees as
well.
Of course, the wall street types and the banksters howled that Ford's wage rates would
destroy capitalism (as they knew it-those at the top reap all of the benefits while the
proles are forced to live on a bare subsistence wage, due to the machinations of those at the
top).
Guess what??
The OPPOSITE happened. Henry Ford knew one of the basic tenets of a truly free,
capitalistic society, that a well-paid work force would be able to participate and contribute
to a strong economy, unlike what is taught in business schools today-that wages must be kept
to a bare minimum and that the stockholder is king.
Our "free trade" politicians have assisted the greedy wall street types and banksters in
depressing wages on the promise of cheap foreign labor and products.
A good example of this is the negative criticism that Costco receives for paying its
employees well above market wages. These same wall street types praise Wal-Mart for paying
its employees barely subsistence wages while assisting them in filling out their public
assistance (welfare) forms.
Any sane person KNOWS that in order for capitalism to work, employees need to make an
adequate wage. Unfortunately, this premise does not exist in today's business climate.
Henry Ford openly criticized those of the "tribe" for manipulating wall street and
banksters to their own advantage, and was roundly (and unjustly) criticized for pointing out
the TRUTH.
Catholic priest, Father Coughlin did the same thing and was punished by the Catholic
church, despite his popularity and exposing the TRUTH of the American economy and the
outsider internationalists that ran it . . . and STILL run it.
Our race to the bottom will not be without consequences. A great realignment is necessary
(and is coming) . .
@lavoisier
I'm not sure I'd put Buffett in that category. For example, in one of the companies he
bought, he kept a factory with declining profits open as long as he could to avoid throwing a
large chunk of people out of work overnight. He has mostly made his money by avoiding dopey
fads and a disciplined buy-and-hold approach to stocks.
@J
Adelman' Jewish people have always stood against tyranny against the working class,
the poor and other people of color." '
Right. I'd say Jews actually collaborated extensively in the imposition of tyranny
on the working class in Eastern Europe from 1917 to 1991. That'd be one counter-example.
Should we explore others? The role of Jews in the medieval slave trade? After all,
somebody had to castrate all those Christian boys who were to serve as harem
guards.
No reason to dredge up ancient history -- except here you are, making a blatantly false
claim about it. 'Always stood against ', my ass.
They are gunning for India now who do you think that brought in the Turks who ruled as the
Moguls to exploit the Hindu wealth and later on who did in the Muslims?
Disraeli and his ilk always knew that India was poor but their temples were rich with gold
and it's that they are after one can't build one's own "Third Temple" without it.
Why are the black cohens being promoted (South Brahmins the most pliable ones) at Google,
Microsoft and Pepsi etc.? Because the waterboys, and girls, will help rope in what's left of
the Indian carcass for thirty pieces of silver!
@secondElijah
You are probably the most antisemitic troll I have ever met online.
So, when did Epstein and Weinstein become the standard bearers of the Jewish community?
It is your jealousy of the Jewish people that makes you spew such vile hatred here.
Smug, obnoxious white people like you who have always considered this country their private
preserve are an endangered species. The demographic trends cannot be denied.
In less than 25 years white folks will become a minority in this country. So enjoy it while
you can, Bubba, your days of driving the bus are numbered.
You and other whites here are like the bad guys in every horror movie ever made, who gets
shot five times, or stabbed ten, or blown up twice, and who will eventually pass -- even if
it takes four sequels to make it happen -- but who in the meantime keeps coming back around,
grabbing at our ankles as we walk by, we having been mistakenly convinced that you were
finally dead this time. Fair enough, and have at it. But remember how this movie ends. Our
ankles survive.
YOU DO NOT.
@Saguaro
The soup has boiled over, the horse has bolted and the barn has burnt down and yet you
Yankees haven't woken up.Your politicians are whores who cannot function without funding from
the jews. And Jeffery got them all for Mossad. Enjoy
@Vaterland
The "standing up for People of Color" schtick is particularly disingenous, as all the Jews
have really done isuse their disproportionate control of the media to peddle false narratives
and distort history. One good example of this is the case of then president of the Atlanda
chapter of B'nai B'rith, Leo Frank. Frank had raped and murdered 13 year-old Mary Phagan and
when he was found out, he used his connection with New York Jews to get lots of money and
hire the best defence lawyers, his lawyer then launched vicious racial attacks on a Black
semi-literate janitor who worked in the factory that Frank was in charge of (and where Phagan
worked) to try and convict him of the horrible crime.
Jews will be friends of POC when it suits them. The funny thing about the Frank case is
that the Jewish media has made it out that Frank was innocent and wrongly lynched (only after
his death sentence had been commuted by a judge who was suspected to have been bribed by
powerful New York Jews), and that the Black janitor was the guilty one. This is absurd seeing
as the racist Southern jury would never favour a "White" man over a Black man (anti-semtism
wasn't that big in the South, and especially so considering this was before the Bolsheviks
took control of Russia), and that if Frank had truly been White, this case would be a
landmark case in which the evil rich White man was tried and the Black man was given
justice.
"Gentlemen! I too have been a close observer of the doings of the Bank of the United States.
I have had men watching you for a long time, and am convinced that you have used the funds of
the bank to speculate in the breadstuffs of the country. When you won, you divided the
profits amongst you, and when you lost, you charged it to the bank. You tell me that if I
take the deposits from the bank and annul its charter I shall ruin ten thousand families.
That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin
fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I
have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I
will rout you out!"
Islam stands in their way of usury-ripping of mankind of their
resources and defrauding mankind via bank thefts.
Bring on the Shariah Law. I would much rather live under Shariah, God's Constitution than
under Euoropean/Western diabolic, satanic, fraudulent monies, homosexual, thievery, false
flag hoaxes, WMD's, bogus wars, Unprovoked oppression, tel-LIE-vision, Santa Claus lies,
Disney hocus pocus , hollywood, illuminati, free mason, monarchy, oligarchy, millitary
industrial complex, life time congressman/senators, upto the eye balls taxation, IRS
thievery, Fraudulent federal reserve, Rothchild/Rockerfeller/Queens and Kings city of London
satanic cabal, opec petro$$$ thievery, ISISraHELL's, al-CIA-da hoaxes, Communist, Atheist,
Idol worshippers, Fear Monger's, Drugged and Drunken's oxy crystal coccaine meth psychopath,
child pedeophilia, gambler's, Pathological and diabolical liars, Hypocrites, sodomites ..I
can't think of any right now, because my mind is exploding with rage because of these
troubling central banker's satanic hegemony!
Quran Chapter 30
39. The usury you practice, seeking thereby to multiply people's wealth, will not multiply
with God. But what you give in charity, desiring God's approval -- these are the
multipliers.
40. God is He who created you, then provides for you, then makes you die, then brings you
back to life. Can any of your idols do any of that? Glorified is He, and Exalted above what
they associate.
41. Corruption has appeared on land and sea, because of what people's hands have earned, in
order to make them taste some of what they have done, so that they might return.
@Really
No Shit Jews are doing to White countries what Whites and Jews did to India, no honour
amongst thieves, the ones with the higher verbal IQ wins.
Also it is important to note that the reason India came under the sway of Anglo-Zionist
banking cartels so easily was because how divided it was, I reckon that is why they are
promoting mass immigration. Import lots of different groups, then run lots of race-baiting
stories to distract the plebs from their financial machinations.
This is why Jews are well represented in non-antisemitic White Nationalist organisations
like Jared Taylor's AmRen, they are great at playing both sides.
And he funded the building of the Peace Palace ("Vredespaleis") in The Hague, presently
the seat of the International Court of Justice, an institution not held in high esteem in
the home country of the generous donor.
@Wally
You can act confused all you want, you know exactly what I am talking about, the fact of the
matter is Whites like you and Joyce would be laughing it up at countries/territories like
Puerto Rico, Congo, Vietnam etc etc being carved up and financially enslaved if Whites were
also allowed a piece of the pie along with Jews (as was the case in the days of the British
Empire when WASP's and Jews worked together), but now that the low-IQ countries have been
looted, the Jews have turned on the Whites and the latter are now crying that their criminal
comrades have now betrayed them.
You quite clearly have a clue, you are just terrified and trying to divert because I am
right, the Jews will do to the White nations what the White nations and Jews did to the
non-White nations. All I can say is that you WASPs should have kept to youselves like Eastern
Europeans and Eastern Asians, they didn't really engage in lofty ambitons to dominate the
world and as such are intact at the moment and seem like they will remain that way for a long
time, they are the true conservatives, WASPs have always had a Jewish streak within their
corrupt souls and are now paying the price for engaging with a criminal race.
Why do you think Epstein has all these Gentiles in his pocket? You think do-gooding
gentiles just randomly decided to get into bed with Epstein and Co.? How many East Asians and
Eastern Euros do you see terrified of being outed as paedophiles.
Don't deceive yourselves, all debts are paid in the end, especially when the creditors are
Jews.
@Adrian
They are a function of Empire in Hague, who protect empire criminals, and assume a non
existent legitimacy and jurisdiction as a private entity to take down empire opponents.
It is the very same kangaroo court as the IMT or Tokio show trials.
In the book "Heaven is for real" a 4 year old boy who supposedly is dead for a short period,
but actually visits heaven; when he returns, is asked : what is the meaning, the purpose of
life on earth?
His response is so simple, that it could only be true. And it could only come from
knowing
Don't deceive yourselves, all debts are paid in the end, especially when the creditors
are Jews.
It is a mathematical impossibility due to interest. The FED probably goes negative
interest like ECB mafia.
Chances are higher they do a reset and start anew with an electronic ponzi scheme.
No one seriously plans to pay these "debts", they can't be paid, and are actually a nothing
burger, pure fiction.
" it is truly remarkable that vulture funds like Singer's escaped major media attention prior
to this ."
Not really. The Jew's grip is starting to slip now, though. More and more people are
becoming aware that they are virulent parasites and always have been.
@Mulegino1
Real capitalism is the competition of ideas, innovation, efficient manufacturing and quality
products made and produced by honest companies. That competition can, in theory at least,
make people (and companies) "try harder". But only when a company's success is determined by
the strength of its products, not by the "deals" it cuts with Jewish financial, advertising,
"marketing" and swindling rackets, designed to line the pockets of the Jew while destroying
honest competition by Gentiles who struggle to play fair and innovate.
Jewish vulture "capitalism" contributes NOTHING of value to any company or any culture. It
never has and never will.
You and other whites here are like the bad guys in every horror movie ever made, who
gets shot five times, or stabbed ten, or blown up twice, and who will eventually pass --
even if it takes four sequels to make it happen -- but who in the meantime keeps coming
back around, grabbing at our ankles as we walk by, we having been mistakenly convinced that
you were finally dead this time. Fair enough, and have at it. But remember how this movie
ends. Our ankles survive.
YOU DO NOT.
Talk about deflection. Any nation, empire, culture or civilization wherein the Jewish
collective gains critical mass and ultimately absolute power turns into a real horror,
not a movie. The Jews may be said to be the true prototype of the "bad guys in every horror
movie", since they can only be gotten rid of by very rigorous means taken in the healthiest
and most vigorous cultures and societies. Indeed, antisemitism itself is the healthy
immunological reaction of a flourishing culture, and its lack thereof the pathology of a
moribund one.
Woke Christians of European provenance have nothing to envy the Jew (the archetypal Jew)
over. We realize that the true measure of success is not primarily monetary or the
fulfillment of cheap ambitions, but a spiritual and cultural one. On the contrary, the Jewish
hatred against Christian Europe and the civilization that it constructed is engendered out of
sheer envy and malice, because Jewry understands that is would never be capable of
constructing anything similar, and never has. In all of the arts, Jewry has produced nothing
of note.
This is not to say that individual Jews have not made contributions to the arts and sciences,
but they have done so only by participation in gentile culture, not qua Jews. Jewry only
tears down and deconstructs; it is not creative in the sense of high art, and can thrive only
in the swamp of gentile decadence and moral putrefaction. Whatever Jewry touches, it turns to
merde.
European Jewish IQ has only gone 1/2 a standard deviation above the white norm in the last
100 years. Interesting to know why, but the belief Jews have always been more intelligent is
just lack of data.
bias for co-operation
Nazis did this too – they worked reaaally well with each other. The issue was how
they thought of and treated others.
That aside, I think we daily meet plenty of individuals who'd sell their mothers, and
maybe kill lives, for pennies. They are like machines not even conscious of what they are
doing.
Your 1 data point aside, are you saying all humans act in identical ways, regardless of
how the ideologies they embrace ask them to act?
Take the ideology of Islam – it does not allow for aggressive war, surprise attacks,
the killing of women or children (unless they take up arms)..
Judaism allows for aggressive war, surprise attack, and demands the killing of all
when a state of war is declared.
Do you believe these declarations lead to identical actions by their practitioners? (in
other words – people act how they would wish to act, and don't really engage in any
belief systems beyond what pulls their own selves?)
So, it's the usual with Joyce (and not only Joyce of course). You take something that is
human, talk of Jews, point to that something in Jews, and pretend, trusting that your
readers will pretend the same, that it's a Jewish-specific something.
Yes, correct – no ideology is perfect at taming human action, and corruption is a
human action, not a Jewish action. But we could still engage in comparative ideology, and
this is what Joyce (and not only Joyce, of course) engage in.
Saying 'well, all peoples engage in force and deceit, so is there any actual difference
between them and their beliefs?' is absurdism. In such a world, I will build a nation of
priests, fashioned along the lines of the Aztek priesthood. Give me your children so I can
rip out their hearts and make it rain – after all 'we are all the same'!!
The argument is that, for the proportion of the population, the fraction of monopoly power
in Western economies that is taken up by Jewish power is much disproportional to other
nations/belief systems.
It is fair to ask whether people who engage in other belief systems have the same level of
desire for monopoly, just less skill to get it due to their belief systems.. I would say yes,
they have the same level of desire (we are all human after all (not that if you read chapter
1 of the Tanya, you will be offered that point of view)) – but that their belief
systems specifically push them away from materialism and desire for money and power, even at
the expense of others. That is the exact point of religion (self-improvement) btw, so
the next question is – is the Jewish religion effective?
At which point, the Jewish ideology becomes the wolf in the hen house – because it
fails to tame the human away from such materialistic desire (as it btw claims it does
best).
Should the hens be allowed to point out what they see as a wolf? Yes.
That the supposed wolf then obfuscates and justifies their actions by pointing to others,
mostly, betrays that it is, in fact, a wolf.
I have become totally disenchanted with the SEC. Stupid, Evil, Crazy! It would not surprise
me if they are the ones that have been terrorizing me, with stupid, evil, crazy chants
through appliances after illegallly implaced RFIDs, microchips, or sensors illegally
implanted in my ears and nose that started after my first phone was hacked in 2017! Can't
expect stupid people not to be stupid, evil people not to be evil, and crazy people not to be
crazy! They were just born that way!
@J
Adleman brookings.edu : "The US will become minority white in 2045 Census projects "
:
"During that year [2045] whites will comprise 49.7 per cent of the population in contrast to
24.6 per cent for Hispanics , 13.1 per cent for Blacks , 7.9 per cent for Asians and 3.8 per
cent for multi-racial populations " Are these projections good or bad for the "Jewish people
" ?
Nov 22, 2013 Thomas DiLorenzo – The Revolution Of 1913
From the Tom Woods show Loyola economics professor Thomas DiLorenzo discusses three events
from 1913 that greatly escalated the transmogrification of America from the founder's vision
(limited government) to its current state (unlimited government).
@silviosilver
Yes, and just because you can doesn't mean you should. And if there's a predilection among
jewish men to engage in predatory lending and collecting tactics that is disproportionate to
their of the population, there's something about their genes or their culture that shapes
them to be this way.
Also, notice how you left out the part where they jack up the interest rates and debtor's
fees to grossly inflate their income. Is there a reason to do this other than as a quick way
to make money off already impoverished people? It's kind of like opening up a rent to own
place in a low income place. The people who do that shit know exactly why they should set up
among poor people; low wealth and bad decision making abound.
And yes, it does seem to be particularly jewish given how many jews are involved in its
practice and given that it used to be frowned upon in Christian Europe. Hell, God himself (as
Jesus) went and beat the shit out of a bunch of jews for their money lending in the temple.
That's the best part of the Bible, frankly. God gets so sick of the his own chosen people
that he sends himself to chastise and whip them for their greed and hubris. No lesson was
learned.
And then they killed him. And they lost their homeland for 2000 years. And then were
kicked out of a hundred plus kingdoms, cities and countries. And then a miserable liberal
shows how vile and stupid their children are:
You know, maybe instead of making excuses, you can just acknowledge the wrongdoing and
acknowledge that some jews are particularly malicious. Cuz eventually, people are
gonna get sick of the shit jews pull and see jewish (or gentile zionist) people defending
their obvious misdeeds and get pissed at them as well. Remember, the well is open to
everyone.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a
company "Oaktree" should be limited to those of purely English blood! Jews must name their
companies "Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
Telling that you go with hyperbole here: the only two options must be Albion
Whyteman Capital or Foreskin-Chewing Pornographers Incorporated!
There are two interesting things about the onomastics of the prepuce-free business world.
One is that far fewer sons of Abraham name their businesses after themselves (I'm sure this
will insincerely be attributed to some fear of native kulaks' repressed urge-to-pogrom, even
in Finland or Japan.) The other is an observation made by an associate of a famous Austrian
landscapist: even merely remarking on their origins causes these guys mental distress.
Here in the melting pot, the difference couldn't be any starker. You can make small talk
with any flavor of goy based on it: that's a Polish name, isn't it? Yeah, how did you
know! Try this one with Levy or Nussbaum down at The Smith Group or The Jones Foundation
and watch them plotz.
Jews have always weaponized usury. Long before Christianity, Jews operated the East/West
mechanism on donkey caravan trade routes. Silver would drain from the West, and Gold would
drain from the east, while Jewish caravaneers would take usury on exchange rate differences.
This operated for thousands of years.
Haibaru donkey bones have been discovered outside of Sumer. The Aiparu/Haibaru (Hebrew)
tribes were formed as merchants operating between city states. In those days, psychopaths and
criminals would be excommunicated from civilized city states, and would take up with the
wandering merchant tribe.
Why do you think the Jew is always interested in owing the money power? Why do you think
the Jew perpetually stands outside the walls of the city state, plotting its destruction?
History tells us things, and we had better listen. That is – real history, not what
you learned in (((public skool))). There are two ways to deal with the Jew: 1) Remove him
from your country. 2) Limit him.
Limiting was done by Byzantium under Justinian. The Jew was limited FROM money
counting/banking; limited from participation in government; limited from access to pervert
young minds – especially as school teachers and professors.
It takes a King or Tsar who cares about his population, and is willing to eject or filter
out toxins from the body politic. (((Democracy))) is a failed form of government, whereby
monied Oligarchs control the polity by compromat and pulling strings.
You are not going to be able to vote your way out of the Jew problem.
@Colin
Wright Echoing words once supposedly used by Hermann Goering: whenever I here the word
'philanthropist' these days, I instinctively reach for my revolver!
Take the ideology of Islam – it does not allow for aggressive war, surprise
attacks, the killing of women or children (unless they take up arms)..
Ilya,
There is deception in Islam. Sorry. You cannot make claims about Islam not allowing for
aggressive war and surprise attacks.
These concepts even have names and doctrine that support them. Wahabbi/Salafist Islam is
exactly in alignment with Islamic teachings, especially when using abrogation techniques.
Taqiyya is lying with intent to deceive. The analog in Judaism is the Kol-Niedre, which
allows one pre-forgiveness for lying, cheating, even murder of Goyim.
Hudnas is are used to lay in wait, build up strength, to then attack the enemy.
Islam has derogatory terms to demean e.g. Kaffirs, which is similar to Goyim.
There is also deception in Christianity, but this deception is OUT OF ALIGNMENT WITH
DOCTRINE. The doctrine of super-session means the old testament is superseded, completed, a
historical record.
In Islam the doctrine of Abrogation means that the more pacific Meccan verses are
abrogated (made less relevant) that post Medina. Ergo, Wahabbi Islam and the Takfiri's are
doctrinaly correct, while Judaizer Christians (those that worship the old testament) are out
of alignment and heretics.
Judaism is actually a new religion that came into being after 73 AD, when the verbal
tradition (Caballa) became written down into Talmud.
Our Jewish friends have always been practicing usury, going back to since forever.
Our Jewish friends, I count as worse that Islamics. However two wrongs don't make a right.
Islam badly needs reform or to be expunged. Talmudic Judaism is by far the worst religion on
the planet, and its adherents must malfunction by definition.
o ..kill all the Jewish, er, "vulture capitalists" , right? Or should we go "easy" on
them all and merely ship them all off to special "re-education" camps? Or am I missing
something here ?
You are missing something because you are unwilling to adapt and learn with new
information. This makes you an ideologue.
Lolbertarianism IS A JEWISH CONSTRUCT.
There are no such things as free markets. Money's true nature is law, not gold. Money
didn't come into being with barter and other nonsense lolbertarians believe.
Most of the luminaries that came up with "libertarian" economics are Jews, and it is a
doctrine of deception. The idea is to confuse the goyim with thoughts and ideas that make
them easy pickings.
A determined in-group of predators operating in unison, will take down an "individual"
every-time.
Don't expect anything to improve with Jay Clayton as SEC Chair, and his wife and her father
Gretchen Butler Clayton who was CEO of CSC and mysterious WMB Holdings which share the same
address in addition to many Goldman Sachs divisions. Gretchen was employed by Goldman Sachs
as an attorney from 1999-2017. Many companies affiliated with the Panama Papers share the
same address as well.
Jewish people have treated me better than my own White Euro family.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them
out . and so their charity is within the tribe, but there is no charity within the tribe
among Whites.
Jews, along with Asians and at least some Africans, believe in not just climbing the
ladder, but in actually helping others – at least family – up it also. Whites
believe in climbing the ladder and then pulling it up after them.
I was explaining to a friend recently: My (relative) has proven that if I showed up at
their door, starving, they'd not give me a cheese sandwich, while in my experience, strangers
have been overall a fairly kind lot and a stranger, 50/50, might. Therefore, while I find the
idea of robbing or burning down the house of a stranger abhorrent, I don't mind the idea so
much when it involves a person who's proven to be cold and evil.
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New
York where they were being befriended by a Jewish family. There was a ray of hope. The Irish
kids, at least, would have been fed, steered into decent schooling, etc. But foolishly they
went back to Ireland, to be treated like utter dogshit by their fellow White family and
"people".
Most of the predation going on in the US and worldwide is being done by WASPS who are
using Jews as a convenient scapegoat.
@tono
bungay Feel free to offer us some counter-examples, tono. How many such funds to you know
of that aren't disproportionately Jewish? We're all ears!
@Robjil
This is an example of what I was saying. Less Euro whites in the world is not going to be a
good world for Big Js. Non-Euros believe in freedom of speech.
Jewish Bigwigs can't get control of businesses in East Asia. They have been trying. Paul
Singer tried and failed. In Argentina he got lots of "success". Why? Lots of descendants of
Europeans there went along with "decisions" laid out by New York Jews.
Little Paulie tried to get control of Samsung. No such luck for him in Korea. In Korea
there are many family monopolies, chaebols. A Korean chaebol stopped him. Jewish Daniel Loeb
tried to get a board seat on Sony. He was rebuffed.
I was moved to reflect on the universality of this theme recently when surveying media
coverage on Korean and Argentinian responses to the activities of Paul Singer and his
co-ethnic shareholders at Elliott Associates, an arm of Singer's Elliott Management hedge
fund. The Korean story has its origins in the efforts of Samsung's holding company, Cheil
Industries, to buy Samsung C&T, the engineering and construction arm of the wider
Samsung family of businesses. The move can be seen as part of an effort to reinforce
control of the conglomerate by the founding Lee family and its heir apparent, Lee Jae-yong.
Trouble emerged when Singer's company, which holds a 7.12% stake in Samsung C&T and is
itself attempting to expand its influence and control over Far East tech companies,
objected to the move. The story is fairly typical of Jewish difficulties in penetrating
business cultures in the Far East, where impenetrable family monopolies, known in Korea as
chaebols, are common. This new story reminded me very strongly of last year's efforts by
Jewish financier Daniel Loeb to obtain a board seat at Sony. Loeb was repeatedly rebuffed
by COO Kazuo Hirai, eventually selling his stake in Sony Corp. in frustration.
Here is how the Koreans fought off Paul Singer.
The predominantly Jewish-owned and operated Elliott Associates has a wealth of
self-interest in preventing the Lee family from consolidating its control over the Samsung
conglomerate. As racial outsiders, however, Singer's firm were forced into several tactical
measures in their 52-day attempt to thwart the merger. First came lawsuits. When those
failed, Singer and his associates then postured themselves as defending Korean interests,
starting a Korean-language website and arguing that their position was really just in aid
of helping domestic Korean shareholders. This variation on the familiar theme of Jewish
crypsis was quite unsuccessful. The Lee family went on the offensive immediately and,
unlike many Westerners, were not shy in drawing attention to the Jewish nature of Singer's
interference and the sordid and intensely parasitic nature of his fund's other
ventures.
Cartoons were drawn of Singer being a vulture.
Other cartoons appearing at the same time represented Elliott, literally, as humanoid
vultures, with captions referring to the well-known history of the fund. In the above
cartoon, the vulture offers assistance to a needy and destitute figure, but conceals an axe
with which to later bludgeon the unsuspecting pauper.
ADL got all worked about this. The Koreans did not care. It is reality. Freedom of speech
works on these vultures. The west should try some real freedom of speech.
After the cartoons appeared, Singer and other influential Jews, including Abraham
Foxman, cried anti-Semitism. This was despite the fact the cartoons contain no reference
whatsoever to Judaism – unless of course one defines savage economic predation as a
Jewish trait. Samsung denied the cartoons were anti-Semitic and took them off the website,
but the uproar over the cartoons only seemed to spur on even more discussion about Jewish
influence in South Korea than was previously the case. In a piece published a fortnight
ago, Media Pen columnist Kim Ji-ho claimed "Jewish money has long been known to be ruthless
and merciless." Last week, the former South Korean ambassador to Morocco, Park Jae-seon,
expressed his concern about the influence of Jews in finance when he said, "The scary thing
about Jews is they are grabbing the currency markets and financial investment companies.
Their network is tight-knit beyond one's imagination." The next day, cable news channel YTN
aired similar comments by local journalist Park Seong-ho, who stated on air that "it is a
fact that Jews use financial networks and have influence wherever they are born." It goes
without saying that comments like these are unambiguously similar to complaints about
Jewish economic practices in Europe over the course of centuries. The only common
denominator between the context of fourteenth-century France and the context of
twenty-first-century South Korea is, you guessed it, Jewish economic practices.
The Koreans won. Paulie lost. Good win for humanity. The Argentines were not so lucky.
They don't have freedom speech like the Koreans and East Asians have.
In the end, the Lee strategy, based on drawing attention to the alien and exploitative
nature of Elliott Associates, was overwhelmingly effective. Before a crucial shareholder
vote on the Lee's planned merger, Samsung Securities CEO Yoon Yong-am said: "We should
score a victory by a big margin in the first battle, in order to take the upper hand in a
looming war against Elliott, and keep other speculative hedge funds from taking short-term
gains in the domestic market." When the vote finally took place a few days ago, a
conclusive 69.5% of Samsung shareholders voted in favor of the Lee proposal, leaving
Elliott licking its wounds and complaining about the "patriotic marketing" of those behind
the merger.
@jack
daniels Now that I think about it, it was unfair to make an anecdotal judgment that
Jewish lenders are less forgiving. There are plenty of examples, I'm sure, of compassionate
Jews and flinty gentiles.
Finally! An intelligent criticism of Trump for a change. So tired of the brainless
Democrat/MSM impeachment circus. They make me feel like a reflexive MAGAtard just for
defending the constitution, logic, etc., from their never-ending stream of inanities.
Meanwhile, the real problem with Trump is not that he's Hitler; it's that he's not Hitler
enough!
I am also so tired of Zionist-loving cucks bleeting on about the evils of the CRA without
ever considering the role played by the (((profiteers))) who lobbied such policies into law
in the first place. Realize that what Paul Singer does for a living used to be illegal in
this country up until recently. That's right: US bankruptcy law used to forbid investors from
buying up debt second-hand at a discount and then trying to reclaim the entire face
value from the debtor. But I see all kinds of people even on this thread blaming the victim
instead -- 'Damn goyishe deadbeats!' Whatever
What Singer and the other Jewish vultures engage in is not productive, and isn't even
any recognisable form of work or business. It is greed-motivated parasitism carried out on
a perversely extravagant and highly nepotistic scale. In truth, it is Singer and his
co-ethnics who believe that money can be printed on the backs of productive workers, and
who ultimately believe they have a right to be "showered by free stuff promised by
politicians."
To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit?
The last Gentleman on WS was not a Jew. Bring back the WASP. You can maintain your honor,
and manners and still succeed. Jews take the easy low road of deception and cheating. WASP
take the higher road of harder work and ethical business practice.
[MORE]
The courtly Mr. Jenrette, who has been dubbed "the last gentleman on Wall Street" earned this
sobriquet largely for his reputation of being particularly sensitive to the human dimension
in an industry where such matters often get sidestepped. Nonetheless, despite Mr. Jenrette's
modest demeanor, he's risen to the top in an often cutthroat business. He remained with
Donaldson Lufkin through good times and bad, guiding it after its two other founding partners
departed for other ventures and, next month, he will step down as the chairman of the
Securities Industry Association, the brokerage trade group.
"Dick has been the one who carried the firm from its original promise through to closure,"
said Samuel Hayes 3d, an investment banking professor at the Harvard Business School.
"Dick's more in tune with human values and that's not frequently found on Wall Street."
Richard Jenrette, 89, Wall Street power, Raleigh native, dies https://www.wral.com ›
richard-jenrette-89-wall-street-power-and-preserva
Apr 23, 2018 – A courtly, soft-spoken North Carolina native whom The New York Times
once called the "last gentleman on Wall Street," Jenrette (pronounced
Wall Street's 'last gentleman' left behind these 24 lessons about life and success: At the
time of his death late last month due to complications from lymphoma, these couple dozen
rules to live by were left on his desk.
Stay in the game. That's often all you need to do -- don't quit. Stick around! Don't be a
quitter!
•Don't burn bridges (behind you)
•Remember -- Life has no blessing like a good friend!
•You can't get enough of them
•Don't leave old friends behind -- you may need them
•Try to be nice and say "thank you" a lot!
•Stay informed/KEEP LEARNING!
•Study -- Stay Educated. Do Your Home Work!! Keep learning!
•Cultivate friends of all ages -- especially younger
•Run Scared -- over-prepare
•Be proud -- no Uriah Heep for you! But not conceited. Know your own worth.
•Plan ahead but be prepared to allow when opportunity presents itself.
•Turn Problems into Opportunities. Very often it can be done. Problems create
opportunities for change -- people willing to consider change when there are problems.
•Present yourself well. Clean, clean-shaven, dress "classically" to age. Beware style,
trends. Look for charm. Good grammar. Don't swear so much -- it's not cute.
•But be open to change -- don't be stuck in mud. Be willing to consider what's new but
don't blindly follow it. USE YOUR HEAD -- COMMON SENSE.
•Have some fun -- but not all the time!
•Be on the side of the Angels. Wear the White Hat.
•Have a fall-back position. Heir and the spare. Don't leave all your money in one
place.
•Learn a foreign language.
•Travel a lot -- around the world, if possible.
•Don't criticize someone in front of others.
•Don't forget to praise a job well done (but don't praise a poor job)
•I don't like to lose -- but don't be a poor loser if you do.
•It helps to have someone to love who loves you (not just sex).
•Keep your standards high in all you do.
•Look for the big picture but don't forget the small details.
"Permit me to issue and control the money of a nation and I" care not who makes its laws"
That is what Mayer Amschel Rothchild said in the 1750s. Now, is it a stretch of my
imagination to believe the Central Banks of the West, all Jewish controlled, would unfairly
favor their 'own' when issueing or disbursing the money they are permitted to create.
We are not allowed to audit the Federal Reserve, so we know not what they do with it beyond
what they tell us. In 2016 it was discovered that between the year 1999 and 2016 well over
$23 trillions had been stolen from just 2 departments of our government, the DoD and HUD.
(Someone should look at NASA). Is it possible the seed money, for not only Venture
capitalists schemes but also buying governments and law makers, has been diverted, shoveled
out of the back door of these corrupt central banks and into the hands of their fellow
jews?
Anyway, the more exposure articles like this get the closer we get to ending their reign.
As I noted in my previous examination of contemporary Jewish usury, Jews have been at
the forefront of innovation in debt for many centuries, and remain its most adroit auteurs.
Although obviously rooted in centuries of Jewish financial practice, Singer and his
co-ethnics (all four equity partners of Elliott are Jewish, and its COO is the
charmingly-named Zion Shohet) pioneered the finer points of the vulture-fund concept. The
firm was born in 1977 when Singer pooled $1.3 million from family and friends,
His firm's first big "win" was the pillage of Panama in 1995.
but it only really took off in October 1995, when Elliott Associates L.P. purchased
$28.7 million of Panamanian sovereign debt for the discounted price of $17.5 million. The
banks holding those bonds, a group that included heavy hitters like Citi and Credit Suisse,
had given up on repayment from Panama. To cut their losses, they sold their holdings to
Elliott which, like a medieval tax farmer, went in with a heavy hand. When Panama's
government asked for a restructuring of its foreign debt in 1995, the vast majority of its
bondholders agreed – apart from Elliott. In July 1996, Elliott Associates,
represented by one of the world's most high-profile securities law firms, filed a lawsuit
against Panama in a New York district court, seeking full repayment of the original $28.7
million – plus interest and fees. The case made its way from a district court in
Manhattan to the New York State Supreme Court, which sided with Elliott. In the end,
Panama's government had to pay the Jewish group over $57 million, with an additional $14
million going to other creditors. Overnight, Singer's group made $40 million, and the
people of Panama found their original sovereign debt had more than doubled.
@Mefobills
If you could point to a verse in the Quran that allows for aggressive war, it would help me
learn – when I read it I saw an explosive self defence at any infringment on the Ummah,
but not much beyond that.
Of course the origination story of the faith is one of fighting, and without any wise men
to guide the laypeople, the faith has an issue in that it is easy for people to not follow
what it teaches.
Islam has been assaulted for a millennium, and so the self defence aspect of its faith has
become more active than the rest.. it needs reform I agree (and not in the direction the
Salafists have taken it), but more so there is a need for the Ummah to have a few generations
of non-aggression from the outside world.. without it the pressure will only be towards
violence – for any nation or faith!
Judaism has monopolized for millennia though, and still acts as a victim. Different kettle
of fish.
Also, you can debate the positives and negatives of Islam with a Muslim (not as a rabid
ignoramus of course – you must be polite, and have learnt something, as well as be open
to learning more). Almost every debate with a Jew about Judaism has started with, continued
with, and ended with name calling for me however.
Judaism fails as a religion because it does not encourage the practitioner to look at
themselves when confronted with error, Islam still does imo.
Does anyone here remember how John Leibowitz aka John Stewart spent months ripping Mitt
Romney to shreds? Remember? Evil white man vulture capitalism at Bain? Remember? Romney was
Adolf Hitler, and look he put his golden retriever on the roof once?
Say. How come that Mr Leibowitz never talked about the Jews who basically destroyed yes
the entire Rust belt by acquisition and outsource?
That Mr Johnny Leibovitz sure did hate the goy a lot and all. He never talked about his
own people. What a fair fellow Mr Johnny Leibovitz was. He even changed his name. Why change
the name?
Remember. Bain Capital and that kind of merger pump and dumps is all done by Mormons
goyim.
@Colin
Wright Your statement: "Jews actually collaborated extensively in the imposition of
tyranny on the working class in Eastern Europe from 1917 to 1991" not only applies to Europe,
but the united States of America as well.
It's the JEWS it's always the JEWS
[MORE]
Our present situation and the devolving into the morass of "multiculturalism" and "diversity"
is no accident. The jewish talmud and that jewish invention-communism has "rules" for the
debasement of (white) civil society.
The following statements are a result of personal experiences–your mileage may
vary
I came of age during the first so-called "civil-rights" movement and saw for myself the
underhanded dealings, the demonization of decent, law-abiding whites, and in general, the
deterioration of civil society.
Almost all of the "civil-rights" workers and demonstration "handlers" were of one
persuasion–New York based leftist communist jews. They cared not one wit about true
"civil rights", but were there to create hate and discontent among their black charges (who
were too stupid or naive to see that they were being used to suborn and destroy legitimate
government and society–a favorite communist tactic).
These New York-based "carpetbaggers" fomented their hate and discontent, only to become
future "civil-rights" attorneys, race-hustlers, and America-hating leftist communists and the
ADL and $PLC being invented.
Those of us whites who were in the middle of this "civil-rights" revolution had a saying:
" Behind every negro, there is a jew ". No truer words were spoken.
Let's not forget their infestation of the nation's education and entertainment systems,
(which continues to the present day), in which they can spread their jewish supremacist
poison.
The so-called "non-violent civil-rights demonstrations" were anything but "non-violent".
Robberies, rapes, and other criminal acts were common, but never reported, as even the
"mainstream media" was "in on the game" and conveniently turned off their cameras during the
acts of violence. You see, even then,"creating crises" was a part of the agenda.
The "beginning of the end" of America was the use of federal troops against white
Americans, which, in itself was a violation of "posse comitatus"–the prohibition on the
use of federal troops for domestic "law enforcement" purposes. As most whites were (and still
are) law-abiding, they (we) were "steamrollered" by the use of federal troops to crush honest
dissent. We never recovered from those unconstitutional actions. It was all downhill from
there
The next step may be "civil-war" in which us whites will have to take back our birthright
by force.
"Foreign Policy described the court's decision as "a groundbreaking moment in the modern
history of finance." By taking the case to a New York district court, Elliott broke with
long-standing international law and custom, according to which sovereign governments are not
sued in regular courts meant to deal with questions internal to a nation state. Further, the
presiding judge accepted the case – another break with custom. It set the stage for two
decades of similar parasitism on struggling countries by Elliott Associates, a practice that
has reaped billions for Jewish financiers. "
A year later after the ground breaking decision. Paulie tries this scam on another nation,
Peru.
Just one year after the Panama decision, Singer spent about $11 million on
government-backed Peruvian bank debt in 1996. After Singer took Peru to court in the U.S.,
U.K., Luxembourg, Belgium, Germany, and Canada, the struggling nation finally agreed in
2000 to pay him $58 million. That meant he got better than a 400 percent return.
In 2001, the victim was Argentina.
In 2001, Elliott Associates purchased an Argentinian default for $48 million; the face
value of that debt today is $630 million. The fund wants repayment for the full value of
the debt to all of Argentina's creditors, as it did in 1995 with Panama. This amounts to
$1.5 billion, which could rise to $3 billion including, again, that all-important interest
and fees.
Another victim was the Congo in 2002-03.
..specific activities of Elliott Associates in Congo, where it originally bought $32.6
million in sovereign debt incurred by that country for the knockdown price of under $20
million. In 2002 and 2003, a British court (tactically chosen) forced the Congolese
government to settle for an estimated $90 million, which included that all-important
interest and fees. Elliott Associates rapidly became known as the quintessential "vulture
fund."
1. Re Sidney, Nebraska: Maybe I'm missing something but wasn't it Cabela's owners, for
example co-founder and chairman Jim Cabela, who sold Cabela, not Elliot Management (Singer et
al)? I gather Elliot Management owned only 11% of the company. Was that enough to force them
to sell?
2. The article confuses honest straightforward loans with tax farming and government
corruption. Loans can be very useful, e.g. for a car to get to a job, or for a house so you
build up equity instead of paying rent.
@Hapalong
Cassidy Bain's not much of an exception to Joyce's pattern: although Mitt, like the other
three founders, was a goy, there were plenty of Chosen Ones associated with the company right
from the start:
In addition to the three founding partners, the early team included Fraser Bullock,
Robert F. White, Joshua Bekenstein, Adam Kirsch, and Geoffrey S. Rehnert Early investors
included Boston real estate mogul Mortimer Zuckerman and Robert Kraft, the owner of the New
England Patriots football team.
@BannedHipster
According to the Talmud, we goyim are not the descendants of Adam and Eve, like the
Jews. No, we are the bastard progeny of Adam's first wife, Lilleth, who eloped with the demon
Samael. So we goyim are really all half-demons and therefore we are an abomination in the
sight of Jew-hova, and we get what we deserve at the hands of his 'chosen people'.
improving the quality of life and access to opportunities for all Israeli citizens so that
they may benefit from the country's prosperity
Read 'all Jewish Israeli citizens'. I doubt they're going to do any life-enhancing
or make opportunities available to any of the grunting subhuman goyim .
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
Andrew Carnegie built something that made life better for people. Making steel is a
beneficial thing.
These evil vulture Jews build nothing – they make people poorer. They suck the
wealth out of people who have little. They know 100% what they are doing.
Jesus expressed anger against the money changers on the temple steps.
It is OK for you to have natural human feelings and be angry at these Jew bastards.
@Anon
Romney is a Mormon, one of the church officials. The Mormons are closer to the Jews pattern
of worshiping money and using charity donation for business investments.
Mormons arent considered Protestants .
"Although the church has not released church-wide financial statements since 1959, in
1997, Time magazine called it one of the world's wealthiest churches per capita.[147] In a
June 2011 cover story, Newsweek stated that the LDS Church "resembles a sanctified
multinational corporation -- the General Electric of American religion, with global ambitions
and an estimated net worth of $30 billion." A whistle blower within the church reported them
to the IRS for using their status as a non taxable religious groups to invest in business
ventures instead of charities.
@anon
Maybe I can answer your question.
I studied and befriended many jews as a student (Imperial College, London etc) – none
were above average intelligent, and although they were very geeky, they only got average
grades.
When I moved to LA – most of my friends were jews and again, none were very bright
(even though a few were famous). Most of these LA jewish friends were probably psychopaths
– thinking back – very manipulative, exploitative and they lied a lot.
I think it's mostly through their cultural nepotism – they work on their own unity
(they help promote each other) while at the same time they work on destroying unity in their
host and everyone else.
Many have changed their Eastern European names.
And they go out of the way to help other jews (only) – a Serbian friend in Toronto
looks very jewish (but is not religious) told me several times here in Toronto, other Jews
(his boss etc) just offered to help him for no reason ("Is there anything I can do for you?"
etc). He did not understand why they did that – then I realized he actually looks like
a Jewish stereotype (as does his twin brother). So he thought he was helping his own
tribe.
When I went to Cuba with a Jewish 'friend' from LA – he was actively looking for
anything jewish (and nothign else – he did not want to see anything famous like a
beautiful cemetery in Havana etc) – only synagogs etc – where he gave some money
to jews he never even met. I was there with him and saw it. He was even angry if I suggested
we see something nice , historical and not-jewish. We met a NY jew there and we gave his a
ride in the car we rented – they immediately teamed up against me – for no reason
– I regretted going with him on this trip. It was an awful experience –
consistent with all the books I read on psychopaths and also that book Jewish History, Jewish
Religion, the weight of 3000 years
Another very wealthy American mother of a friend asked her South African friends (also jews)
to help her book trips in South Africa (and they of course recommended only their Jewish
friends) – it's their son who told me this.
So a lot of backstabbing, cultural nepotism and actively (but in a hidden way as most
psychopaths like to do) they do at wakening and isolating their host. That's their only
advantage – not intelligence (at least in my experience )
I recently learned that from about 1790 to 1967 the USState department refused to issue US
passports to people who held foreign passports. State also didn't hire any dual citizens for
any job from cafeteria dishwasher to ambassador.
Then in the mid sixties, an Israeli immigrant who became a US citizen applied for a US
passport. State refused to issue the US passport. So the Israeli immigrant practiced lawfare.
In 1967 the Supreme Court issued one of its usual detrimental and dangerous rulings. State
was ordered to start issuing US passports to dual citizens.
Soon there were numerous applications to State depot jobs from Israeli citizens residing
in the US. Knowing lawsuits loomed, State caved.
And that children is how and why State, commerce, DOJ CIA treasury, top security civilian
departments in the Pentagon and other federal agencies became flooded with dual American
Israeli citizens who divert money to Israel. Plus they work for Israel instead of the US.
Mysterious how the only Whites who manage to make it past affirmative action barriers are
jews.
Maybe there's a special affirmative action quota for Israelis residing in America.
@J
Adelman Adelman, be careful what you wish for, as in a debate you will be drowned.
Being labeled an ANTISEMITE is the new badge of honor and courage.
Central banks and their fiat fractional reserve banking system is slowly collapsing, as more
and more nations avoid using the BIS. Joyce's article fully explains why Russia is being
promoted as some type of arch-enemy.
@DaveE
I don't even know what capitalism means anymore. It doesn't seem like it's an actual free
market system. Seems like it is slavery for the little guy, and parasitism for the rich.
Maybe we should ditch the word capitalism for usuryism.
"'It was very gratifying to see Tucker Carlson's recent attack on the activities of Paul
Singer's vulture fund, Elliot Associates '"
I am going to avoid the Jew is bad mantra here. I read that article. But it was not an
expose' of hedgefunds, at least not at the level i was expecting. They merged two companies
and sold off or closed that which was least profitable.
In that article there was no clear discussion – about what could have prevented the
closure. So it was hard to respond positively in favor of not closing. I am advocate of
keeping work in the US, but I don't think it is unreasonable that companies be sustainable. I
would have liked that exposure, that the hedge had no intention of exploring possible profit
making alternatives.
And that is where Mr. Carlson lost me. He did not link the companies as you have. Nor
provide the examples you bring to the fore.
What distresses me about Islam is that the pacific practitioners, e.g. Suffi's, many Shias
and Sunnis are out of alignment, and hence are subject to violence from their coreligionists.
I happen to believe there are many wonderful people within the religion what I am saying is
that there is an elephant in the room, and it has a name: abrogation.
I'm going to use a smoke there is fire analogy using data.
If a religion launches repeated attacks against civilizations, then there is something
"in" the religion that is used for justification of said aggression. I'm of the opinion that
data matters, and you have to adjust your position to come into accord with real world
data.
Between 632 and 1922, Islam launched 548 offensive battles against classical
civilization
These attacks were often brutal, especially with rapes being used to "convert women"
rapidly.
In Islam (as in other religions as well) the Imam can turn knobs and get an output. This
means that abrogation is used to pick and choose verses depending on situation, to maneuver
the sheeple in the direction Imam's or political authority want them to go – including
offensive war. I used the term political authority on purpose, because Islam is more than
just a religion, it is a political-theocratic construct that is all-encompassing.
There may not be a specific verse allowing aggressive violence, but there is something
going on based on the data. (I admit to being a lay-man and not an expert on minutia of
Islam. I don't want to go there based on what I already know to be true.)
In Christianity, if there are calls for aggressive violence it is OUT OF ALIGNMENT because
of super-session. Christian adherents who do this are Judaizers, and have to use the old
testament for justification.
@Digital
Samizdat Who the heck is Lillith? Where did she come from? Adam's apple? At least Samael
is a step up from a talking snake. Talk about rewrite. Almost on par to the silly ones on the
daytime soaps. Oh wait . probably same writers.
@Rebel0007
"This won't end well."
-- They cannot help themselves. Two components make it impossible for the tribe to behave in
a preservation mode:
1. the victimhood complex, despite all the recently displayed data about Jewish murderous
ways in the host countries
2. the disproportionate number of psychopaths who are approved by tribal epos and mentality
Perhaps the only solution is to make the aggressive Jews become confined to their Jewish
country. Like an infectious disease that needs to be quarantined. Otherwise, the Jewish
psychopaths will continue leaching and destroying.
Not only the vulture bankers but a complete set of ziocons-infested stink-tanks should be
relocated (with their immediate families) to the Jewish State and prohibited from crossing
the Jewish State borders. Plus the limitations on their involvement in international commerce
and banking. Let the Jews be finally in Jerusalem today, not "next year." Let them enjoy the
company of other Jews.
Jew billionaire globalizer money-grubber Paul Singer has bought and paid for politician
puppet whore Marco Rubio.
JEWS ORGANIZED GLOBALLY(JOG) -- of which Paul Singer is a shady participant -- have plans
for after Trump and they involve the US Senators Marco Rubio and Josh Hawley and Tom Cotton
and others.
Paul Singer pushes mass legal immigration and mass illegal immigration. Paul Singer wants
to continue to use mass legal immigration and mass illegal immigration as demographic weapons
to attack and destroy the historic American nation.
Paul Singer wants to continue to use the US military as muscle to fight endless wars on
behalf of Israel.
I wrote this in February of 2019:
I just got reminded that Marco Rubio won a lot of the GOP billionaire Jew donor money away
from Jebby Bush in the 2016 GOP presidential primary because the Jew billionaires -- Paul
Singer in particular -- were not too thrilled with Jebby Bush's connection to James Baker.
James Baker was a factor in the Jew billionaire decision to back Marco Rubio.
George W Bush had dragged the American Empire into a war in Iraq on behalf of Israel and
the GOP Jew billionaire donors were still not convinced of Jebby Bush's slavish devotion to
Israel.
Marco Rubio signalled his willing whoredom to the ISRAEL FIRST foreign policy of endless
war on behalf of Israel in a way that left nothing to chance for the GOP Jew billionaire
donors.
Marco Rubio is nothing more than a filthy politician whore for the GOP Jew billionaire
donors who want to continue to use the US military as muscle to fight wars on behalf of
Israel.
New York Times article:
Mr. Rubio has aggressively embraced the cause of wealthy pro-Israel donors like Mr.
[Sheldon] Adelson, whom the senator is said to call frequently, and Mr. Singer, who both
serve on the board of the Republican Jewish Coalition, an umbrella group for Republican
Jewish donors and officials. Mr. Bush has been less attentive, in the view of some of these
donors: Last spring, he refused to freeze out his longtime family friend James A. Baker
III, the former secretary of state, after Mr. Baker spoke at the conference of a liberal
Jewish group.
The lobbying of Mr. Singer intensified in recent weeks as Mr. Bush's debate stumbles and
declining poll numbers drove many donors to consider Mr. Rubio anew. Last week, Mr. Bush's
campaign manager, Danny Diaz, and senior adviser, Sally Bradshaw, flew to New York to make
personal appeals on Mr. Bush's behalf, in the hopes of heading off an endorsement of Mr.
Rubio, according to two people close to the former governor's campaign.
This is a timely article for me as I have been pondering the relationship between Jews and
neoliberalism for some time now.
At university I studied under a brilliant Neo-Marxist professor who showed me some theory
and arguments that went a long way towards explaining how to make sense of the global power
structure. (Just a quick not for those who recoil at the mere mention of Neo-Marxist: the
academics that use a marxist lens as a tool to criticize the powerful are not all the cuckold
communist SJW types – some of these individuals are extremely intelligent and they make
very powerful arguments backed by loads of data.) One of the theories I was introduced to was
the notion of the Transnational Capitalist Class in this article called Towards A Global
Ruling Class? Globalization and the Transnational Capitalist Class:
http://media.library.ku.edu.tr/reserve/respring18/Intl313_ZOnis/3_Historical_Structuralism.pdf
The authors write the following:
Sklair's work goes the furthest in conceiving of the capitalist class as no longer
tied to territoriality
Inherent in the international concept is a system of nation-states that mediates relations
between classes and groups, including the notion of national capitals and national
bourgeoisi. Transnational, by contrast, denotes economic and related social, political, and
cultural processes – including class formation that supersede nation-states
What distinguishes the TCC from national or local capitalists is that it is involved
in globalized production and manages globalized circuits of accumulation that give it an
objective class existence and identity spatially and politically in the global system above
any local territories and polities.
Since reading your (Dr Joyce) work on the JQ I began to see the connection between age old
complaints of Jews, and what Ford referred to as "The International Jew". In fact, replace
the term "transnational capitalist class" from my passages quoted above (and many others) and
what you have is perfect mirror image of the argument.
This question has come up often lately, synchronistically (or maybe not). I'm somewhat new
to the JQ, having consumed many hours of work (including much of your own) after being sent
down the rabbit hole by the ongoing Epstein case. I was pondering that perhaps, Jews take the
blame for what the predatory capitalists are doing. Not even a week later you addressed this
precise question in your piece about Slavoj Ziszek and now with "vulture capitalism" it is
coming up yet again in Carlson's segment followed by the article right here. It also came up
on the "other side" in the blog I follow of a professor of globalization in this article:
https://zeroanthropology.net/2019/11/27/global-giants-american-empire-and-transnational-capital/
The link above is a review of the book Giants: The Global Power Elite . The review
provides a summary of the book which once again could be a text about Jews if one were to
replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is
the following: "Chapter 2, "The Global Financial Giants: The Central Core of Global
Capitalism," identifies the 17 global financial giants -- money management firms that control
more than one trillion dollars in capital. As these firms invest in each other, and many
smaller firms, the interlocked capital that they manage surpasses $41 trillion (which amounts
to about 16% of the world's total wealth). The 17 global financial giants are led by 199
directors. This chapter details how these financial giants have pushed for global
privatization of virtually everything, in order to stimulate growth to absorb excess capital.
The financial giants are supported by a wide array of institutions: "governments,
intelligence services, policymakers, universities, police forces, militaries, and corporate
media all work in support of their vital interests" (p. 60).
Chapter 3, "Managers: The Global Power Elite of the Financial Giants," largely consists of
the detailed profiles of the 199 financial managers just mentioned.
This caught my eye because I immediately wondered how many of those 199 directors are
Jewish. It also pertains directly to this exact article because I am confident that the
vulture capitalists you targeted here are profiled in the book, probably with many
others.
Now, I am not in the business of writing about the JQ, so I wanted to suggest to anyone
out there that is that if they were to obtain a copy of this book and determine how many of
the 199 directors are jews. What this could accomplish is a marriage of the major two
theories of the "anti-semites" (for lack of a better word) and the "Neo-Marxists". I would
argue that perhaps both sides would learn they are coming at the same thing from two
different angles. Most would ignore it, but maybe a few leftist thinkers would receive a much
needed electric shock if they were to see the JQ framed in marxist terms. Perhaps some
alliances could be forged across the cultural divide in this struggle. Personally I believe
that both angles are perfectly valid, and that understanding one without the other will
leaves far too much to be desired when studying the powerful.
@the
grand wazoo Reagan relaxed the laws on takeovers and as a result what Galbraith called the technostructure (modern
corporation in which the business was run by not with an eye on shareholder value but in the
interests of everyone involved) was ripped apart.
However the technostructure had come about in the 30s when the Depression led to mass lay
offs, which had began to cause social unrest. The Chinese are have already cutting a swath
through Western productive capacity, and now they are coming for the rest to the extent that
the European Union is tightening the limits of foreign direct investment and takeovers. Trump
is calling for negative interest rates, which were not adopted even during the 1930s when
one-quarter of the labor force was idle.
Prospects for severe economic pain being imposed on ordinary working people and the
consequent (eventual) establishment of a new technostructure are excellent. I hate to sound
like an accelerationist, but Jews like Singer are bringing that day closer.
@Ghali
'Everywhere they go, they leave behind nations in ruins. "
-- They always find the willing local collaborators ready to make a big profit. Who can
forget Dick Cheney, the Enemy of Humanity? The same kind of unrestricted criminality and
amorality lives on in Tony Blair the Pious. The fact that this Catholic weasel and major
criminal Tony Blair is still not excommunicated tells all we need to know about the
Vatican.
Assange is rotting in a prison, while Tony Blair and Ghislaine Maxwell are roaming free. The
Jewish connections pay off.
I know some Torah Jews who are angry that Mischlings have no right of return to Israel,
and apparently now aren't part of the ruling American Jewish nation, or American, or have
anywhere to go now. They're also angry at what they see as a repeat of the cycle of
international Jewish action and inevitable reaction they will have to bear the brunt of.
They referred me to this website: The Institute for Historical Review where they
apparently contribute.
" Although Jews make up no more than three or four percent of Russia's population, they
wield enormous economic and political power in that vast and troubled country. "At least half
of the powerful 'oligarchs' who control a significant percentage of the economy are Jewish,"
the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New
Russia," May-June 1997 Journal, pp. 21-27. )"
So that was the context of who owned capital in Russia, what was the effect?
" According to Harvard University scholar Graham Allison, who is also a former US
assistant Secretary of Defense, ordinary Russians have experienced, on average, a 75 percent
plunge in living standards since 1991 -- almost twice the decline in Americans' income during
the Great Depression of the 1930s. But in the midst of this widespread economic misery, a
small minority has grown fabulously wealthy since the end of the Soviet era ."
But how is that possible? Swashbuckling international capitalists like Bill Browder were
bringing their Ivy League MBA's to more efficiently manage all those assets. And he said how
much he wanted to save the Polish Train-yards.
What happened? A Putin arose. He took the capital from the Jews, and the Jews were
dispatched to the United States. Putin also aligned himself with a different Jewish faction
less virulently dismissive of the needs of the people they ruled.
What do they do in the United States? Something similar as the economy careens towards
another financial crisis and living standards, mortality rates, and the middle class
plummet.
"Jewish power in Russia, Galushin continues, has resulted in millions of homeless
children, widespread tuberculosis and cholera, a shortage of medicines, cheating retirees of
their pensions, suicide in the armed forces, and the death of science. What do the Gusinskys,
the Berezovskys, the Chubais, the Nemtsovs, the Kiriyenkos, the Smolenskys, the Livshits, and
the Gaidars say about this? Millions of Russians have perished under their rule. Are the
Russian people ready to judge these scoundrels for their crimes, Galushin ask",
Robert Maxwell was a Chezch Jew – he also robbed hundreds of millions worth of
pensions. How is it possible that all these Jewish capitalists can be linked to readily to
Jeffrey Epstein?
How did Robert Maxwell get his seed money?
Here is a letter sent to Boris Berezovsky nee Abramovich.
"In sharp contrast to the intense feelings expressed by such Russian writers over the
catastrophic situation in their country today is the seeming indifference of American and
German taxpayers who have unwittingly channeled billions of dollars and marks to the
oligarchs -- who in turn have transferred this largesse to secret Swiss accounts. Who
monitors the distribution of these billions through the World Bank, the IMF, the financial
houses, and various banks? Who is responsible for this terrible injustice?"
That's really strange, because isn't that what the Russians accused Browder of doing? They
say that he channelled billions of dollars out of Russia into the United States. Then we had
the great Russian menace that is still ongoing in the media, and failing.
But Browder said that the Russian collusion story that was created by Fusion GPS, and then
the FISA court warrants issued on the basis of the fabricated Steele 'pissgate' dossier and
media stories was 100% true.
And Steele worked for the Russia desk of British Intelligence, and was being paid by the
Democrats.
Even the proto-Shabbos goys at the National Review had to distance themselves from it.
They showed that the date the FBI and Justice said it was verified it couldn't possibly have
been verified.
So why did so many Jewish capitalists like Browder support it?
And why aren't the Russians being permitted to trace Russian monies into Cyprus if Bill
Browder and now Jewish captialist ever has every done a thing that is wrong?
Because literally to the letter what is said about Donald Trump, the Democrats were
actually doing.
"" It got almost no attention, but in May [2018], CNN reported that Sens. Robert
Menendez (D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to
Ukraine's prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four
investigations they said were critical to the Mueller probe. In the letter, they implied that
their support for U.S. assistance to Ukraine was at stake. Describing themselves as "strong
advocates for a robust and close relationship with Ukraine," the Democratic senators
declared, "We have supported [the] capacity-building process and are disappointed that some
in Kyiv appear to have cast aside these [democratic] principles to avoid the ire of President
Trump," before demanding Lutsenko "reverse course and halt any efforts to impede cooperation
with this important investigation ."
And yet Trump pulls the Jews ever closer. A ruling race of ubermenschen now.
'No reason'.
Can you imagine what American Blacks and savage Hispanics let alone whites are going to do
if the US economy craters like the Russian economy, and everything is transferred to the
banks?
@Old
and grumpy Yeah . fine idea. I've always maintained there are two uses of the word
"capitalism" industrial capitalism or competition of ideas vs. financial capitalism, the
Darwinian struggle for the most ruthless bankster to rig the "markets" most efficiently.
Whether we give it new terminology I don't care much . but I sure wish people would
understand the difference, one way of another !
Trump and the Republican Party puppets are nothing more than nasty politician whores for
billionaire Jews such as Seth Klarman and Paul Singer and Shelly Adelson and Les Wexner and
Bernie Marcus and many other money-grubber Jew donors.
The Republican Party Jew donors want to continue to flood the USA with mass legal
immigration and mass illegal immigration and the Jew donors want to continue to use the US
military as muscle to fight unnecessary wars and endless wars on behalf of Israel.
The Republican Party Jew donors also want to have all their shady money-grubber scams
protected by the Republican Party politician whores.
I wrote this in October of 2017 about Seth Klarman and Puerto Rican government debt:
Puerto Rico must be allowed to go belly up. The bond owners who own Puerto Rican debt must
go tits up. The US government must not bail out the investors who purchased Puerto Rican
government debt, or any debt whatsoever connected to Puerto Rico. Seth Klarman has been
revealed as a person who has bought Puerto Rican bonds in hopes of cashing out big.
SETH KLARMAN must be given a salt shaker to sprinkle salt on his worthless Puerto Rican
bonds before he eats them. Klarman must lose 100 cents on the dollar for his greedy purchase
of Puerto Rican debt. Klarman has loads of loot, and the Puerto Rican government debt was
purchased for one of his funds. I am sure his investors won't mind getting soaked by Seth for
a bit of money -- it is not even a whole billion dollars, only close to it.
David Dayen says:
Klarman, who has been described as the Oracle of Boston, has a history of buying
unpopular or distressed assets on the cheap in hopes of a payday. Baupost manages over $30
billion in assets. He is known as the top campaign contributor in New England and has been
a major donor in Republican politics in Massachusetts, including largely secret support for
2016's Question 2, an ultimately unsuccessful effort to lift a state cap on charter
schools. Klarman supported Hillary Clinton in 2016, calling Donald Trump "completely
unqualified for the highest office in the land."
Klarman's involvement in Puerto Rican debt will surely come as a surprise to activists
in Massachusetts and Puerto Rico, who have never mentioned him among the "vultures" who are
causing undue pain for the island's U.S. citizens.
Jewish people have treated me better than my own White Euro family.
White Euro people are/were evolved for small tribes. They were hunter gatherers, and
evolved concurrently with dogs. In my opinion the pathological altrusim of whites has to do
with the close relations to dogs, pets and later livestock. The whole "good shepherd" is more
of a Western Construct of Cro-Magnon white people, than the insular goat-herding types of the
middle east.
For example, in Scandinavia and most white countries, a 'baby sitter' can be a neighbor,
while in middle eastern cultures, a baby sitter can only be from a family member.
In other words, white people extend trust to one another, while middle-eastern ethos is
more familal then tribal. Ice age evolution, especially the fourth ice ages, selected for
pathological altruism is whites; which is why whites extend their grace to foreigners, brown
people, and are easily duped by Jews.
All you can do is try to rise above your own families failings. White people have to think
it through intellectually, as it does not come naturally.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them
out . and so their charity is within the tribe, but there is no charity within the tribe
among Whites.
Yes, but what is being debated here is how Jews use their ethnocentrism and in-group
methods to practice usury against out-groups. Euro-whites are a perfect host for the
parasite. The parasitical methods EVOLVED over millenia to operate the usury mechanism, to
take rents and unearned income. This is why they have been kicked out of 109 countries,
because what they do is seen as immoral and against the common good. (Euro whites eventually
smarten up and it always takes a King to eject the Jews.)
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New
York where they were being befriended by a Jewish family.
Let's not get cause and effect reversed. The potato famine in Ireland was devastating
because high-value crops were being exported to England to pay for wait for it . usury on
debts the Irish owed the English. The English in turn were operating the state sponsored
usury system of the Bank of England, which came into being in 1694. The BOE in turn was
JEWISH in construct, being maneuvered into place by Sephardic Jews from Amsterdam.
The Irish, being trusting souls, fell into the usury trap and could not keep up with the
exponential debts.
A general statement: White people can build high trust civilizations that benefit all of
their people, but are easily subverted when the wrong type of predators infiltrate. If your
family was extended, and had aunts and uncles and cousins, who lived in the general area for
centuries, then there would be a network to fall back on.
See slaughter of the cities by Jones:
And yes, the FIRE sector and impetus behind the destruction of your extended family was
JEWISH. The breakdown of neighborhoods and ethnics was on purpose.
The Jew is anti-logos, and whatever he touches he destroys. (There are exceptions of
course – but these people no longer possess a negative Jewish spirit.)
Sorry your family was destroyed. When whites become un-moored they don't know how to
act.
@J
Adleman Quite bizarre post. First,he makes a half ass defense of Jew
character.(Weinstein,Epstein don't represent jews! Well,they kind of do. Any jew who is
called to accounts for his crimes automatically does not represent jews!
You are a used condom. Do you represent the jews? Id day yes.)
Your diatribe sounds like an alt righter's view of jews. Are you real?
if you think it's wrong to buy or try to collect on defaulted debt, what is the
alternative set of laws and behavior you are recommending? If debts can simply be
repudiated at will, capitalism cannot function.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad
investors should be punished and good investors rewarded. Resources should be well allocated.
Otherwise it's not capitalism.
These insane Boomers seem to think that there is a Jewish coup underway to remove Trump
because of all the things that Jews are saying in Jewish publications and every single person
involved being Jewish and stuff.
@Germanicus
About the Carnegie donated "Peace Palace" in The Hague, presently the seat of the In
ternational Court of Justice:
Germanicus claims:
They are a function of Empire in Hague, who protect empire criminals, and assume a non
existent legitimacy and jurisdiction as a private entity to take down empire opponents.
Such as this ruling for instance:
Guardian 3 Oct.2018:
International court of justice orders US to lift new Iran sanctions
Mike Pompeo indicates US will ignore ruling, after judges in The Hague find unanimously in
favour of Iran
@silviosilver
"What Joyce regards as a defect of "vulture" funds, others might regard as an benefit. "
-- Of course. I hope you did not miss the fact that the Jewish vulture funds -- ruthless,
unethical, and leaching on goyim -- contribute to the Jewish Holocaust Museum.
Is not it touching that the same bloody destroyers of nations demand from the same nations a
very special reverence -- out of ethical considerations, of course -- towards the Jewish
victims of WWII? But only Jewish victims. All others were not victims but casualties. See
Iraq, Syria, Libya, and Ukraine. See the unlimited hatred of ziocons towards Russia.
@Anonymous" but maybe a few leftist thinkers would receive a much needed electric shock if they were
to see the JQ framed in marxist terms " – I would not count on the effect of the
electric shock on the leftist thinkers. The role of Jewish Bolsheviks in the Cheka, NKVD,
GULAGs, genocides by famine has been known from the very beginning and yet it left no impact
on the leftist thinkers.
"According to Harvard University scholar Graham Allison, who is also a former US
assistant Secretary of Defense, ordinary Russians have experienced, on average, a 75 percent
plunge in living standards since 1991 -- almost twice the decline in Americans' income during
the Great Depression of the 1930s. But in the midst of this widespread economic misery, a
small minority has grown fabulously wealthy since the end of the Soviet era."
"Although Jews make up no more than three or four percent of Russia's population, they
wield enormous economic and political power in that vast and troubled country. "At least half
of the powerful 'oligarchs' who control a significant percentage of the economy are Jewish,"
the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New
Russia," May-June 1997 Journal, pp. 21-27.)"
It's interesting how the appeal of Eduard Topol to Jews in Russia is now starting to echo
Jewish calls in the United States for Jews to stop the path they are currently on.
Here is the complete text of Topol's extraordinary "Open Letter to Berezovksy,
Gusinsky, Smolensky, Khodorkovsky and other Oligarchs," translated for the Journal by Daniel
Michaels from the text published in the respected Moscow paper Argumenty i Fakty ("Arguments
and Facts"), No. 38, September 1998:
Magnitsky and Bill Browder is also really interesting.
It turns out that a large measure of the Russiagate story arose because Russian lawyer
Natalia Veselnitskaya, who traveled to America to challenge Browder's account, arranged a
meeting with Donald Trump Jr. and other Trump campaign advisers in June 2016 to present this
other side of the story.
Then we had Democrats actually literally word for word doing what they accuse Trump of
doing in Ukraine.
"It got almost no attention, but in May [2018], CNN reported that Sens. Robert Menendez
(D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to Ukraine's
prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four investigations
they said were critical to the Mueller probe. In the letter, they implied that their support
for U.S. assistance to Ukraine was at stake. Describing themselves as "strong advocates for a
robust and close relationship with Ukraine," the Democratic senators declared, "We have
supported [the] capacity-building process and are disappointed that some in Kyiv appear to
have cast aside these [democratic] principles to avoid the ire of President Trump," before
demanding Lutsenko "reverse course and halt any efforts to impede cooperation with this
important investigation."
What's the first rule of Communist and Satanist Saul Alinsky? Always accuse your opponents
of what you are doing.
Imagine having a Grandfather as the literal Chairman of the American Communist Party, and
all the amazing lessons you would learn about political maneuvering and ideology.
And it's amazing.
Browder's story is that Russian officials stole his companies seals and then fraudulently
formulated a tax avoidance scheme with a complete paper trail that they fabricated against
him in totem. Precisely matching the amount of money he was trying to remove from their
country, like those other Jewish Oligarchs who imposed conditions that were multiples worse
then even the American depression.
When under oath it turns out that Magnitsky wasn't even a lawyer at all, and didn't go to
law school. Why did the media owned by Mormons of course keep saying that Magnitsky was
Browder's lawyer?
Why did the Russians fraudulently fabricate a paper-trail for another Jewish Oligarch to
steal money out of Russia? Just like they colluded with Trump when a Russian lawyer sought to
explain what happened. Because that totally happened.
Maybe the problem isn't Capitalism. Maybe, when even the ur-Shabbos goys at National
Review are shaking their head and washing their hands like Pilate, maybe it's a different
problem.
Yet Trump holds these people ever close to his beating heart.
And then there are all these connections to Jeffrey Epstein that are like an explosion
linking all these people.
Poor old Russia. Even Putin isn't worse then what came before.
The link above is a review of the book Giants: The Global Power Elite. The review
provides a summary of the book which once again could be a text about Jews if one were to
replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is
the following: "Chapter 2, "The Global Financial Giants: The Central Core of Global
Capitalism," identifies the 17 global financial giants -- money management firms that
control more than one trillion dollars in capital.
From the review .
"Robinson's claim that nation-states have become, "little more than population containment
zones," while "the real power lies with the decision makers who control global capital" (p.
26). Both propositions are unconvincing: first, populations are clearly not being
contained; second, if states matter so little, and the real decision-makers are global
capitalists, then why do the latter need states
That is such stupid reasoning it blows the mind. He is trying to shift the global problem
to institutions .. instead of the people who head those institutions
Institutions, agencies , financial firms, etc .are ALL run by PEOPLE .who make the
policies,laws, take the actions.
Why does the 'transnational capitalist class' need states? well duh because
people/labor/consumers are indeed "contained' in states subject to the states laws and
system. The transnational capitalist class created the institutions he speaks of 'from
within' those states thru their control of its system and their same goal partners who do the
same from within their respective states.
That the capitalist class is not tied to any territory has been observable since 1960.
I don't have time now to look up how many of 199 directors are Jews . but I know enough of
the economic history of various countries to know that Jews were the first business and
finance globe trotters,,,,.from Spain to Amsterdam, France to Africa , etc.etc. Jew were
first hired as reps and facilitators by the gentile business owners especially because of
their breather tribal contacts in many countries ..that was their stepping stone to becoming
transnational capitalist themselves.
Understanding our global capitalist ruling elite and who they are is not rocket
science
Buy your loans from another lender,
change the terms (add fees, penalties, underhanded stuff),
reposses your collatteral.
Outta be illegal.
White Gentiles, you must infiltrate and take over big business and big finance to help
protect your people from predation .and to give all peoples principled, fair financial
services. To help our society, and even others. Paul Singer doesnt seem to care about most of
his fellow men. We could do better, and help the world be a better place.
Yet more evidence is piling up that Donald J Trump is the Great Betrayer.
A man who had the biggest mandate in post war history to clean up the Swamp that is D.C.,
reform Immigration to save America and reform the economy for American workers.
He has squandered all of it while pandering to Jews.
When the Donald is revealed as the Great Betrayer where will Jews run? Yes, they have
several back up plans. Patagonia, Ukraine and Israel.
Imagine that. They have their own country and 2 back up plans. It is really tough being a
hated, oppressed minority.
@Anonymous
Thanks for your comment. You've come to the right place. Unz is an ideal hangout for
left/right fusionists who don't fit in perfectly with either side, but are interested in
hearing from both. In addition, if you're looking for other good right-wing sites that aren't
libertarian, Zionist or overly Christian, I can also heartily recommend Dr. Kevin MacDonald's
Occidental Observer ,
where Dr. Joyce himself usually posts.
What this could accomplish is a marriage of the major two theories of the "anti-semites"
(for lack of a better word) and the "Neo-Marxists". I would argue that perhaps both sides
would learn they are coming at the same thing from two different angles. Most would ignore
it, but maybe a few leftist thinkers would receive a much needed electric shock if they
were to see the JQ framed in marxist terms.
Or, more correctly, it would be a re -marriage of anti-Semitism and Marxism. If you
have a background in Marxism yourself, maybe you recall reading or hearing about Karl Marx's
pre-Kapital classic, On the Jewish Question , where he basically identifies
finance-capitalism as a Jewish phenomenon in essence and origin. Money quote
:
"Let us consider the actual, worldly Jew – not the Sabbath Jew but the everyday
Jew. Let us not look for the secret of the Jew in his religion, but let us look for the
secret of his religion in the real Jew. What is the secular basis of Judaism? Practical
need, self-interest. What is the worldly religion of the Jew? Huckstering. What is his
worldly God? Money. Money is the jealous god of Israel, in face of which no other god may
exist. Money degrades all the gods of man – and turns them into commodities . The
bill of exchange is the real god of the Jew. His god is only an illusory bill of exchange .
The chimerical nationality of the Jew is the nationality of the merchant, of the man of
money in general.[ ] The Jew has emancipated himself in a Jewish manner, not only because
he has acquired financial power, but also because, through him and also apart from him,
money has become a world power and the practical Jewish spirit has become the practical
spirit of the Christian nations. The Jews have emancipated themselves insofar as the
Christians have become Jews. [ ] In the final analysis, the emancipation of the Jews is the
emancipation of mankind from Judaism."
Marx himself, of course, came from a family of rich conversos, so he knew whereof he
spoke.
Perhaps some alliances could be forged across the cultural divide in this struggle.
Personally I believe that both angles are perfectly valid, and that understanding one
without the other will leaves far too much to be desired when studying the powerful.
As a third-way national socialist, I hope so, too. Libertarianism/capitalism and mainline
socialism are dead-ends, having both been thoroughly co-opted (founded?) by the Jews. Both
fail to address the pink elephant in the corner; both put some hopelessly abstract ideology
before the welfare of my people–while benefiting another. And so, as the original NS
used to say: 'Neither godless Bolshevism nor soulless capitalism!'
Reality: Contrary to popular mythology, not all serial killers are white. Serial killers
span all racial and ethnic groups in the U.S. The racial diversity of serial killers
generally mirrors that of the overall U.S. population. There are well documented cases of
African-American, Latino and Asian-American serial killers. African-Americans comprise the
largest racial minority group among serial killers, representing approximately 20 percent of
the total. Significantly, however, only white, and normally male, serial killers such as
Ted Bundy become popular culture icons.
@Lot
Your defense of bond holders do not hold water. They agreed to take the risk at the given
price. If the debtor can't pay back, they have the eat the losses, period. Usury law needs to
be put in place to outlaw these vulture funds. Then the bond funds will adjust by demanding
better terms that truly reflects the risk from the get go, and the debtors will adjust by
being much more cautious in their borrowing since the borrowing cost is so high.
Instead, this current arrangement basically uses bond funds to put up a false front,
telling a debtor they can borrow at 2% when the real rate should be at 20% given the known
risks, then the debtor goes crazy borrowing because it's so cheap to borrow, and when they
can't pay back, the bond gets sold to the vultures who come collecting at 20% or they seize
assets. This is no different than the subprime mortgage crap, except now that is regulated so
they go after sovereign debt and corporate debt instead. These vultures need to go die
period.
Trump is now essentially funded by three Jews -- Singer, Bernard Marcus, and Sheldon
Adelson, together accounting for over $250 million in pro-Trump political money. In return,
they want war with Iran.
Hmm -- The day after Trump in inaugurated for his second term -- will Iran be in his
crosshairs?
@Jimmy1969
This is a great, concise overview of Canadian media influence by the "silent" Jewish
overlords via Golden Tree.
I tried copy/paste of your comment on CBC, but it did NOT last 2minutes before being
suspended!!
I am sorry to have used your comment without your permission, but I am going to "misspell"
some words to defeat the algorithm to get your message across.
@Lot
For points 1 and 2, I think that you would learn a lot from reading his previous article (
https://www.theoccidentalobserver.net/2015/08/01/paul-singer-and-universality-of-anti-semitism/
) on vulture capitalism. It is not just that they are recovering assets from defaults. These
vulture groups will use the courts to increase the size of the debts and sue for extra "fees"
on top, even when all other lenders are against it. They typically manage to get US courts in
NYC to try these cases, which also is apparently abnormal (apparently it would be more normal
to use international courts). This is what Joyce refers to here:
"This type of predation is so pernicious and morally perverse that both the Belgian and UK
governments have taken steps to ban these Jewish firms from using their court systems to sue
for distressed debt owed by poor nations. "
These funds do not do something that normal investors do, especially not to the bonds of
governments of struggling third-world countries.
As for 3, you are misunderstanding. Joyce never demanded that they name their charities
anything in particular, but it is obviously the case that your typical normie thinks that
"white males," presumably golf-playing Episcopalians or something, are the ones running
finance, and these golfy-sounding names (Elliot, Monarch, GoldTree, OakTree, Canyon, Tilden
Park) fit the perception. We whites receive the society's hate for the wealth disparities
created by high finance.
4. No, it is not difficult to do finance differently. Every other investor has higher
patience for poor countries in Central America and Africa, and they all look at Elliot with
confused scorn.
And, things would probably run fine without hyper-aggressive multi-billionaires in pushing
the courts to f- over those who default on debts they owe to the maximum degree. Japan and
Norway do quite fine with businesses that are run by gentle and humble goys who feel ashamed
at the thought of getting "too rich."
@J
Adleman You will be thrown out.
You will have to choose between Israel, Ukraine and Patagonia. No one else will take you.
You have destroyed our politics, media and economy.
You are not respected.
You buy compliance with money.
You have bankrupted the U.S. dollar with debt pursuing Israel's enemies.
Do any of you goys remember when the Jewish funded Democrats through the US State
department gave Russia one third of the US strategic uranium reserve and also funnelled
military tech to Russia's Skolkovo Valley? At a time when they were working on the Hypersonic
ballistic missile engine?
It's almost like there was this plan for people to move back into Russia, just like China,
but for some reason the Russians and Chinese didn't cooperate.
Remember when David Spengler wrote about this a few years back hence?
Do you think disloyal Jews had anything to do with 18 American CIA assets getting captured
and murdered by the Chinese Intelligence services through 2010 to 2012?
Could it be that there were loyal Americans who were interfering with Chinese pay for play
with the Jewish nation in the United States? Or might have come upon it?
Imagine being an American military service member knowing that your Jewish commanders and
Jewish senior officers have got your back.
It's amazing isn't it.
Clinton was receiving tens of millions of dollars from Skolkovo Valley Syndicate owners in
Russia, and in exchange all she gave them were military secrets that may have given Russia
for example it's lead in hypersonic military technology.
And then we're told China had a duplicate version of her emails in China, in exchange for
what?
US Taxpayer money funded the Russian weapons program.
How much China tech was also funded by US taxpayers?
And then these people accused Trump of collusion with Russia, because the Russians were
telling the Trump family that the Magnitsky Act was unjust because the Russians were trying
to secure their assets against the kind of predatory practices that lowered Russian mortality
to where it's headed in the Midwest. Right now. For the same reasons.
Yeah – this trend is absolutely going to be permitted to continue.
The American nation forewarned and forearmed is simply going to allow itself to go the way
of the Russian Slav under a century of Jewish and proto-Jewish (the man who was made to call
himself Stalin) leadership.
Maybe, just maybe, an American President might consider a Magnitsky Act the subjects of
which were different. Maybe Trump is the last civic-nationalist President, maybe.
Look at how loyal the ruling nation in the United States is to their fellow Americans.
There aren't enough hours in the day to trace the labyrinthine set of Jewish betrayals and
asset transferrals – remember the Panama Papers? Remember the Samson Option?
Why won't Browder let the Russians investigate Cyprus?
Maybe good old fashioned local corruption with noblesse oblige is preferable to this
international corruption.
The Jews got out-leveraged by the Russians, and now, finally, the Empire might be able to
take back Korriban from the Jewdi.
Of course that's impossible. You have to trade one for the other. Just one set for the
other set.
If you want to find a list of these capitalists – you just look at who attends the
World Jewish Congress Galas.
" Ira Rennert (net worth $3 billion, previously, $6 billion, investor, known as a "junk
bond billionaire," found guilty of corruption in 2015, placed a mill in Baltimore's outer
harbor into bankruptcy, causing more than 2,000 workers to lose their jobs, owes Baltimore $8
million in unpaid city water bills, allegedly used money he looted from his business to build
a 29-room mansion & compound – a garage holds 100 cars)
Dick Parsons (former Time Warner CEO, CBS chair, & Citibank chair; in 2012 shareholders
filed a lawsuit against Parsons and some other executives for "stuffing their pockets while
running the bank into the ground")
Ben Ashkenazy (net worth $4 billion, Israeli American real estate tycoon, a benefactor of the
2015 AIPAC Real Estate Luncheon at New York's Grand Hyatt Hotel)
Jack Chehebar (real estate mogul, sued for alleged breach of contract, accused of beating his
son)
Ray Kelly (longest serving commissioner in the history of the New York City Police
Department, for a period was an Interpol vice president, charged by Muslim groups of
discrimination: "The commissioner oversaw a spying program that targeted Muslims based solely
on their religion, showed poor judgment by participating in a virulently anti-Islamic film,
and approved a report on terrorism that equated innocuous behavior such as quitting smoking
with signs of radicalization."
What did God say once?
In Genesis 18:32 He said he would spare Sodom and Gamorrah if Abraham could find just 10
honourable men. He couldn't find them. Only the family of Lot.
There isn't much time left. It might simply be the case that the rot goes too deep and too
dark.
Valhalla is a worthy place. I think there might be some Russians there, along with the
souls of those 18 Americans who were tortured and murdered in China for reasons unknown.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad
investors should be punished and good investors rewarded. Resources should be well
allocated. Otherwise it's not capitalism.
There are different kinds of capitalism. It is part of today's hypnotism that people don't
know the different types.
For example, there is finance capitalism, industrial capitalism, and what Andrew Joyce
calls vulture capitalism.
Vulture capitalism is a subset of finance capitalism.
Industrial capitalism was invented in the American colonies, especially Massachusetts bay.
The American system of economy (industrial capitalism with mixed economy and sovereign money)
has since been lost to America, as it imported Jewish/British finance capitalism as the
operating construct after 1913.
You can separate risks in lending. That is more hypnosis that you have been imbibing on.
The entire corpus of Classical economics goes about trying to separate unearned from earned
income, how to tax properly, what is site value, and it also is able to separate risk
types.
The fact that you do not know these things is not surprising, as most of western man is
living inside of a Jewish inverted reality bubble. The agents of mammon won, and classical
economics is not even taught in university.
Homosexuality is present in our society, but doesn't register much in demographics and as
such, I am happy to call gays as homosexuals. Tackling animus towards homosexuals requires
NOT trying to enforce new nomenclature of gender etc., otherwise an unexpected nasty backlash
can occur. Within your "ingroup", you can say what you like, but do not try and force ingroup
dynamics on the majority that are not interested.
Otherwise, you are behaving by identity politics, just like the Jews force their identity
upon the majority.
@sally
" Time after time I have asked my Jewish friends are you are Zionist, and most say they do
not really know what Zionism is? "
Zionism is a name which is more well known as an identifier by the critical (among the
Goy), carrying by now negative connotations. Broadly it is not an ism which is well known to
the man in the street. It could well be that among Jews, the name Zionism is only handled by
certain groups.
The question should have been rephrased asking what position these Jewish friends take with
regard to Israel. It comes down roughly to the same thing.
To not know of Zionism might be strategically a good thing, it refers to convergent
interests, actually a power block, you don't want to throw around such things, it could make
people aware Keep it diluted, diversity, obfuscation.
Ben Franklin and the American revolution was almost put in a similar pinch by the Amsterdam
banker Jean DeNeufville. In a letter to John Adams, 14 December 1781*, Franklin explained
that DeNeufville wanted as security for a loan "all the lands, cities, territories, and
possessions of the said Thirteen States, which they may have or possess at present, and which
they may have or possess in the future, with all their income, revenue, and produce, until
the entire payment of this loan and the interests due thereon."
Franklin considered that "extravagant" but Newhouse rejoined, "this was usual in all loans
and that the money could not otherwise be obtained". Franklin retold in this lengthy letter,
"Besides this, I was led to understand that it would be very agreeable to these gentlemen if,
in acknowledgment of their zeal for our cause and great services in procuring this loan, they
would be made by some law of Congress the general consignee of America, to receive and sell
upon commission, by themselves and correspondents in the different ports and nations, all the
produce of America that should be sent by our merchants to Europe."
Talk about shooting the moon
While Wikipedia says DeNeufville was Mennonite, Franklin concluded with this colorful --
and bitter -- remark , "By this time, I fancy, your Excellency is satisfied that I was wrong
in supposing John de Neufville as much a Jew as any in Jerusalem, since Jacob was not content
with any per cents, but took the whole of his brother Esau's birthright, and his posterity
did the same by the Canaanites, and cut their throats into the bargain; which, in my
conscience, I do not think Mr. John de Neufville has the least inclination to do by us while
he can get any thing by our being alive. I am, with the greatest esteem, etc., ✪ B.
Franklin."
Perhaps it was just an expression based on an earlier stereotype?
*Bigelow, 1904. The Works of Benjamin Franklin, Vol. 9 Letters and Misc. Writings
What our Jewish friends have done to Argentina, through maneuvering the elections, killing
dissidents, and marking territory, is a cautionary tale to anybody woke enough to see with
their own eyes.
Zion had the opportunity to go to Uganda and Ugandans were willing, but NO Zion had to
have Palestine, and they got it through war, deception, and murder. It was funded by usury,
as stolen purchasing power from the Goyim.
The fake country of Israel, is not the biblical Israel, and it came into being by
maneuverings of satanic men determined to get their way no matter what, and is supported by
continuous deception. Even today's Hebrew is resurrected from a dead language, and is fake.
Many fake Jews (who have no blood lineage to Abraham), a fake country, and fake language.
These fakers, usurers, and thieves do indeed have their eyes set on Patagonia, what they call
the practical country.
Unz is an ideal hangout for left/right fusionists who don't fit in perfectly with either
side, but are interested in hearing from both
You just described me to a tee. I defy categorization, especially ideological ones
(although I half jokingly refer to myself as a free-thinkist), and I feel this makes me
weird.
I've been to TOO. However I can't bring myself to start commenting on a white nationalist
website. I will admit I am unable to articulate this discomfort presently.
As to your point about Marx – I actually forgot about his work on the JQ. The Saker,
who is a columnist on this site, referenced Marx's essay on the JQ some time ago. I must have
not read the whole thing or I'd have remembered it. I didn't know that Marxism originated
with anti-Semitism, but that is fascinating. I have encountered some Marxists in my time and
they focus exclusively (predictably) on the cis-white-male patriarchy, or whatever occupies
their brainwashed minds after an Introduction to Gender Studies class.
@Anon
"If debts can simply be repudiated at will, capitalism cannot function."
Is this children's capitalist theory class time? throwing around some simple slogans for a
susceptible congregation of future believers?
Should be quite obvious that people, groups of people, if not whole nations , can be
forced and or seduced into depths by means of certain practices. There are a thousand ways of
such trickery and thievery, these are not in the theory books though. In these books things
all match and work out wonderfully rationally
Then capitalism cannot function? Unfortunately it has become already dysfunctional, if not
a big rotten cancer.
Isaiah 1:4 4 Alas, sinful nation, A people laden with iniquity, A brood of evildoers,
Children who are corrupters! They have forsaken the LORD, They have provoked to anger The
Holy One of Israel, They have turned away backward.
Ezekiel 21:25 25 'Now to you, O profane, wicked prince of Israel, whose day has come, whose
iniquity shall end
Jeremiah 5:9 Shall I not punish them for these things?" says the LORD. "And shall I not
avenge Myself on such a nation as this?
As Jesus said which of the prophets have you not killed or persecuted? The truth hurts. As
for me I do not hate Jews ..I feel terribly sad for a people that are capable of greatness
and squandered the gifts given to them by God. Are you a holy nation? Don't make me laugh.
Repent. Your time is coming. No more running and hiding. Deception will no longer save you
only acceptance of the Messiah.
Hey! Don't mention anything a Jew ever did, especially usury, or else the entire cult will go
up in a holocaustal mushroom cloud of emo nasal whining. In Judaism you've got a fanatical
sect that systematically selects and brainwashes its members to inculcate extreme values of
two Big Five personality axes: high neuroticism and low intellect (where intellect means
open-mindedness.) Note the existential crisis triggered by a straightforward lecture from The
Society for the Study of Unbelievably Obvious Shit.
Of course Israel is holocausting the Palestinians. This is what happens when the founding
myth of a nation is, We wiped em all out and then they wiped us almost all out so now we
gotta wipe em all out etc., etc., etc.
Well, the only difference between a narcissist and a psychopath is that the former need
people to like them whereas psychopaths genuinely could not care less (although they learn
early that acting as if they do can be very helpful , as can always trying to elicit sympathy
etc).
As I noticed while reading a few books on psychopathy (I was inspired to after reading Steve
Job's biography) – their whole 'culture' is structured as a (collective )
PSYCHOPATH.
It seems that (collectively) they cannot care about others even if they wanted to. Due to
their sickness
I am not saying they are all that way – but overall their 'culture' seems to be that
way
@Digital
Samizdat Indeed I cannot agree more. I quote from a 1923 interview of Hitler:
"Why," I asked Hitler, "do you call yourself a National Socialist, since your party
programme is the very antithesis of that commonly accredited to socialism?"
"Socialism," he retorted, putting down his cup of tea, pugnaciously, "is the science of
dealing with the common weal. Communism is not Socialism. Marxism is not Socialism. The
Marxians have stolen the term and confused its meaning. I shall take Socialism away from
the Socialists.
"Socialism is an ancient Aryan, Germanic institution. Our German ancestors held certain
lands in common. They cultivated the idea of the common weal. Marxism has no right to
disguise itself as socialism. Socialism, unlike Marxism, does not repudiate private
property. Unlike Marxism, it involves no negation of personality, and unlike Marxism, it is
patriotic.
@Colin
Wright The Sacklers occupy a hoity-toity rung in the philanthropy universe, as they have
given enough $$$ to Harvard for H to paste their name on its museum housing I believe its
whole Asian art collection. Students have now protested Harvard's high-profile gift of
probity and cultural status to the Sacklers via, literally, an "Aushangerschild" on a major
university museum. Harvard protests back: Jeez, if we don't take the Sacklers' dough we might
be obliged to stop taking the dough from Exxon, etc.
@Anon
you are right about repaying the loan
but Banksters have managed over decades I think starting with Clinton to remove protection
laws (which were stating how much interest was the maximum a bankster could charge his pray
etc). They also removed the rules of how much was the maximum they could lend (according to
how much their victim makes a year etc).
So even though you are right that loans should be repaid – it is immoral to allow a
well connected mafia to change all the laws and remove protections while pushing up prices of
everything because it suits the lender (who has a licence to print).
They basically lend money that does not exist and get interest for that. So the more sheeple
are tricked into borrowing the better for them, but the worse for everyone else
They should not be allowed to bribe politicians to remove all the protection that was there
since 1920s I think.
It's a marriage from hell: easy to bribe Anglosheep meets the masters of predatory bribing
who own the printing press
That stupid cuck Trump just got impeached by the House. Thats a good lesson to everybody
how much good Jew-ass kissing does for you .you get stabbed in the back anyway lol
Couldn't have happened to a more deserving and treacherous scumbag!
But he should have been impeached for his treachery to the constitution and to the
American people for his slavish devotion to all things Jewish!
@Digital
Samizdat True, but irrelevant. The Jews that matter don't read the Talmud or believe in
"Adam and Eve."
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
Frankly, it's these traditional religious notions of "anti-semitism" that get in the way
of understanding what is, at the core, an ethnic issue. It's Sheldon Adelson, the Zionist
entity in Palestine, and the ADL that are the problem, not some looney-tunes rabbi living in
Brooklyn.
The other side of the expalnation is the laking of reaction of the victim,the american
people.
The least that the people that loot the world trough and with the USA power should do, is ,at
least ,let us,the american people, a free ride.
Not illegal in the Talmud either but most certainly illegal in all of the countries that
DynCorp was caught profiting from this type of business. For some reason they never seem to
suffer for their exposure suggesting that they may be wielding the same influence that
Epstein had over our elected officials.
We dont have to get back to the Singer of this world but to our own politicians ,that allowed
them to do this to us,and to the world.In this kind of abusive realtionship the 2 sides are
to blame.
@Just
passing through "Look up income by ethnic group in the UK and US, you will find that
Indians and Chinese (South Asians) are the richest in both countries (except for Jews of
course)."
And why is that? Think about it. These are members of the Indian and Chinese elite who the
multinational corporations are doing business with.
In order to do business in China, the Chinese stipulated that the western corporations had
to give one of the members of the Chinese elite half ownership in the company. They were also
required to turn over the western technology to the China-based company. Western technology,
western money, cheap Chinese slave labor, ability to pollute to your heart's content. For
both sides, it was a win-win. The Chinese elite got filthy rich and then moved over to the
West with their newfound gains, buying up properties, forcing prices up for the natives. The
western corporations not only wanted cheap products to export back to the U.S., but they were
also developing a whole new market – Chinese consumers who would buy their products as
well. Double plus good!
And once in the West, the Chinese and the Indians stick to their groups. They hire their
own, promote their own, do business together. A lot of corruption, money laundering,
cheating, taking advantage of and bending laws. Rule of law? Code of ethics? Morals? Do unto
others? They never learned it. Opportunistic dual citizens.
I would not count on the effect of the electric shock on the leftist thinkers. The role
of Jewish Bolsheviks in the Cheka, NKVD, GULAGs, genocides by famine has been known from
the very beginning and yet it left no impact on the leftist thinkers.
It unfortunately has not had much of an effect on a lot of people in the West, who remain
ignorant or in denial of the role played by Jewish Bolsheviks in historic mass murders and
totalitarian repression.
Waiting for the Hollywood movie to tell the story.
This is an expensive, weighty, and important book, which will take some time to
digest.
Classical economists re-learn the science of money, starting with Prodhoun and even Marx
in Das Kapital volume 3. (Leftists are often correct about money, but wrong on social
issues.)
The jew Marx does do some deception in volume 3 with a sneaky equation that does not
compound interest, but otherwise he is pretty accurate. Marx was probably beholden to his
finance masters.
This is why you need to start with Zarlinga, as there is no BS to lead you astray. Hudson
tends to drill the bulls-eye too. There is so much deception in the field of money and
economy, that it is easy to get caught up in false narratives, like one-born free
libertarianism. Usury flows fund the deception, even to the point of leaving out critical
passages in translations, such as in Aristotle's works. Or, important works are bought up and
burned.
Michael Hudson is the leading economist resurrecting Classical Economics. Reading all of
Hudson and Zarlinga will take some time and effort, but it is good to take a first step.
@Anon
I respectfully disagree that "Kenya was given up [by Great Britain] before there was even an
anti-colonial movement in Kenya ."
According to Wikipedia : " The armed rebellion of the Mau Mau was the culminating response to
Colonial rule . Although there had been previous instances of violent resistance to
colonialism , the Mau Mau revolt was the most prolonged and violent anti-colonial warfare in
the British Colonial colony. From the start the land was the primary British interest in
Kenya ."
Just as the Kenyans suffered the consequences of British colonialism , the "Palestinians will
suffer
the consequences of Zionist colonialism until Israel's original sin is boldly confronted and
justly remedied " foreignpolicyjournal.com
@anon
A particular distinction of Jewish investors versus gentile investors – on average, of
course – is their use of bribery to get the force of government behind them. Rather
than taking a bet about some group being able to pay back some bonds and letting the chips
fall where they may, Jews start bribing or influencing politicians to force that group to pay
back the bonds.
Buy some bonds, charge outrageous fees, bribe officials in some form or other, get govt to
force the payment of bonds and outrageous fees. Rinse and repeat. Jews have been doing this
in some form aor another for 1500 years. It's why the peasants get a tad angry at both the
Jews and their bribed politicians/nobility.
@lavoisier
"But he should have been impeached for his treachery to the constitution and to the American
people for his slavish devotion to all things Jewish!"
A purely political impeachment, right down party lines. I hear Schiff has got his hands
full of Ukrainian-Jewish oligarchic money. Dear me, wait until that comes out.
Trump is in league with the Jews? Yeah, who isn't? Obama's lips are still sore from
kissing Jewish Wall Street bankers' asses (notice that none of them went to jail). Same with
the Clinton's.
You can get politicians to pass all sorts of laws in your favor if you've got enough dirt
on them. After all, your side owns the media, Hollywood, academia, the courts, the banks.
If dirt doesn't work, you can always threaten to impeach them in order to get what you
want.
But Trump is also revealing every last dirty one of them (accidentally or on purpose).
People see them now.
@J
Adelman J Adelman comes out swinging. He's such a tough guy. But does he make sense? Does
he care if he makes sense? The writer is talking about those Jews who are vulture
capitalists. He's not talking about every Jew. Isn't it a little odd that nearly all of these
funds are run by Jews? Can your corrupt mind accept that fact and address the question? Or
are you going to bore us with your religion and by that I mean your obsession with
anti-semitism, which is your religion.
@PCA
Stop splitting hairs. Is this the best you can do? Are you one of Lot's cronies? I don't
normally address petty matters of this kind but Joyce is describing a multitude of sins and
misconduct orchestrated by various Jewish financiers around the globe. It is not merely one
phenomenon; thus, 'phenomena' fits. Go troll someone else.
Lobelog ran some articles in Singer, Argentina, Iran Israel and the attorney from Argentina
who died mysteriously . Singer is a loan shark. Argentinian paid dearly .
Google search –
NYT's Argentina Op-Ed Fails to Disclose Authors – LobeLog
https://lobelog.com/tag/paul-singer/
Paul Singer NYT's Argentina Op-Ed Fails to Disclose Authors' Financial Conflict of Interest
by Eli Clifton On Tuesday, Mark Dubowitz and Toby Dershowitz, two executives at the hawkish
Foundation for Defense of Democracies (FDD), took
The Right-Wing Americans Who Made a Doc About Argentina
https://lobelog.com/the-right-wing-americans-who-made-a-doc-about-argentina/
Oct 7, 2015 One might wonder why a movie about Argentina, in Spanish and . of Nisman's and
thought highly of the prosecutor's work, told LobeLog, FDD, for its part, has been an
outspoken critic of Kirchner but has From 2008 to 2011, Paul Singer was the group's
second-largest donor, contributing $3.6 million.
NYT Failed to Note Op-Ed Authors' Funder Has $2 Billion
@mark
green Mark green the queen of self rightousness.
There are many non jews runny vulture funds worldwide with at least 100 in china
alone.
The list joyce provided is selective and politically motivated.There are many more non
jews who are guilty of financial crimes.The jails are full of them.
The vulture funds are a product of a system that punishes failure.Do not blame the
funds,blame the system.
This story and like many that appear here is designed to pressure israel to change
politically.Israels future lies in the hands of God not some mutt with a serious case of
mutters.
@Lot
venture capital funds are only made necessary because we have a federal reserve.. which is a
private bank and private banks want to earn interest.
consider the difference between when a private lender makes loans to the USA
(treasury)
on the books of the feds is the following
due from the USA $11,000
new cash printed and given to dumb clucks at the USA $10,000
profit on the loan $ 1,000
what happened here is the fed printed $10,000 in new bills.
Assume the loan made at 10% interest and it is due in 1 year.
Ok so what is the loan on the USA books
cash $10,000
amount payable to the Federal Reserve $11,000
loss on the deal $ 1,000
this loan becomes the loan on the local bank books
the government gives the bank its loan and its obligation to repay the principal plus
interest
If there were no interest (that is the government printed its own money and made
venture loans to entrepreneurs at 0% interest the entries would look like this )
Amount due in one year from venture borrower $10,000
new cash printed and loaned to venture $10,000
so if the venture guy spent the $10,000 and then went broke the treasury would still gets
its money back in taxes from those who earned profit the money the venture paid.. no one has
to beat somebody to pay the interest (the economy does not have the extra $1000 dollars in
interest so somebody has to lose)
When interest must be paid its like musical chairs.. each time the music stops there are
not enough chairs to go around, someone is left standing ( its like that in money lending,
the debtors dance until the music stops, but because the private bank only put the principal
amount $10,000 in circulation the guy needs $11,000 to pay the loan back where does he get
the extra $1,000? <=If ten $10,000 loans are made, and 1 guy goes broke, there will be
enough cash in the system for the 9 others to pay the interest they each owe and enough for
the local private bank and lawyers to get paid for handling the bankruptcy. . <= we
started with 10 loans, one loan went broke the 9 remaining borrowers each pay $11,000 to
retire the debt , there are 9 loans "$99,000 to repay them and $1000 to pay debt service
costs and legal fees.
if there were no interest on the loans, the bankruptcy would not matter.
What makes the venture capitalist have a business at all is the Federal reserve is a
private profit making bank. Lending printed money from the Federal reserve requires interest
to be paid, and that requirement of interest makes the economy horde its capital and the
economic players playing king of the mountain to get the extra money they need to pay the
interest . ..
Zionism brought private banking to the USA and the USA wrote a tax law to collect the
money from the Americans it governs to pay the interest on the debt.
this is a really simplistic description of what is happening to our economy so don't rely
on it but instead use its simplistic idea to model the impact of having interest on the
national debt is having each year. If our government reversed what it privatized to the
Federal Reserve, we could make the economy run more or less as we please. \we could eliminate
the national debt and with it income tax es.
Typical Jew baiting article. Mitt Romney isn't a "Jew" Ashish Masih isn't. Many more examples
of gentiles taking advantage of their brothers. May as well consider the Walton family of
Wal-Mart to be vultures as well since they benefit the most from this system, they're so
called Christians, not Jews. The problem is capitalism. Author seems to suggest that a moral
economic system has been corrupted. The system was designed in an era of widespread slavery
folks. Its an immoral system that requires theft, slavery, war, immigration, all the things
you hate, to survive. The system is working exactly as it is designed to work. Exploit
workers, the environment and resources, shift all the profits from workers to the owners of
capital, period. Welcome to the late stage, it eats and destroys itself
From the days of the colonists slaughtering the Injuns and stealing their land. The days
of importing African slaves, and indentured servants. The days of child labor and factory
owners hiring Pinkertons to gun down workers who protested shitty wages and working
conditions. The good ol days of the gilded age. Now the age of offshoring to China or some
other lower wage nation. Overthrowing leaders not willing to let their resources and people
be plundered and enslaved, driving refugees to our borders fleeing violence and poverty.
Importing H1B workers to drive down wages. It was always a corrupt system of
exploitation/theft/slavery. This is nothing new and doesn't require "Jews" to be immoral.
And all these so called "Christians" like Pastor Pence approve. Usury and capitalism run
amok. I'm sure Jesus is smiling down on all these Bible toting demons who allow their fellow
man to be exploited by the parasites. Sad!
Good for Tucker. He has his moments I'd watch his show if he wasn't a partisan hack. But
that will never happen working for Fox or any other corporate media.
@Colin
Wright I doubt Trump promised to go to war with Iran before he was elected. In his
Inauguration Speech, Trump said he wanted to bring the troops home and stop the wars. He
didn't have to say these things, he had already won the election, but he said them anyway.
One of the few times the media has laid off Trump was when he sent some missiles into
Syria (after he gave them hours of warning ahead of time that the missiles were coming). If
Hillary had been elected, Syria would have been leveled by now and flying an Israeli
flag.
Obama brought us the destruction of Libya and the murder of Gaddafi, the coup in Ukraine,
and through ISIS, which the U.S. armed, trained and paid for, tried to destroy Syria.
I don't really blame Obama or Bush Jr. or Clinton. They were all puppets who did as they
were told. If they hadn't, in the words of Chuckie Schemer, there would have been "six ways
from Sunday of getting back at them".
If you don't do what they want, you're impeached, some of your dirty laundry is aired, or
they purposely crash the stock market on you. If you still don't get the message, maybe
you're just assassinated.
Trump loves his daughter and she is married to a Jew. If they're not getting their way, I
could see them telling Trump: "Sad what happened at the Pittsburgh synagogue, isn't it? Sure
hope nothing like that happens to your daughter."
I don't envy Trump. He not only is up against the Democrats, but he is also fighting the
globalist neocons in his own party. Both parties want open borders and more war, something
Trump does not believe in. As far as I can see, he's throwing them bones in order to shut
them up. If he gets elected again, which I think he will, we might see a different Trump. Who
knows.
@Jimmy1969
I think this deal has already taken place. Israel has given away to China for 99 years the
hall commercial incomming This deal has taken place 2 or 3 years ago
Don't blame it on the Talmud. These Jews act in accordance to their Torah: "If Yahweh your
God blesses you as he has promised, you will be creditors to many nations but debtors to
none; you will rule over many nations, and be ruled by none" (Deuteronomy 15:6). "feeding on
the wealth of the nations" (Isaiah 61:5) is Israel's destiny according to Yahweh.
@mcohen
I took a squint at both your own and Mark Green's comment history. Your comment history
cannot even begin to compare in value, but I should have already guessed that from the
name-calling in the first line of your comment. Just weak, extremely weak.
Rather amusing to read our resident Jewish apologists carrying on about the absolute sanctity
of the necessity of collecting debts to the functioning of the capitalistic system. These
nations and corporate entities that are now in thrall of the Wall Street Jews , were herded
into debt by that other faction of the capitalist system, the dealers in easy money.
Snookering the rubes into lifelong debt, telling them that money is on the tap, promoting
unsustainable spending habits and then let the guillotine come down, for the vultures to feed
on. They are two sides of the same coin.
Its damned funny that the rich Jews nowadays are absolutely addicted to usury, rentier
activities, and debt collection, when the Bible itself condemns such activities. But they are
our elder brothers in faith according to some.
@Colin
Wright Carnegie was a Protestant. The Protestant cancer serves it's Jewish masters. Read
'The Jewish Revolutionary Spirit' by E. Michael Jones. There is definitely a revolutionary
nature to the international Jew just as there is to their Protestant dupes. Jewish nature is
to subvert the natural order and the west was built by the guidance of LOGOS. The Catholic
Faith created by God guided the creation of the west. These Jewish exploits are a result of
the Wests rejection of its nature and its enslavement
1. rich or poor, creditor or debtor, in the final analysis, ultimately, all will become equal
in the grave. the filthy rich might decide to lay their corpses in coffins made of gold, but
it will be in vain. the sorrows and the joys of this fleeting world shall quickly pass like
the shadow.
2. talmudics feel the need to accumulate money in order to have sense of security since they
were stateless for two millennia. paradoxically, amount of wealth is indirectly proportional
to a sense of security, provoking backlash from aggrieved host people.
3. establishment of State of Israel did not reduce the need for the accumulation but has only
heightened it since now talmudics feel the need to support it so that she could maintain
military superiority over neighbouring threats.
4. as long as Palestinians are not free and Israel does not make peace, talmudics will
continue to meddle in American politics. if you don't want to save the Palestinians for the
sake of humanity and truth or justice, at least you should do it for your own sake.
5. loan sharking, vulture whatever, etc., is the ugliness of big capitalism with capital C,
what is beyond sickening is the promotion of sodomy. if one becomes poor or homeless, it's a
pity. to go against nature is an abomination.
6. by using such words as "homosexual" you have accepted the paradigm of the social engineers
and corruptors, and are therefore collaborating with them. words have consequences since that
is how we convey ideas unless you own Hollywood and can produce your own moving pictures
too.
7. talmudics is a better word than as a great American scholar says, since people who promote
sodomy are absolutely opposed to the Torah (O.T.). those who still struggle to follow it
couldn't care less what happens to benighted goyim, only becoming reinforced in pride of
their own purity as opposed to disgraced nations. thus, practically, they too are talmudics,
alien to the spirit of the ancient holy fathers and prophets of Israel. the word "Orthodox"
has been stolen and now has lost all meaning or it means the exact opposite of what it
originally meant.
8. Blessed are the meek, for they shall inherit the earth. Matthew 5:5
@Colin
Wright Well there's nothing wrong in principle about specialists in valuing distressed
debt and managing it nuying such debt and using the previously established mechanisms for
getting value out of their investment. So the problem is how they go about enforcing their
rights and the lack of regulation to mitigate hardship in hard cases.
Still it is notable that it should, overwhelmingly be a Jewish business and such a
powerful medium for enriching Jewish causes and communities at the expense of poor
Americans.
While Whites theoretically still have the numbers to affect/determine the outcome of
elections, a majority of Whites usually stay home because they are tired of the 'evil of two
lessers' choice they are offered -- even voting for Trump got them little/nothing.
@Colin
Wright George Bush needed Tony Blair's support to attack Iraq , Donald Trump now has the
support of Boris Johnson to attack Iran : "Boris Johnson refuses to rule out military
intervention on Iran ." metro.co.uk
It is said that the "deep state " removed Theresa May from office as she was "too soft" on
Iran . As you suggest the attack will not happen until Trump's second term unless, in the
meantime , there is a false flag attack like 9/11 which can be blamed on the Iranians .
East Asians have freedom of speech. That is all that is needed to end Jewish Mafia vulture
capitalism. If it was Italian Mafia vulture capitalism, the west would end it a few seconds.
When one is in a "no see, no say, no hear" tribal group one can get away with everything.
East Asians don't believe in hiding reality.
Here is more on how Samsung fought back against little Paulie.
Samsung published controversial sketches in response to row over merger
Jewish U.S. hedge fund boss Paul Singer was trying to stop a Samsung business deal
In response the firm released cartoons on its website depicting Singer as a vulture
A row has broken out in South Korea with media there describing Jews as 'ruthless' with
money
Merger between Samsung C&T and Cheil Industries was approved today
This is how Paulie's row with Samsung started.
These are the extraordinary cartoons Samsung posted on its website which reportedly
depict a Jewish hedge fund boss as a money-grabbing vulture.
The row between Samsung and one of its major shareholders, Paul Singer, has sparked an
anti-Semitism row in South Korea.
Harvard-educated Mr Singer, 70, whose hedge fund Elliott Management owns a seven per
cent stake in Samsung C&T fell out with the company after he objected to a merger
deal.
Cartoons shown what Paul's company did to the Congo, just one of many nations he
pillaged.
In response Samsung posted a number of inflammatory cartoons on its website showing Mr
Singer as a long-beaked vulture, which have since been taken down.
In one of the sketches a poor-looking man goes, cap in hand, to the vulture who has an
axe hidden behind his back.
The caption reads: 'Elliott Management's representative method of earning money is,
first of all, to buy the national debt of a struggling country cheaply, then insist on
taking control as an investor and start a legal suit'
In another people appear to be dying in the desert from dehydration. Underneath is the
caption: 'Because of it, Congo suffered even more hardship'.
This is believed to refer to Elliott Management's business dealings in the Congo.
Samsung wanted to keep their company in the Lee family. They did not want a Jewish Mafia
tribal group take over.
The bitter fall out came because Samsung Group's founding family wanted to complete a
merger with its holding company Cheil Industries and Samsung C&T to shore up its
control of the firm as its chairman, Lee Kun-hee's health is in decline.
In the End, Samsung won. Paul lost.
The Lee family, who control Samsung, owns 43 per cent of Cheil Industries. The
controversial merger was finally approved today.
South Koreans are not shy to express reality as it is. The west has to learn the value of
freedom of speech before it too late for the west.
But the row has sparked an outpouring of anti-Semitism in South Korea.
One columnist described Jewish money as 'ruthless and merciless'.
And on Tuesday the former South Korean ambassador to Morocco Park Jae-seon expressed his
concern about the influence of Jews in finance.
In an extraordianry outburst he said: 'The scary thing about Jews is they are grabbing
the currency markets and financial investment companies.
'Their network is tight-knit beyond one's imagination,' Park added.
The next day, cable news channel YTN aired similar comments by local journalist Park
Seong-ho.
'It is a fact that Jews use financial networks and have influence wherever they are
born,' he said.
Neither Park Jae-seon and Park Seong-ho were available for comment.
In a piece published a fortnight ago, Media Pen columnist Kim Ji-ho claimed 'Jewish
money has long been known to be ruthless and merciless'.
While Whites theoretically still have the numbers to affect/determine the outcome of
elections, a majority of Whites usually stay home because they are tired of the 'evil of
two lessers' choice they are offered -- even voting for Trump got them little/nothing.
I said nothing of an electoral solution to America's problems the problems will not be
solved that way.
@Art
That scary thought has crossed my mind, too, Art. I've even started wondering if this whole
impeachment circus is really part of an elaborate plot to guarantee Trump's re-election. I
mean, would Pelosi's insane actions make the slightest sense otherwise? And everyone has
noted how this is such a 'Jew coup,' haven't they? It all looks so suspicious
What our Jewish friends have done to Argentina, through maneuvering the elections,
killing dissidents, and marking territory, is a cautionary tale to anybody woke enough to
see with their own eyes.
True, but irrelevant. The Jews that matter don't read the Talmud or believe in "Adam and
Eve."
Whether they believe it or not, they act as though they do. That shows it is an ancient
and essential part of their ethnic subculture. Who knows? Maybe Kevin MacDonald is right and
it's actually genetic .
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
The holo-hoax is just their modern version of 'chosenness'. Pretending to be the
biggest victims evah! is just another way of making themselves appear collectively as
morally superior to the rest of mankind–even the darkies:
But whether it's being wielded by the Zionists or the lefty Social Jewish Warriors, it's
really just a power play down deep. It's really just another way of reminding us
goyim–white and colored–that we are all just half-demons (so to speak) compared
to The Chosen.
@Wally
It is rather entertaining watching you kvetch, Jewish colonialism over WASP nations will be
glorious.
Vietnam & Congo can choose as they wish, it is they who vote for their leaders.
In fact, Congo was better off with colonialism.
America voted for Zion Don, he is now receving hundreds of millions of dollars from Jews
to do their bidding. It is hilarious that you can't see the irony of your comments.
In fact, it is even more funny what the Jews will do to WASP nations, enjoy your future of
transexualism and fast food, WASPs totally deserve everything that is coming at them.
Then you change the subject to Epstein. Pathetic.
If you had an IQ above room temperature, you would realise my segue into the Epstein
affair was a response to your question of "What deal was supposedly struck".
You killed Lumumba," she roared at the Belgian officials on the platform, before being
escorted away by the police. The music and speeches resumed.
She was right: they did. Belgium was heavily implicated in the 1961 killing of the
radical, first prime minister of an independent Congo, now the war-torn Democratic Republic
of Congo. In 1975 a US inquiry also pointed conclusively to CIA involvement in the
execution carried out by a Katangan police unit under a Belgian officer.
Paul Singer, a Jewish Mafia vulture capitalist did some "work" on the Congo too.
He also bought some of Congo's debt for $10m and sued for $127m. The Congolese
government was found to be corrupt and under US racketeering law, Singer may be able to
claim triple damages, reaping as much as $400m.
On March 9, 2016, Department of Justice (DOJ) oversight personnel learned that the FBI
had been employing outside contractors who had access to raw Section 702 Foreign Intelligence
Surveillance Act (FISA) data, and retained that access after their work for the FBI was
completed.
This information was disclosed in a 99-page FISA court ruling on April 26, 2017, that was
declassified by Director of National Intelligence Dan Coats.
That wasn't an isolated incident and the improper access granted to outside contractors
"seems to have been the result of deliberate decisionmaking" (footnote – page 87).
The FISA court noted the "FBI's apparent disregard of minimization rules" and questioned
"whether the FBI may be engaging in similar disclosures of raw Section 702 information that
have not been reported."
"This is bigger than Watergate + 9/11 + the Bay of Pigs + almost every other conspiracy
theory you can name combined. It is also why you're seeing definite signs of panic and
desperation everywhere from the House of Representatives to the mainstream media to the
boardrooms of the Fortune 500. This reaches from the heart of the Swamp in Washington DC to
Silicon Valley and Seattle, Washington. In East Germany, it came out after the Wall fell that
one-fifth of the population was involved in the surveillance of the other four-fifths of the
population; now keep in mind that due to the mathematical reach of the FISA warrants, the 825
million surveillance orders issued actually exceeds the 320 million population of the
USA.
Now we know how and why Google and Amazon and Facebook got so big, so fast. They were the
corporate arm of the surveillance state."
You disloyal Jews used government resources and private contractors to surveil the entire
country.
I wonder what's going to happen next?
Also why haven't you responded to any of the comments about what the Jews did in
Russia?
@RealistI said nothing of an electoral solution to America's problems
And I said nothing about an "electoral solution", or any other kind of "solution", to
"America's problems" -- I said/implied that blaming Whites, or the way they vote, more or
less exclusively, as you did, for the way things are, was not exactly a genius take -- there
is literally no one for a race conscious white person, eg a WN, to vote (affirmatively)
for at the moment -- and it is hard to imagine anyone emerging in the near future.
For the record: I (also) do not think just voting, especially in the current
one two party system with the usual 'evil of two lessers' choices offered,
will do anything for Whites.
What We abrogate (of) a sign or [We] cause it to be forgotten, We bring better than it
or similar (to) it. Do not you know that Allah over every thing (is) All-Powerful?
2:106
The verses on abrogation read as to only allow Allah to abrogate, so any human action on
this is stepping over the line imo.. maybe other than when 100% of the Ummah agree on
something, I read that could remove a surah of the Quran, like a voice of God. That rhymes
nicely imo.
Of course how to judge which ruling to use? I agree, it brings in a casuistry into the
faith that generally helps to confuse.. I don't know much about it though yet.
I think Islam preaches a decent message, but the average practitioner is open to
misinterpret it quite a bit. This is a failing of the teaching.. but I think Mohammed's
message was corrupted like Christ's message pretty much straight after his death. Gospel of
Thomas and Tolstoy's rewrites all the way for something closer imo.
venture capital funds are only made necessary because we have a federal reserve.. which
is a private bank and private banks want to earn interest.
Sentiments are correct and you are hovering over the target, but some details are
needed.
The federal reserve is the tail on the dog, not the dog. The Fed was created as a part of
the corporate banking money trust. Before Fed the reserve loops of banks were not tied
together, and they had to use treasuries (T bills or Lincoln Green-backs) to balance their
ledgers.
Banksters wanted to extend their money power beyond their region. In the days before
federal reserve bank money power would fall off the further you got away from the bank. Banks
hypothecate new bank credit, and the credit has to swim home to the debt instrument. This
"swimming home" is done easily when the ledgers are all connected through reserve loops (also
called the overnight market).
After Federal Reserve (1913) and before Wright Pattman, the Federal Reserve was recycling
its profits made on public debt back to its stock owners and member banks. The member banks
especially, were guaranteed profits no matter how the economy did. After Wright Pattman (mid
60's) Fed has to rebate to treasury they couldn't face up to the allegations they were
stealing from the commons, which they were.
Today, the FED rebates interest on TBills and public debt back to Treasury. The private
banks within the system continue to hypothecate new money at interest, as that is their
business model. This business model does not include morality, nor does it work in the public
interest. It works to enrich finance at the expense of the working/laboring economy.
So, central banks are not profit centers, but instead they ensure profit lower down
– within the private banking system. Central banks are backstops to prevent instability
within the already unstable debt money system.
Recent Example: The Repo Crises, whereby FED is monetizing repurchase agreements. Non bank
actors such as hedge funds, REIT's and others have been given access to the overnight market
(where reserves are supposed to be traded). The FED now swaps new keyboard dollars for
various finance paper to keep the non bank actors in the repo market liquid.
This action is artificial and props up the finance sector at the expense of the normal
working economy, and hence it is usurious.
Usury is a word that has been normed out of our language. Why? Because our (((friends)))
are agents of mammon, and they cannot help themselves. It may be genetic.
Usury is a power relation, where you steal from others because you can. Laws are changed
to enable the thefts.
In the case of the FED it was taking 6 percent from the people on public debts. Public
debts were funded by taxpayers. This money was then funneling backwards from FED into their
crony banks and paid off sycophants.
We don't know what the FED is doing today because the bad guys won't allow an audit. The
general statement is that private corporate banking is usurious, and was born in iniquity,
and that is where your eye should gaze, not necessarily at the FED or any central bank.
The debt money system and finance capitalism is state sponsored usury, and is a Jewish
construct.
Vulture capitalism is simply vultures buying up or creating distressed assets and then
changing the law, or using force to then collect face value of the debt instrument or other
so called asset. Vultures will use hook or crook to force down what they are buying, and hook
or crook to force up what they are selling. God's special people can do this because when
they look in the mirror, they are god, and are sanctioned to do so.
Maybe the vulture should replace the bald eagle as America's favorite bird since our dear
shabbos goy President Trump and cohorts are undermining the First Amendment and trying to
make it a crime to criticize Jews and/or Israel. Oh and don't think I am promoting the other
Zionist and their shabbos goy on the demshevik side. The Jew CONTROLS both sides and "our"
two party system has become Jew vs. Jew, not republican vs. democrat. Lenin said that the
best way to control the opposition was to lead it and (((they))) are at it AGAIN.
I think Islam preaches a decent message, but the average practitioner is open to
misinterpret it quite a bit. This is a failing of the teaching.. but I think Mohammed's
message was corrupted like Christ's message pretty much straight after his death. Gospel of
Thomas and Tolstoy's rewrites all the way for something closer imo.
The line of good and evil runs down the middle of each person's heart, and they have to
decide.
My line of attack on Judaism, Islam, Christianity, or whatever, has to answer the
question: "Is it good narrative for high civilization." Does the narrative make people
malfunction?
There are branches of Islam that are good narrative – where people choose the better
side of Islam.
The point is that these good branches, say the Suffi's, have to keep the crazy aunt in the
basement.
Abrogation allows what comes later, to gain power over what comes earlier. And what comes
earlier is the best part of Islam.
Christianity has the same problem, it does not do a good job of policing its crazies, who
twist scripture. Judaism, especially Talmudic Judaism is Kabala and utterances of the sages,
and it morphs and changes over time. For example, after Sabatai Sevi, the Kol-Neidre was
weaponized, and this construct is used by today's Zionists to wreak havoc. Before Sabatai,
there was Hillel, who weaponized usury.
Yes, I agree about Christianity changing quite a bit. In the first 300 years it was much
different than today, especially after the Arien controversy was settled by Constantine's
maneuvering of Bishops at council of Nicea. For example, before; reincarnation was part of
Christian doctrine, and after; reincarnation was excluded.
Trump should be impeached and convicted. But not for the reasons in the two Articles passes
by the House.
He should be for
Violating the Symington and Glenn amended 1961 Foreign Assistance Act to ban any aid to
clandestine nuclear powers that were not NPT signatories. Trump increased aid to Israel.
Moving the US Embassy to Jerusalem in violation of numerous UN Security Council and
General Assembly resolutions.
The abuse of Office via Nepotism in having totally unqualified Jared and Ivanka Kushner
serve as US Government respresentatives.
Executive Order classifying Jews as a Nationality protected from Free Speech criticism of
them, in violation of the First Amendment.
Of course those in Congress, that facilitated and cheered on the Israeli centric Trump
acts, should all be voted out forever.
I have long maintained that libertarianism/capitalism is really like a kind of Calvinism
for atheists. Calvinists used to assume that, since whatever happened was God's will and
God's will was invariable good, then whatever happened was good. Likewise, many modern cucks
seem to have just substituted The Market for God. Morally speaking, it all lets man off the
hook for anything that results–especially when those men happen to be Jewish
financiers!
No, boys and girls, The Market is not inherently good. It requires that a moral system be
superimposed on top of it in order to make it moral.
@Anon
After reading the book of this MI6 asset (and potential killer) who tried to fleece Russia,
you probably can benefit from watching a movie by Nekrasov about him. See references in:
It looks like it was Browder who killed Magnitsky, so that he can't spill the beans. And
then in an act of ultimate chutzpah played the victim and promoted Magnitsky act.
"... The Washington Examiner first reported Friday that lawyers for the Free Beacon -- a conservative outlet based in the nation's capital -- funded the project from fall 2015 to spring 2016, when it pulled its funding as Trump looked set to clinch the nomination. ..."
"... Washington Free Beacon ..."
"... After the Democrats took over funding of the operation in mid-2016, Fusion GPS would hire former British spy Christopher Steele and would lead to the production of the so-called "Trump dossier," filled with salacious but unconfirmed claims about how Trump was compromised by the Russians. ..."
"... The Free Beacon noted in its statement that it had "no knowledge of or connection to the Steele dossier, did not pay for the dossier, and never had contact with, knowledge of, or provided payment for any work performed by Christopher Steele." ..."
"... The Free Beacon is funded in large part by the New York hedge fund billionaire and major GOP donor Paul Singer. The New York Times reports that Singer initially supported Sen. Marco Rubio (R-FL) for the Republican nomination, but later spearheaded a campaign to deny Trump the nomination even after Rubio dropped out of the race. ..."
"... While supporting Republican establishment favorites such as Rubio and 2012 presidential candidate Mitt Romney, Singer was a major backer of Common Core and was the founder of a super-PAC that has the express purpose of turning the GOP pro-gay marriage. ..."
"... Kristol is also the founder of the Weekly Standard, which like the Free Beacon has a neoconservative foreign policy outlook. The Free Beacon was co-founded by two former Weekly Standard writers, chairman Michael Goldfarb and editor-in-chief Matthew Continetti. ..."
The Washington Free Beacon, funded by GOP mega-donor Paul Singer, was the original funder of
Fusion GPS' research project that attempted to dig up dirt on then-candidate Donald Trump -- a
project that would later be funded by the Democratic National Committee and Hillary Clinton's
campaign.
The Washington Examiner first
reported Friday that lawyers for the Free Beacon -- a conservative outlet based in the
nation's capital -- funded the project from fall 2015 to spring 2016, when it pulled its
funding as Trump looked set to clinch the nomination.
Lawyers for the Free Beacon informed the House Intelligence Committee of its role in the
funding on Friday. The outlet issued a statement
standing by its decision to fund the project:
Since its launch in February of 2012, the Washington Free Beacon has retained
third party firms to conduct research on many individuals and institutions of interest to us
and our readers. In that capacity, during the 2016 election cycle we retained Fusion GPS to
provide research on multiple candidates in the Republican presidential primary, just as we
retained other firms to assist in our research into Hillary Clinton.
After the Democrats took over funding of the operation in mid-2016, Fusion GPS would
hire former British spy Christopher Steele and would lead to the production of the so-called
"Trump dossier," filled with salacious but unconfirmed claims about how Trump was compromised
by the Russians.
Fusion has come under scrutiny for its
alleged ties to Russia, including the fact that many of the claims
originate from Kremlin sources -- meaning that the information came from inside the Russian
government.
The Free Beacon noted in its statement that it had "no knowledge of or connection to the
Steele dossier, did not pay for the dossier, and never had contact with, knowledge of, or
provided payment for any work performed by Christopher Steele."
"The Washington Free Beacon has issued a statement asserting that it had no involvement with
Christopher Steele or the dossier he compiled from Russian sources," Jack Langer, spokesman for
the House Permanent Select Committee on Intelligence, told Breitbart News. "The Beacon has
agreed to cooperate with the House Intelligence Committee to help the Committee verify this
assertion."
Yet, the revelation is likely to fuel questions about the role the so-called "Never Trump"
movement played in an effort that would eventually inflict damage on President Trump, and that
was possibly part of a Russian misinformation scheme.
The Free Beacon is funded in large part by the New York hedge fund billionaire and major
GOP donor Paul Singer. The New York Times reports
that Singer initially supported Sen. Marco Rubio (R-FL) for the Republican nomination, but
later spearheaded a campaign to deny Trump the nomination even after Rubio dropped out of the
race.
While supporting Republican establishment favorites such as Rubio and 2012 presidential
candidate Mitt Romney, Singer was a major
backer of Common Core and was the
founder of a super-PAC that has the express purpose of turning the GOP pro-gay
marriage.
The Examiner reports that the Free Beacon was originally part of the 501(c)(4)
tax-exempt organization -- the Center for American Freedom -- but in 2014 became a for-profit
organization. The Center's original board of directors includes William Kristol, a prominent
"Never Trump" activist.
Kristol is also the founder of the Weekly Standard, which like the Free Beacon has a
neoconservative foreign policy outlook. The Free Beacon was co-founded by two former Weekly
Standard writers, chairman Michael Goldfarb and editor-in-chief Matthew Continetti.
***Update***
"The Washington Free Beacon has issued a statement asserting that it had no involvement with
Christopher Steele or the dossier he compiled from Russian sources," Jack Langer, spokesman for
the House Permanent Select Committee on Intelligence, told Breitbart News. "The Beacon has
agreed to cooperate with the House Intelligence Committee to help the Committee verify this
assertion."
TrumpAlways •
2 years ago • edited I smell McCain. Anyone else smell McCain with a little bit of
Bush in there...
I have long thought that paul singer is representative of the worst people in the world
(argentina wtf)
and I'm glad carlson put his face up there so many times for his victims to see, in case he
ever ventures out of mordor undisguised. For all the money he has, a truly worthless pos, as
the closing comment made so clear. Good for Carlson, though, almost seems like actual
journalism. Kudos.
Glad to see someone in the MSM point out the obvious .Carlson called out Singer, but in
doing so he also called out the Republican Party, specifically Sen. Ben Sasse from Nebraska.
It will be interesting to see if Sasse is reelected.
Nebraskans – R and D both – should toss Sasse to the curb. He's angered
regular bat-poo crazy Republicans by his "never Trump" blather, then angered Nebraska
Democrats (both of us) by voting Trump/GOP well over 90 percent of the time.
Add to this his folksy BS appearances in the media and his execrable books, and he's a
classic empty suit. Closer to a straight Republican Mayor Pete than any thing else –
over-credentialed, over-ambitious and under performing.
Our Nebraska Democratic Party problem is two-fold: incredibly thin bench for decent
candidates and preponderance of Clinton/Obama/HRC leftovers running the state party. Will be
knocking on doors for Bernie come 2020 but state races are iffy at best.
Tucker has good sense. Perhaps Paul Singer is probably retiring from vultury. He's old and
it's a nasty fight. Singer is at the end of a 30 year stint of dispossessing other people.
Being vicious really isn't enough to keep the federal government at bay. Nor are his bribes.
There has been an unspoken policy of dispossessing poor and middle class people. Why? Is the
United States actually looking at a specific future? That wouldn't align with the free market
– tsk tsk. Or would it? Live free, die free. Somebody needs to define the word "free".
Did TPTB decide to deindustrialize this country that long ago? That's when they attacked the
unions. And the consensus might have been, "Go for it; get it while you can." So Paul Singer
did just that, along with other creepy people like Mitt Romney. Because once the country has
been hosed out by these guys we won't be pushing the old capitalist economy at all. We will
be pushing a globally connected, sustainable economy. Paul Singer is just a dung beetle. And
our government didn't want to discuss it because they would have had to create a safety net.
If we despise Singer, we must also despise Congress.
If we despise Singer, we must also despise Congress. -Susan the Other
Agreed. I think you can argue Congress (and the Executive Branch) have done more to help
the Chinese middle class than the American middle class over the last 30 years. Co-locating
our industrial base with the CCP on communist soil should be looked upon as the most radical
policy in our history but is not. Imagine if at the height of the Cold War we had told
Kruschev hey..how about you make all the stuff we need and we'll pay you $20 or $30T in trade
surplus over a number of years in hard currency which you can then parlay into geopolitical
power in Africa, South America, the ME and else where. What would the America of the fifties
think of this policy?
>Because once the country has been hosed out by these guys we won't be pushing the old
capitalist economy at all. We will be pushing a globally connected, sustainable economy.
Tucker Carlson Tears into Vulture Capitalist Paul Singer for Strip Mining American Towns
Posted on
December 5, 2019
by
Yves Smith
In a bit of synchronicity, Lambert gave a mini-speech tonight that dovetails with an important Tucker
Carlson segment about how hedge funds are destroying flyover. As UserFriendly lamented, "It is beyond sad
that Tucker Carlson is doing better journalism than just about anywhere else." That goes double given that
Carlson has only short segments and TV isn't well suited to complicated arguments.
Lambert fondly recalled the America he grew up in in Indiana, before his parents moved to Maine, where
most people were comfortable or at least not in perilous shape, where blue collar labor, like working in a
factory or repairing cars, was viewed with respect, and where cities and towns were economic and social
communities, with their own businesses and local notables, and national chain operations were few. Yes,
there was an underbelly to this era of broadly shared economic prosperity, such as gays needing to be
closeted and women having to get married if they wanted a decent lifestyle.
I'm not doing his remarks justice, but among other things, the greater sense of stability contributed to
more people being able to be legitimately optimistic. If you found a decent job, you weren't exposed to
MBA-induced downsizings or merger-induced closures. Even in the transitional 1970s, Lambert got his first
job in a mill! He liked his work and was able to support himself, rent an apartment, and enjoy some modest
luxuries. Contrast that with the economic status of a Walmart clerk or an Amazon warehouse worker. And even
now, the small towns that remain cling to activities that bring people together, as Lambert highlighted in
Water Cooler earlier this week:
Please watch this clip in full. Carlson begins with an unvarnished description of the wreckage that
America's heartlands have become as financial predators have sucked local businesses dry, leaving shrunken
communities, poverty and drug addiction in their wake.
Readers may wonder why Carlson singles out hedge funds rather than private equity, but he has
courageously singled out one of the biggest political forces in DC, the notorious vulture capitalist Paul
Singer, best known for his pitched battles with Peru and Argentina after he bought their debt at
knocked-down prices. Carlson describes some US examples from his
rapacious
playbook, zeroing on Delphi, where Singer got crisis bailout money and then shuttered most US
operation, and Cabela's, where a Singer-pressured takeover wrecked one of the few remaining prosperous
American small towns, Sidney, Nebraska. Not only are former employees still afraid of Singer, but even
Carlson was warned against taking on the famously vindictive Singer.
Kev said; "It will also slit your throat tomorrow."
This, aggressive mergers and acquisitions, has been going on for a very long time and everybody
always says that but I have yet to see any wealthy person suffer more than a small loss of a point or
2.
The fact is thats where we are at with capitalism. Money MUST become more money. There are no
outside considerations not even human life.
We all talk about robots going rogue and killing off humanity. Well money is already doing that.
Sound of the Suburbs, your comment suggests that this is the way things are and that there is nothing
to do about it, but that is wrong. It's not inherent to markets or to nature. In fact, "it's not even
hard" because we have agreed to it as part of the social contract, and created policies that enable it.
We can reverse the calculation by changing the tax rules, accounting rules, and legal liability rules and
this calculation reverses. TLDR; vote Bernie.
Which "we" are you talking about? You assume an entity with agency, when there is no such thing.
How do YOU suggest "WE" rewrite the non-existent "social contract?" Or change the tax rules, the
accounting rules, the Delaware corporations law, the Federal Codes of Civil and Criminal Procedure,
the current contents of the Code of Federal Regulations, the United States Code and all the other
trappings of legitimacy that give "us" the looting we suffer and remove any access to 'agency" to
re-fix things? I hope Bernie wins/is allowed to win, but he would need the skills of a Machiavelli and
Richelieu and Bismarck to "drain the swamp" of all the horrible creatures and muck that swirls there.
Not to say it's not worth trying "our" mope-level damndest to make it happen.
That said – it doesn't seem to me that Cabelas was 'forced' to sell. Singer owned less than 12% of the
stock. Is he to blame for either managerial greed, or lack of cojones? I'm not praising Singer, just saying
ISTM that he had couldn't have succeeded there without the greed or cowardice of management. I could be
wrong.
Carlson said this behavior is banned in the UK, how does that work?
Tthis is standard operating procedure for takeovers and greenmail in the US. First, 11% is going to be
way way above average trading volumes. Second, unless management owns a lot of shares or has large blocks
in the hands of loyal friends, many investors will follow the money and align with a greenmailer.
When a hostile player is forced to announce that he has a stake >5% by the SEC's 13-D filing
requirement, managements start sweating bullets. "Activist" hedge funds regularly make tons of trouble
with 10% to 15% stakes. CalPERS was a very effective activist investor in its glory years (not even
hostile but pushing hard for governance changes) with much smaller stakes.
The New York Post, which is very strong on covering hedge funds, confirms Carlson's take. From a 2016
article:
Hedgie Paul Singer hit another bull's-eye with his Cabela's investment.
Singer's Elliott Management bought an 11 percent stake in the hunting supply chain last October and
pressed the Springfield, Mo., chain to pursue strategic alternatives -- including a sale.
On Monday, his suggestion was heeded as the 55-year-old company said it agreed to a $5.5 billion,
$65.50-per-share takeover offer from rival Bass Pro Shops.
For Singer, who purchased much of his Cabela's stake at between $36 and $40 a share, Monday's news
means that the fund gained roughly 72 percent on its investment.
The same story depicts Singer as able to exert pressure with even smaller interests:
The hedge fund had an 8.8 percent stake in the company and was expected to net $58 million in
profits, The Post reported.
Elliott, which in June announced a 4.7 stake in PulteGroup, named three board members to the
Atlanta-based homebuilding company.
Last Thursday, it readied a new target, taking an 8.1 percent stake in Mentor Graphics, a
Wilsonville, Ore.-based developer of electronic design automation software.
Since then, shares of the company have risen 6 percent, to $26.24.
Mentor represents a "classic" Elliott investment, a source close to the matter told The Post,
adding that it is a "perfect time" for the company to sell itself.
You have a gift for explaining these things to people with a lot of education but not in finance. I
was confused by this, too, until I read your comment.
"CalPERS was a very effective activist investor in its glory years (not even hostile but pushing
hard for governance changes) with much smaller stakes."
Does that mean they pulled the same parasitical stripping of companies to raise money to help pay
pensions?
But, since it represents public employees and their paymasters, the taxpayers, couldn't CALPERS be
forced to only effect deals that create the most employment, ideally in California, rather than
destroy it? i.e. a ban on job destroying deals.
That would be a long term investment in California, rather than a short term means to raise cash,
no?
Tucker Carlson has taken remarkably courageous positions on a number of issues, including Syria,
Ukraine, Russia, etc.
Matt Stoller tweets praise of Carlson's report on Singer:
"There is a real debate on the right.
@TuckerCarlson just guts billionaire Paul Singer over the destruction of a Nebraska town through
financial predation. And Carlson is merciless towards Senator @BenSasse for taking $$$ and remaining
silent."
I have noticed a considerable uptick in comments across a whole range of sites about things "going to
get biblical".
When the next downturn happens there seems to be every indication that it's going to be on an
unprecedented scale.
Traditionally that's always seem to be time to have a good war, you can get the country to focus on an
external common enemy, you can ramp up industrial production providing full employment and you can use
national security to clamp down on dissent. Nuclear weapons seems to have put paid to that idea unless
our leaders convince themselves that they can survive and flourish in their bunkers (while simultaneously
relieving themselves of a large surplus of global population)
The populations willing embrace of the security state through all our electronic devices will be a large
hurdle for revolutionary elements as well as the crushing of dissent via institutions like the FBI and
the mainstream media.
The French and the Russians succeeded in the past. I doubt if I will either live long enough to see it
(being old) or even less likely to live through it.
Biblical in the OT sense. In the NT going biblical was a sacrifice.
I'm not fond of the phrase as it is a euphemism for violence or war. Under that definition, the US,
through declared and undeclared wars, has been going biblical for most of my life.
In the Jimmy Dore show this is almost a running joke now: He shows a clip with Tucker Carlson, where
Tucker is doing what you would expect the "liberal" media to do, like going against the deep state,
criticizing regime change wars (a few times with Tusi as his guest), or something like this great piece
against Singer and the hedge funds. Jimmy Dore then, each time, shakes his head in disbelief and asks, "Why
the hell is Tucker Carlson the only one who is allowed to say things like this? Its a mystery! I dont get
it!"
-- indeed: Why, and why on Fox News?
Because it sells. Can't let RT steal all the money with anti-war voices, Watching the Hawks, Jesse
Ventura, On Contact with Chris Hedges, these shows have viewership, and the Fox news owners know it.
Perhaps they'll have to make Tucker Carlson FOX, the TCFOX news channel. An anti-establishment,
pro-capitalism libertarianesque program experience, where they can decry all the pro-war democrats, and
RINO's, while making a case that capitalism isn't working cause of "big government".
Of course "private property" requiires state enforcement, which, when you remind libertarians that
they are "statists", they don't like that too much
It sells, but also doesn't pose a real threat to the powers that be. He creates very accurate,
specific, personally moving, well-produced, diagnoses of problems (he even names names!)
Then he and his ilk imply that the only solution is to magically create a government free white
Christian ethnostate where the good non-corrupt capitalists (like, as he states in this video, the
rockefellers and carnegies apparently were) will bring us back to the good ol days.
I strongly recommend sitting down for a good long policy discussion with a Tucker Carlson fan. In
my experience they will, without exception, go to great lengths to convince you that a vote for Bernie
will, undoubtedly, make all the problems Tucker describes worse, cuz gubmint bad and racist dog
whistles.
I suspect absent Carlson and his ilk, Bernie would actually have an easier time making inroads into
the republican base.
I heard no Carlson mention of "magically create a government free white Christian ethnostate
where the good non-corrupt capitalists (like, as he states in this video, the rockefellers and
carnegies apparently were) will bring us back to the good ol days."
Carlson seemed to suggest that prior US capitalists "felt some obligation" while, to me,
implying that current US capitalist versions do not feel this obligation.
Bernie could show he will listen to good ideas from all sides, even when the ideas surface on
Fox.
Carlson did mention some "countries have banned this kind of behavior, including the United
Kingdom" which suggests legislative changes are possible.
If Bernie were to pitch a legislative fix, he might pick up some Tucker Carlson fans.
Maybe Bernie might get mentioned favorably by Carlson.
Carnegie built hundreds of public libraries, Rockefeller donated thousands of acres of land,
Sears founder
Julius Rosenwald funded the beginnings of the NAACP.
Well, we can agree to disagree on whether or not Carlson's regularly invoked vision of
deserving Americans is racist or ethnocentric, and I'll admit his view of the role of
government can seem a bit schizophrenic at times – as far as I can tell he has strongly
libertarian sensibilities but in recent years figured out that "free" markets do, in fact,
require government regulations.
But I do strongly recommend reading a few social/economic histories of the US from the
industrial revolution through the beginning of the great depression.
I promise those fellows you mention were not quite so swell as Tucker makes out, and that
the relationship between philanthropy and capital hasn't changed as much as you seem to
think.
I'll just say this, if I were playing for the other team so to speak, and I were a GOP strategist
trying to secure a future for the party, the easy move would be to adopt a degree of populist rhetoric
and at least make some gestures towards easing the pain of towns which have been rendered post-industrial
wastelands by people like Singer and acknowledge what's been done. It would be almost comically easy to
paint the Democrats as the political party of globalized capitalism (because they are), even more so
because most of the places that are key liberal constituencies are also centers of the financial industry
(Manhattan and San Fransisco, for example). It wouldn't take much to graft the loathing of "urban elites"
in these communities onto PE and hedge funds. This, combined with toning down the nationalist rhetoric,
cutting back on the racism and homophobia (hell, even just keeping your mouth shut about it) would pretty
much build an unstoppable electoral majority.
Back in the days when I was more optimistic about the Democrats, I always tried to warn people that if
the Democrats (and other center left parties) waited too long and let the GOP be the first ones to the
lifeboats when neoliberalism started to sink, they'd get stuck holding the bag even if the GOP had more
to do with those policies historically. But pursuing this strategy would imply that the GOP is somehow
less beholden to its donors than the Democrats, which it isn't, but maybe Tucker Carlson is the canary in
the coal mine. Even people on the right realize the jig is up, and that they better start trying to cut
some kind of deal with the rising populist currents in US politics if they want to stay in power.
Tucker Carlson on Fox is making sense, while MSNBC and CNN peddle nonsense. What better reason to cancel
your cable and say adios to the fakery and programming.
In other unrelated news, Paul Singer has announced that he is providing funding to the Manhattan
Institute for Policy Research to try and understand why so many "flyover" Americans give their votes to
Trump. "It's a mystery. I have no idea why they would not vote for a good Republican candidate instead –
like my boy Mitt Romney" he stated. "Why would they do that? Maybe I should run for President like my buddy
Mike. Then they could all vote for me. Or else!"
Reading his Wikipedia page, I notice that he only donates money to things that effect him personally. He
went to Harvard so he gives to Harvard. He lives in New York so he gives money to the Food bank and the
Police – which both serve to keep the place calm. He is Jewish so he gives a ton to money to pro-Israel
causes. He votes Republican so he helps fund Republicans that will defend wealthy people like him. One son
comes out as gay so he gives to same-sex marriage & LGBTQ causes. He provides money to organizations that
fight taxes being imposed on wealthy people like himself. It is a very narrow circle of concerns that he
has. And the vast bulk of Americans are outside this circle I note.
But of all people to call him on his part in destroying the real economy of the United States. That which
actually makes stuff and does stuff instead of financial bs. Of all the people to do so it is
Tucker-goddamnn-Carlson. And on Fox News to boot. The same person that "liberal" protesters were
demonstrating outside his home with his family inside because they did not like his beliefs. It is kinda
funny when you think about it. A right wing commentator is attacking the Left. But from their left.
It is kinda funny when you think about it. A right wing commentator is attacking the Left. But from
their left.
What better proof that there is no Left left in the Left any more? Today's Left is to the right of
what used to be the Centre, Liberals are what used to be Conservative and Conservatives have moved into
"here there be dragons" territory. .
This is nonsense, the DSA for example is to the right of what used to be the Center? They aren't
left enough for some, including some of their members I suspect but .. But the left period has little
actual power is the thing. And it's all about taking power.
Like I've mentioned previously – politically .. our society has gone through a phase-shift. Mr.
Carlson is but just one example. So are those of us who held our noses, after seeing how transparently
conniving the DNC et al were, and voted for the Julius de Orange !
"the crushing of dissent via institutions like the FBI and the mainstream media"
This will be unnecessary. Recent research indicates that when people feel like they are being
watched, they self-censor.
The growing number of activist special interest groups with a myriad of hot topics and disparate
worldviews and interests just about guarantees that anything you say other than parroting the current
majority opinion will offend someone.
Couple that with murky legal powers, the unpredictability of the Twitter/Instagram mob, doxing, and
the expansion, both in extent and number of players, of ubiquitous surveillance, and significant
dissent becomes more and more a thing of the past.
I wonder if this has anything to do with the growing unreliability of political polls?
There is a populist Left. Its figurehead is Bernie but there are growing local/state organizations
like the DSA that may become relevant nationally in the not-too-distant future. AOC is a
current/future leader for this faction.
There is a populist Right. Its figurehead is Trump. From what I can tell, they're primarily online
but are also gaining strength in traditional conservative institutions like churches, community orgs,
etc.. Tucker appeals to this group. Josh Hawley is a Senator from MO with presidential ambitions who I
expect will lead this faction after Trump is gone. He is the slick-but-folksy and deadly serious
neo-Fascist type many on this board worry/warn about taking power if a real Left does not arise to
counter it/him.
Then there is the establishment elites (or ruling class, or deep state, whatever), which are
primarily Neoliberal (domestic policy) and Neoconservative (foreign policy). There have long been
these types in both parties, differing only by degree, but Trump has forced most of the "liberal"
Republicans into the D party. This group controls the money and most of the key institutions,
particularly the major media, tech, energy, and financial corporations, but their grip is slipping and
the mask is falling off. Some will side with the populist Left, but most will welcome the new Fascism,
i.e. the DNC apparatchiks who would rather lose to Trump than win with Bernie.
Mitt Romney, Bain Capital, another species of parasite, sucking some of the last marrow out of the
bones of America. Beware of billionaires who demonstrate that they are aliens to our society.
I read Tucker Carlsons book "ship of fools". It is all in there: criticism of the war fare state, Wall
Street, TBTF bail outs a.s.o. He spares neither Republicans nor Democrats. Kinda crazy but he voices more or
less exactly what Sanders is saying as well. Except he doesn´t get "Medicare for all" and he is social
conservative. Still you might think that there is enough common ground to work together. Instead we get
crazy idendity politics. I more and more believe that it is indeed so that the people on top have realised
that "identity politics" is the best thing that ever happened to them: divice et impera. Divide and rule as
already the Romans knew
And the biggest threat from Tucker Carlson is that the lower orders will believe that
Carlson-cum-Trump are as much their friend as Sanders. One of the longest-standing Idpol divisions in
US history has been unions vs. scabs. Over the past half-century, the Democratic Party has realigned
its public image in favor of the scabs. The union leadership stayed with the Dems, but the
rank-and-file long ago moved over to the Repubs. Old wine, new bottle.
Unions were weakened and made easier to destroy using IdPol. First by encouraging banning,
sometimes expelling, blacks from the various unions and secondly getting rid of first the
communists, then the socialists, and finally those deemed too liberal (not conservative enough).
Although the efforts by business interests, often helped by government at all levels, to
segregate unions was mainly in the 19th century and the "Better Dead Than Red" campaign was in the
20th especially after 1947, the use of racism and anti-leftism was done in both centuries.
You can see similar successful splintering of the Civil Rights Movements. First separating the
Suffragettes from from the anti-racism efforts. Then later the efforts to unite the Women's Rights
Movement with the successful efforts against racism was the 1960s were thwarted.
Let us just say that reform movement of the past two centuries has been splintered. The earlier
women's rights and the abolitionists, blacks and whites throughout the unions, suffragettes and the
anti lynching efforts, communists from everyone else, anti poverty from equal rights ( MLK did get
lead poisoning when he tried) and so.
So when I see the latest efforts to use IdPol to split poor people from everyone else or blacks
from whites, and see people falling for the same tactics I just lose my mind. Obviously.
You might think but you'd be wrong. St Clair in Counterpunch calls hims Tuckkker Carlson–apparently
because Carlson agrees with Trump on things like immigration. I read Carlson's book too and would say
only about half of it was material I would agree with. But the notion that anyone who doesn't stand up to
IDPol standards is a villain is crushing the left. They obsess over Trump while the wealthy of both
parties wreck the country.
I'd go along sooner with Tucker Carlson than Mr. St Clair, whose CP smeared both Caitlin Johnstone
and CJ Hopkins. St Clair and CP are controlled "oppo", IMO.
The commenter you were replying to had it right: divide et impera is the order of the day;
sometimes from unexpected sources, like the one mentioned above.
Great post! TC has strode out of the Fox News subset of the Overton window a number of times in recent
years.
PS: Yves, some introductory text to the part about Lambert's speech apparently didn't make it into the
post. It would fit between the 1st and 2nd paragraphs.
In my opinion, Tucker Carlson represents a very real and very active right-libertarian view that has been
consistently present within the Republican Party for decades. Anti-war, anti-imperialist, anti-big
business/pro-small business, and of course, anti-big union. Robert Taft comes to mind. I don't share their
"ideologies" but as a self-described socialist, I am deeply attracted to their criticisms. And criticisms
ARE important and necessary, even if the solutions are left wanting. I dearly hope that his popularity is a
sign of the realignment of politics, where issues of class and war become commonplace and issues of "to
impeach or not to impeach" fall by the wayside. I recognize that my hopes may not turn to realities.
But for an employee it makes no difference if they work for a big or small business (only big business
on average is LESS exploitative if anything – if for no other reason but they can afford to be – some of
the worst exploitation out there is employees working for small business owners).
Exactly,
right
libertarian. Within the libertarian spectrum there are real and then
royal libertarians, Tucker is of the latter.
http://geolib.com/essays/sullivan.dan/royallib.html
What are his immigration views? Are people motivated to come here because this global vulture octopus
thing has ruined their home market?
I have long thought that paul singer is representative of the worst people in the world (argentina wtf)
and I'm glad carlson put his face up there so many times for his victims to see, in case he ever ventures
out of mordor undisguised. For all the money he has, a truly worthless pos, as the closing comment made so
clear. Good for Carlson, though, almost seems like actual journalism. Kudos.
If we assume that good mergers achieve cost savings which ultimately benefit the consumer (they very
often do, assuming a good merger), is it better that a relatively large number of people save money on
goods, or that a relatively smaller number of people keep duplicate, unnecessary jobs?
Can you name such a good merger? Mergers by definition must reduce competition, and by classical
Liberal theory competition is what reduces prices for consumers.
In Neoliberal theory monopoly is the just reward for beating the competition. Sorry consumers! Bad
luck workers!
By what criteria do you deem a job unnecessary? Neoliberal criteria.
Here are some ways a merger can be bad for the US consumer.
If a merger results in employee pensions being transferred to the Pension Benefit Guarantee
Corporation (US government funded) then employee pension costs are being transferred to the US
taxpayer/consumer.
Or consider that a merger might create a monopoly that can raise consumer prices.
How does one determine that a proposed merger will be a good one that will "ultimately benefit the
consumer."?
Good morning Yves.
Tucker Carlson invoke Paul Singer noted ultra vulture as vehicle to transport Yves, others to Fox News
Commentary!
Seems the Good Night and Good Luck segue from Edward R Murro via Keith Olbermann to Tucker Carlson is
complete.
Thank you for this. It is a story that has been repeated countless times across the country, including
the midwestern town where I was born and raised.
As for Carlson being the only source of occasional light in the MSM -- the clarification continues. It has
truly become Bizarro World.
I wonder if the powers at be at Fox News allow Tucker to go on these rants because they know two things:
1.) 99% of bought and paid for Republican politicians will never do anything about this except perhaps some
lip service here and there.
2.) The fact that it's on Fox News will cause the Vichy left to not believe it's real or perhaps a Russian
phy op against American capitalism. Thus outside of the Sanders camp there will be no push/support for any
change.
Glad to see someone in the MSM point out the obvious .Carlson called out Singer, but in doing so he also
called out the Republican Party, specifically Sen. Ben Sasse from Nebraska. It will be interesting to see if
Sasse is reelected.
Nebraskans – R and D both – should toss Sasse to the curb. He's angered regular bat-poo crazy
Republicans by his "never Trump" blather, then angered Nebraska Democrats (both of us) by voting
Trump/GOP well over 90 percent of the time.
Add to this his folksy BS appearances in the media and his execrable books, and he's a classic empty
suit. Closer to a straight Republican Mayor Pete than any thing else – over-credentialed, over-ambitious
and under performing.
Our Nebraska Democratic Party problem is two-fold: incredibly thin bench for decent candidates and
preponderance of Clinton/Obama/HRC leftovers running the state party. Will be knocking on doors for
Bernie come 2020 but state races are iffy at best.
In a wacky pre apocalyptic world, truth and justice is pined for by many. Conservation is a critical
requirement. I now look at what is true and what is not, I know, very subjective. Those folks that tell us
to do things that harm us are transparent. We follow them at our peril.
I consider Sanders the most conservative option we have for the nation. He intends to 'conserve' our nation
and the people first. Something we have not had for decades, or ever, perhaps. Giving the people with the
most to lose a voice in how things move forward is a critical point of distinction from the rest of the
field.
so vote conservative. Protect that which makes us whole. Stop the looting and take back what has been stolen
to benefit all instead of a small clique of criminals.
But I'm an optimist.
Tucker has good sense. Perhaps Paul Singer is probably retiring from vultury. He's old and it's a nasty
fight. Singer is at the end of a 30 year stint of dispossessing other people. Being vicious really isn't
enough to keep the federal government at bay. Nor are his bribes. There has been an unspoken policy of
dispossessing poor and middle class people. Why? Is the United States actually looking at a specific future?
That wouldn't align with the free market – tsk tsk. Or would it? Live free, die free. Somebody needs to
define the word "free". Did TPTB decide to deindustrialize this country that long ago? That's when they
attacked the unions. And the consensus might have been, "Go for it; get it while you can." So Paul Singer
did just that, along with other creepy people like Mitt Romney. Because once the country has been hosed out
by these guys we won't be pushing the old capitalist economy at all. We will be pushing a globally
connected, sustainable economy. Paul Singer is just a dung beetle. And our government didn't want to discuss
it because they would have had to create a safety net. If we despise Singer, we must also despise Congress.
If we despise Singer, we must also despise Congress.
-Susan the Other
Agreed. I think you can argue Congress (and the Executive Branch) have done more to help the Chinese
middle class than the American middle class over the last 30 years. Co-locating our industrial base with
the CCP on communist soil should be looked upon as the most radical policy in our history but is not.
Imagine if at the height of the Cold War we had told Kruschev hey..how about you make all the stuff we
need and we'll pay you $20 or $30T in trade surplus over a number of years in hard currency which you can
then parlay into geopolitical power in Africa, South America, the ME and else where. What would the
America of the fifties think of this policy?
>Because once the country has been hosed out by these guys we won't be pushing the old capitalist
economy at all. We will be pushing a globally connected, sustainable economy.
Tucker Carlson has been making comments like this for a long time. And he's not a libertarian. He
believes in regulated capitalism.
What we might be seeing is a the beginning of the two parties flipping from left to right on economic
issues. The social issues just obscure it, as they were designed to do.
the only question then is to what extent social issues DERAIL the economic issues then. If social
issues mean paid family leave must be opposed for example because women oughta be barefoot and pregnant,
then that's derailing of real concrete material benefits period. Of course progressive socially is where
demographics trend.
But of course using the example of paid family leave, we're starting from a country with almost no
safety net to begin with, and there are bigger problems with the labor market as well (people having gig
jobs with NO benefits, they aren't going to be helped by policy changes to job provided benefits period).
Medicare for All is the issue that most incisively cuts through this ruling-class kayfabe. Both the
top-dog Dems and the top-dog Repubs get their jollies having their boots licked by workers in abject fear
for the health and life of their families. It is a neon testosterone line that neither Carlson nor Trump
will cross.
I find a good explanation for many behaviors is the human practice of favoring people in their circle of
acquaintances, friends and families, and showing some degree of contempt to others.
Some phrases
He (She) is not one of us! (Typically in an upper class UK accent)
The Others (Typically in a string ulster accent)
Not on our team (US)
He's a Catholic
He's a peasant
The attitude of "them and us" coupled with Greed, appears to drive many bad Human behaviors.
Indeed! My libertarian friend* is all about helping friends and family, I have seen him do it many
times. I totally agree with him, but I have concluded that his definition of "friends and family" is just
somewhat more restrictive than mine.
* True convo: "What about if listeria in the bologna at the nursing home kills your granny?" "Ah, a
whacking great lawsuit!"
Paul Singer is leading the hedge fund group that is trying to take over PG&E from the existing
stockholders/hedge funds through the bankruptcy process. He even offered more money to PG&E fire victims
($2.5B), that PG&E almost met (they want to pay part of the funds in stock).
Does anyone have an idea how he plans to make money by taking over PG&E? While the stock is very low, its
chance of going back to where it was is very low. Besides, PG&E is under pressure to actually maintain and
fire proof the distribution/transmission system and that won't be cheap.
Here's Jon Stewart roasting Tucker Carlson back in 2006 when he was just a clown with a bow-tie. A rare
and well deserved confrontation.
https://www.youtube.com/watch?v=aFQFB5YpDZE
Since then Tucker has ditched his bow-tie and developed a conscience.
We used to call this "being Dutch uncle."
Tucker has CHANGED his views on lots of things. Like I have. To be able to admit you were wrong is a big
deal. He supported the Iraq War. I didn't. In retrospect, he realized he did this because of group think
cool kids thing. Then he realized that he had been conned, He doesn't like being conned. I thought Obama's
speech was the opposite of John Edwards "2 Americas". Obama was delivering a "con" I.e. "We are all One
America". So now Tucker and I, from different sides, are more skeptical. I started questioning my groupthink
Democratic viewpoint in 2004. Slowly I realized that I too had been conned. So some of those on the "right"
and Some of those on the "left" have sought other ports to dock in as we figure this all out. Naked
Capitalism is one of those docks. So soon we should introduce Tucker to Yves.
As I have frequently pointed out to my once-upon-a-time "liberal" friends, Tucker Carlson is often these
days a worthwhile antidote to the collective yelpings & bleatings of the brain-snatched amen corner on MSNBC
& CNN. In this instance (and others) his observations are rational and clearly articulated. He makes sense!
And he is on the correct (not far right) side of the topic. The continuing Iraq/Syria catastrophe, PutinGate
and the hedge fund hooligan Paul Singer are just three recent examples. His arguments (and his snark) are
well played. Alas, following these sensible segments, he is still a Fox guy and is obliged to revert to Fox
boilerplate for most of the rest of the night. But in our present crackbrained media environment, be
thankful for small mercies such as Tucker's moments.
Thanks for the post. I probably would have missed this without you.
There are a couple things that are interesting to me. First, why does Tucker Carlson call out Ben Sasse
for accepting a maxed out campaign contribution from Paul Singer? The Governor of Nebraska then and now is
Pete Ricketts. His father (Joe – TD Ameritrade, Chicago Cubs) is a "very good friend" of Paul Singer.
Everyone believes Pete Ricketts wants to run for US Senate and the nearest opportunity is Ben Sasse's seat.
More than meets the eye?
Two, a longtime director of Cabela's is Mike McCarthy of McCarthy Capital. [Former Secretary of Defense
Chuck Hagel worked for McCarthy.] ES&S (electronic voting machines) is owned by McCarthy Group, LLC.
A video from Tucker Carlson. Every once in a while he's allowed to say things the
mainstream media isn't allowed to say.
The video is about Paul Singer (Elliott Management) and his hedge fund buying into
Cabela's which was headquartered in Sydney, Nebraska. Cabela's was merged with Bass Pro Shops
and the town lost 2000 jobs and was hard hit by Singer and his fund but Elliott Management
and Singer made a nice profit.
It shows the people and town left behind after the jobs leave. Watching this was
depressing.
Bizarre reasons for resignation of Patrick Byrne as CEO of Overstock, an internet retailing
company as per zerohedge today. I can't really understand what he is on about re the Clintons
and Russia, and he was closely connected to to Maria Butina.
What is interesting about Byrne is how he reacted to a vicious attack on his company by
naked short sellers a few years ago. Naked short selling is mass selling of shares that you
do not own. It is officially known as Failure to Deliver and has been in use for decades. It
is illegal but people get away with it and the SEC rarely prosecutes. Byrne was so infuriated
he set up a website called Deep Capture where, joined by some good investigative journalists,
he started exposing the naked short selling scam that came to a head when Lehman CEO Fuld
told Congress that naked short selling played a major role in undermining his company and
setting off the 2008 crisis. It coincided with research I was doing into the naked short
selling of a Spanish company with a subsidiary in the US and Deep Capture helped point in the
direction of probable culprits.
Byrne's stuff went on to became rather hysterical and overly conspiratorial. Pity
that.
That bill alone makes Warren a viable candidate again, despite all her previous blunders. She is a courageous woman, that
Warren. And she might wipe the floor with the completely subservant to Israel lobby Trump. Who betrayed his electorate
in all major promises.
Notable quotes:
"... Not only would Warren's legislation prohibit some of the most destructive private equity activities, but it would end their ability to act as traditional asset managers, taking fees and incurring close to no risk if their investments go belly up. The bill takes the explicit and radical view that: ..."
"... Private funds should have a stake in the outcome of their investments, enjoying returns if those investments are successful but ab-1sorbing losses if those investments fail. ..."
"... Critics will say that Warren's bill has no chance of passing, which is currently true but misses the point. ..."
"... firms would share responsibility for the liabilities of companies under their control, including debt, legal judgments, and pension obligations to "better align the incentives of private equity firms and the companies they own." The bill, if enacted, would end the tax subsidy for excessive leverage and closes the carried interest loophole. ..."
"... The bill also seeks to ban dividends to investors for two years after a firm is acquired. Worker pay would be prioritized in the bankruptcy process, with guidelines intended to ensure affected employees are more likely to receive severance pay and pensions. It would also clarify gift cards are consumer deposits, ensuring their priority in bankruptcy proceedings. If enacted, private equity managers will be required to disclose fees, returns, and political expenditures. ..."
"... This is a bold set of proposals that targets abuses that hurt workers and investors. Most readers may not appreciate the significance of the two-year restriction on dividends. One return-goosing strategy that often leaves companies crippled or bankrupt in its wake is the "dividend recap" in which the acquired company takes on yet more debt for the purpose of paying a special dividend to its investors. Another strategy that Appelbaum and Batt have discussed at length is the "op co/prop co." Here the new owners take real estate owned by the company, sell it to a new entity with the former owner leasing it. The leases are typically set high so as to allow for the "prop co" to be sold at a richer price. This strategy is often a direct contributor to the death of businesses, since ones that own their real estate usually do so because they are in cyclical industries, and not having lease payments enables the to ride out bad times. The proceeds of sale of the real estate is usually dividended out to the investors, hence the dividend restriction would also pour cold water on this approach. ..."
"... However, there is precedent in private equity for recognizing joint and several liability of an investment fund for the obligations of its portfolio companies. In a case that winded its way through the federal courts until last year ( Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund ), the federal court held that Sun Capital Partners III was liable under ERISA, the federal pension law, for the unfunded pension obligations of Scott Brass, a portfolio company of that fund. The court's key finding was that Sun Capital played an active management role in Scott Brass and that its claim of passive investor status therefore should not be respected. ..."
"... Needless to say, private equity firms have worked hard to minimize their exposure to the Sun Capital decision, for example by avoiding purchasing companies with defined benefit pension plans. The Warren bill, however, is so broad in the sweep of liability it imposes that PE firms would be unlikely to be able to structure around it. It is hard to imagine the investors in private equity funds accepting liability for what could be enormous sums of unfunded pension liabilities ultimately flowing onto them. Either they would have to set up shell companies to fund their PE investments that could absorb the potential liability, or they would have to give up on the asset class. Either way, it would mean big changes to the industry and potentially a major contraction of it. ..."
"... I am surprised that Warren sought to make private equity funds responsible for the portfolio company debts by "joint and several liability". You can get to economically pretty much the same end by requiring the general partner and potentially also key employees to guarantee the debt and by preventing them from assigning or buying insurance to protect the guarantor from being liable. There is ample precedent for that for entrepreneurs. Small business corporate credit cards and nearly all small business loans require a personal guarantee. ..."
"... Warren's bill also has strong pro-investor provisions. It takes on the biggest feature of the ongoing investor scamming, which is the failure of PE managers to disclose to the investors all of the fees they receive from portfolio companies. The solution proposed by the bill to this problem is exceedingly straightforward, basically proclaiming, "Oh yeah, now you will have to disclose that." The bill also abolishes the ability of private equity managers to claim long term capital gains treatment on the 20 percent of fund profits that they receive, which is unrelated to the return on any capital that the private equity managers may happen to invest in a fund. ..."
"... We need a reparations movement for all those workers harmed by private equity. Seriously. ..."
"... It's so nice to see someone taking steps to protect the rights and compensation of the people actually doing the work at the companies and putting their interests first in case of bankruptcy. That those who worked hardest to make the company succeed were somehow the ones who took it in the shorts the worst has always struck me as a glaring inequity bordering on cruelty. ..."
Elizabeth Warren's
Stop Wall Street Looting Act , which is co-sponsored by Tammy Baldwin, Sherrod Brown, Mark Pocan and Pramila Jayapal, seeks to
fundamentally alter the way private equity firms operate. While the likely impetus for Warren's bill was the spate of private-equity-induced
retail bankruptcies, with Toys 'R' Us particularly prominent, the bill addresses all the areas targeted by critics of private equity:
how it hurts workers and investors and short-changes the tax man, thus burdening taxpayers generally.
"... The result has been a disaster for consumers, the environment and the condition of the infrastructure which was sold off as a result of the privatization. Wikipedia provides a helpful list of the past history of awful, depressing headlines the company has generated: ..."
Of all the inhabitants of the Little Shop of Horrors that is neoliberalism, surely the most
gruesome cohort must be privatization of monopoly public services. And then within this
best-worst category, privatization of potable water and wastewater treatment utilities can't be
anything other than an outright winner of this ugly competition.
Where I live in southern England, the Thatcher administration – who else? –
privatized the previously state-owned company which has a monopoly, as all water supply and
sewage treatment inevitably requires, on providing potable water and treating wastewater which
flows into the sewer system and eventually, via treatment plants, back into the
watercourses.
The result has been a disaster for consumers, the environment and the condition of the
infrastructure which was sold off as a result of the privatization. Wikipedia provides a helpful
list of the past history of awful, depressing headlines the company has generated:
In 2007 Southern Water was fined £20.3 million for 'deliberate misreporting' and
failing to meet guaranteed standards of service to customers. Southern Water Chief Executive
Les Dawson said: "Today's announcement draws a line under a shameful period in the company's
history".
In 2011 Southern Water Ltd was fined £25,000 when sewage flooded into Southampton
water.
The company was ordered to pay £10,000 in fines and costs after sewage seeped into a
stream at Beltinge in Kent.
A leak of sewage from Southern Water's plant at Hurstpierpoint pumping station, West
Sussex, lead to fines and costs of £7,200 in 2011.
Southern Water was fined £50,000 in April 2011 for two offences relating to
unscreened discharges into Langstone Harbour, Hampshire, between November 2009 and April
2010.
In June 2010 Southern Water was fined £3,000 after it admitted polluting 2 km of a
Sussex stream with raw sewage, killing up to a hundred brown trout and devastating the fish
population for the second time in five years. Crawley Magistrates' Court heard that the
Environment Agency received calls from members of the public after dead fish were seen in the
Sunnyside Stream in East Grinstead on 30 August 2009.
In November 2014 Southern Water were fined £500,000 and agreed to pay costs of
£19,224 at Canterbury Crown Court after an Environment Agency investigation found that
untreated sewage was discharged into the Swalecliffe Brook, polluting a 1.2 kilometre stretch
of the watercourse and killing local wildlife. (www.gov.uk/government/news)
In December 2016 Southern Water was fined a record £2,000,000 for flooding beaches
in Kent with raw sewage, leaving them closed to the public for nine days. The Environment
Agency called the event "catastrophic", while the judge at Maidstone crown court said that
Southern Water's repeat offending was "wholly unacceptable " . The company apologised
unreservedly, as it did when fined £200,000 in 2013 for similar offences. Due to health
concerns, Thanet district council was forced to close beaches for nine consecutive days,
including the Queen's diamond jubilee bank holiday weekend. (The Guardian, 19 December
2016)
You would have thought, perhaps in hope rather than realism, that after this deluge of crap
(literally), Southern Water (and their investors) might have, if you'll forgive the pun,
wondered if it wasn't time to clean up their act. If so, you'd be, uncharacteristically for
Naked Capitalism readers, rather naive. Southern Water has made their previous civil
violations look like a spot of mustard on a necktie.
Southern Water was fined by the regulators here £126M on June 25th, which sounds a lot
but is in reality in slap on the wrists territory in view of their latest misconduct.
Before delving into the details of that, to provide some context, the utility is the usual
PE-orchestrated financial-engineering asset-sweating systematical reduction of a former public
service to a hollowed out husk.
Southern Water is owned by a consortium, which came together
Clive again, momentarily interrupting the flow, like a blocked sewer. The use of language
there is almost an art form. "came together". Did they all hook up on Tinder or something? Not
a bit of it. The "consortium" was a Private Equity instigated lash up of yield-hungry investors
chasing, like everyone else these days, above-average rates of return. Why didn't they simply
buy chunks of the publicly-traded equity tranches of the company to give themselves exposure to
this particular asset class (public utilities)? Because this wouldn't have given them
sufficient leverage and control over the institution to do their financial raping and
pillaging. Back, reluctantly, to Southern Water
in 2007 solely for this purpose.
The consortium members are shareholders in Greensands Holdings Limited, the top holding
company. [ ]
The Greensands consortium members comprise a mixture of infrastructure investment
funds, pension funds and private equity. The infrastructure funds are managed by JP Morgan
Asset Management, UBS Asset Management and Hermes Investment Management.
The pension funds are represented by JP Morgan Asset Management, UBS Asset Management,
Hermes Investment Management and Whitehelm Capital or are self-managed. Cheung Kong
Infrastructure and The Li Ka Shing Foundation are direct investors.
What have these fine upstanding custodians of our water supply been up to, then? Lying,
cheating, bullying and polluting. Ofwat, the UK water industry regulator, started peering more
closely at Southern Water in 2018. They
didn't like the look of what they saw .
A board which was asleep at the wheel:
Water resources management plan and market information
What we found
Overall, we had serious concerns in key areas of this assessment such as options
costing, Board involvement, assurance and leakage reduction presentation. The draft water
resources management plan option costs were not presented clearly and a limited description
of assurance was provided for both the plan and market information table. The late provision
of the market information and the time taken to update option cost information did not
provide confidence in the company's management of this data. The leakage reduction target, a
key plan metric, was not consistently presented in the plan and there was no evidence of
Board involvement or sign off.
Our assessment: serious concerns
A company that deliberately obfuscated the regulators:
What we found
[ ] We currently have four open cases – an enforcement case, a sewer requisition
case and two requests to appoint an arbitrator.
[ ]
In terms of the enforcement case, we do not consider that the company has met our
expectations and we have serious concerns. This is based on Southern Water not responding
fully to our requests for information (for example, by providing documents with missing pages
and/or text), not responding in a timely manner and providing relevant information that was
unclear. This has affected our ability to rely on the information provided and has required
us to take steps to seek further clarifications and grant extensions to previous deadlines
for responses, impacting our ability to progress the investigation as quickly and efficiently
as we would have liked.
Our assessment: serious concerns
These failings led the regulator to conduct a much wider-reaching inquiry. The full
regulatory report has to be read in its entirety to convey the awfulness that went on. But
edited highlights, or maybe that should be low-lights, were:
・Falsification of regulatory reporting for effluent discharge quality to avoid
fines:
In summary, as a consequence of now restating past WwTW performance data, we have
calculated that Southern Water has avoided price review penalties in past years amounting to
a total of £75 million (in 2017-18 prices). This has arisen as a direct consequence of
the practices in place within the company to implement ANFs at its WwTW (Clive:
Waste-water Treatment Works) over 2010 to 2017. The total amount of avoided price review
penalties reflects the restated figures that Southern Water has now provided about the
numbers of WwTW that were potentially non-compliant with permit conditions relating to final
effluent quality.
・Deliberate attempts at evasion -- government agencies monitor water treatment plants
but the operator predicted when the inspections and sampling was due and intentionally halted
to flow from treatment plants ("Artificial No Flow or ANF" events) so there was no output to
sample:
The Sampling Compliance Report provides evidence (mostly in the form of email extracts
between employees of Southern Water between 2010 and 2017), of staff anticipating the timing
of planned OSM (Clive: On Site Monitoring) samples across numerous WwTW, in order to ensure
that no effluent was available for sampling purposes. This deliberate practice (which took
place through a number of different methods) of creating an artificial "no flow" event
(described as an "Artificial No Flow or ANF") meant that a sample under the OSM regime could
not be taken thus ensuring that the sample (and as a consequence the relevant WwTW) would be
deemed as being compliant with permit conditions. As a result of this manipulation, a false
picture of Southern Water's WwTW performance (and how this was being achieved) was provided
internally within the company, to the Environment Agency (Clive: the UK's equivalent of
the EPA, similarly gutted, but that's another story for another time ) and to
Ofwat
・They even took waste water discharges away by tanker so nothing could be measured at
the outfall pipes.
Staff then used the knowledge about sample dates to put in place ANFs. This included,
for example, through the improper use of tankering (i.e. by tankering wastewater from one
WwTW to another to cause an ANF). Another method included 'recirculating' effluent within a
WwTW again to ensure there was no final effluent available for sampling.
・Senior management hassled and pressured employees to obfuscate performance
measures.
The report also highlighted occasions where employees felt pressured by senior managers
to create ANFs.
・The whistleblowing policy for employees actually started with a big red frightener
threatening dismissal for using the wrongdoing reporting mechanisms:
Southern Water has acknowledged in its Action Plan that there were deficiencies in its
organisational culture which prevented employees from being comfortable with speaking out
about inappropriate or non-compliant behaviours. This included having in place ineffective
whistleblowing processes which resulted in no staff coming forward to report their concerns
despite certain staff being obviously uncomfortable about the implementation of ANFs and
feeling pressured to act in an improper manner (as evidenced by emails we have seen that are
referenced in the Sampling Compliance Report).
The whistleblower policy Southern Water had in place at the time included on its first
page and highlighted in bold the following text: "Should any investigation conclude that the
disclosure was designed to discredit another individual or group, prove to be malicious or
misleading then that worker concerned would become the subject of the Disciplinary Procedure
or even action from the aggrieved individual."
By pretending that waste water being discharged into watercourses was of a higher quality
than it was, the investors pocketed profits that should have gone on infrastructure
improvements and staffing to enable treatment plants to be safely operated and checked
effectively.
Criminal investigations are pending .
But we've seen this movie many times before. Protected by the best corporate lawyers money
(public consumers' money, that is) can buy, a defence shield of auditors, layers of management
on whom the blame can be pinned and a complex legal argument which has to be constructed to a
high evidence threshold allowing jurors to be thrown off the scent to a degree that a
reasonable doubt emerges, we shouldn't hold our breaths.
So we're left with the penalties imposed. Unfortunately there's less here than meets the eye
initially from the headline figure. From the regulatory report:
This is a notice of Ofwat's intention to issue Southern Water with a financial penalty
amounting to £37.7 million reduced exceptionally to £3 million for significant
breaches of its licence conditions and its statutory duties. This is on the basis that
Southern Water has undertaken to pay customers about £123 million over the next five
years, some of which is a payment of price review underperformance penalties the company
avoided paying in the period 2010 to 2017 and some of which is a payment to customers for the
failures set out in this notice, paid in lieu of a penalty.
This means the regulator reduced the up-front cost (which would have come out of the profits
for fiscal 2019-20 in one hit) for an arrangement which allows Southern Water eee-zee payment
terms and to spread the cost over five years through a customer rebate initiative. And some of
the rebate is itself merely penalties which would have been levied if the wrongdoing --
environmental pollution and missed targets for waste processing quality -- had been identified
at the time. They are trying to bribe me with my own money.
The whole sorry saga shows how the entire publicly-overseen but privately-owned regulated
utility model is completely broken. The system is a sitting-duck for gaming and, at best, the
issues are uncovered well after the fact. If ever.
There is, however, a final failsafe currently still in place. Water quality standards in the
EU are mandated by EU Directive with redress available through the Court of Justice of the
European Union (CJEU). A Member State government can be fined and ordered to implement better
oversight and governance of the utilities. Thus, any temptation which the U.K. government might
succumb to, to "fix" problems like those entrenched in Southern Water by slackening off the
potable and wastewater standards, are prohibited by the threat of EU / CJEU referral.
The U.K. government has promised that, post-Brexit, environmental protections will be
"equivalent or better than" those specified in the EU Directive. I -- and similarly cynical
readers -- might well harbour a few doubts about that.
Mmm. I can't help but think that non-government ownership is not (necessariliy) the
problem, but PE (an industry that has made a lot of people rich in the last 20y by pricing
the same asset off ever-lower discount rates) certainly is.
Government ownership often results in unaccountable, faceless monopolies (I'm old enough to
remember British Rail, which felt that it was an entirely acceptable plan to raise fares to
push travellers off rail and onto the roads when the trains got too full) and the "taking
private" of steady-state utility businesses, with cashflows that were "ripe" for
securitisation and other smoke and mirrors moves, pushed accountability back into the dark
ages.
There have been a number of cases of assets like this bought by JVs of PE and public pension
plans. I wonder, were the latter just solicited to make the actions of the former look more
respectable ?
The government certainly doesn't always do a bang up job with everything it controls, but
when the government runs things, citizens at least theoretically have some recourse.
When a private corporation runs it, citizens can, literally in the case above, eat
s**t.
There is, however, a final failsafe currently still in place. Water quality standards in
the EU are mandated by EU Directive with redress available through the Court of Justice of
the European Union (CJEU). A Member State government can be fined and ordered to implement
better oversight and governance of the utilities. Thus, any temptation which the U.K.
government might succumb to, to "fix" problems like those entrenched in Southern Water by
slackening off the potable and wastewater standards, are prohibited by the threat of EU /
CJEU referral.
I do believe that the combination of Water Quality Framework
Directives , along with the Habitats
and Birds
Directives , are a major 'hidden' driver behind the people behind Brexit. These
Directives are written in such a way as to provide almost no wiggle room for national
regulators to escape hitting hard quantitative targets for water and habitat improvements.
The Fracking industry is a very significant example – the Water Frame Work Directive
also sets standards for groundwater, and its exceptionally difficult for the industry to meet
the standards of proof that they will not degrade the quality of these water bodies. The ECJ
is dominated by judges from northern European jurisdictions, which tend to take a far more
'literal' approach to Directives and their associated national laws and regulations. They
provide zero room to massage failures to hit targets.
Escaping those Directives will be worth billions to those two industries at the very
least. Well worth shoving a bit of money to the various campaigns. There are plenty of other
industries that likewise feel they will benefit from what will be an upcoming bonfire of the
Regulations.
I think too that the wriggle-room on water quality -- wastewater especially, potable is
generally not something that anyone would risk meddling with; well, unless you live in Flint,
Michigan, anyway -- has not escaped the notice of or despicable elites here.
The temptation by government to play along, grant "temporary" "exemptions" in response to
industry whining, sorry, lobbying, will prove difficult to resist, more than ever when the
U.K. government will be in a position to know that its word is final (it can simply make new
laws if it decides it doesn't like the old ones).
Will the U.K. as a society end up doing the right thing, or simply backsliding and
acquiescence because it's just easier? At least in the short term. I wish I had a definitive
answer to that one. Ask me again when we know for sure, although I suspect you'll have to dig
me up and open the coffin first.
International racketeering. First they hide the real "persons of interest" within a
consortium of consortiums of funds of funds – much like some special purpose "vehicle"
for wealthy investors – and then they lobby governments bye gaslighting them, saying
'We can do this economically and efficiently' and you are clearly running our of money, so
sell this water district to us and we'll get it back on track.' Right. Makes me wonder if
Bojo and his cronies are heavy into waste management. Pun intended.
I can only see a change when laws are adjusted so that executives can face actual jail
time. Spending a few months, if not a few years, in HMP Berwyn or HMP Bronzefield would
definitely not look good on either a resume or on LinkedIn so would concentrate their minds
wonderfully about the hazards of breaking laws. Till then, any penalties are merely
costs-of-doing -business and so are not a great risk.
Prison time for top executives and board members. Real cash on the nail fines, to be paid
in lump sums. Right to recover bonuses and distributions made to shareholders. Forfeiture of
company ownership to the Crown. For starters.
Limited liability is a privilege not a right and if the terms for limited liability isn't
fulfilled then the limited liability can, in some countries under certain conditions, become
unlimited liability. An example, trading while insolvent in Sweden (in Swedish, as the laws
are in Swedish and only concerns Sweden then it is unlikely to be found in many other
languages):
How do you put people who sat around a conference table in a corporation committee meeting
in jail? The entire process is designed and perfected to evade responsibility. Anytime I see something like this I class it as a complete fluke:
While I was reading this I was feeling increasingly obfuscated by the similarities I find
in the publicly-owned privately-managed sewage and waste plants in Madrid. I can easily
understand the frustration of the regulator with managers opacity. Imagine how bored must I
be sometimes, that I annually take a look at the reports that the managers of those plants
produce. These are rubbish reports. You have to spend a lot of time, first trying to
understand the real meaning of some concepts, second to gather the truly relevant variables
in order to assess the real performance of the plants.
I have to say that the situation in Spain must be worse than in the UK because regulators,
if they exist, never come up with auditing results, not to mention noticing misconducts. We
are miles away from being able to even fine those misconducts of which only a few have been
brougth to the public by NGOs.
Interestingly the former progressive Major of Madrid Carmena, now replaced with
conservatives in alliance with xenophobe populists, ordered the first audit (i believe it is
the first) of the waste treatment plant, a huge facility called Valdemingómez. I guess
that the current Major, whose name I don't want to recall, will hide audit results to the
public given that his party set years ago the current model for waste management.
Good waste management/recycling is going to be the industry of the future. Instead of
being publicly contrite about their excessive wealth, the Billionaires should all focus their
resources on fixing what will otherwise be an overwhelming mess. We will all be, as the
military says, "Overtaken by events" someday soon unless we get on top of this. Pollution,
garbage and sewage are the byproducts of our irresponsibility. Coupled with overpopulation.
Not good. Andrew Carnegie donated his money away on good things. Every little town in America
was a beneficiary, with a "Carnegie Library" among other things. But it made us all laugh out
loud when San Francisco named its new water treatment facility the "George W. Bush Sewage and
Water Treatment Facility" (or stg. like that). Unfortunately, the joke is really on us unless
we start demanding improvements and responsibility. The problem is already almost too big to
fix, Houston.
I knew an English guy circa 1999 who was then 35 years old and a hard Thatcherite in his
opinions (didn't do any actual political activism, of course) because the previous Labour
governments had ruined everything to the point that the country had to go to the IMF. He was
no fan of the NHS, either. NHS-reimbursed dentists had done a ton of unnecessary fillings on
him and his young friends as children. Worse, NHS doctors had misdiagnosed a life-threatening
illness for years until American emergency room doctors did a bunch of expensive tests and
cured him.
I wonder what he would have to say 20 years later now that the faults of privatization on
both sides of the Atlantic have been laid bare?
I don't think there is any alternative to constant watchdogging and activism by the
general public.
Sewage treatment is part of health care. Places without adequate sewage treatment suffer rampant diseases in potable water, fish,
animals and people exposed to it. Sewage treatment facilities are the only example of publicly run health care in the
U.S.
Each homeowner, and renter, pays a certain amount for it and it is handled to scientific
standards without a profit motive.
May 20, 2019
Private Equity is a Driving Force Behind Devious Surprise Billings by Eileen Appelbaum Surprise medical bills are in the news almost daily. Last Thursday, the
White House called for legislation to protect patients from getting surprise doctor bills
when they are rushed to the emergency room and receive care from doctors not covered by
insurance at an in-network hospital.
The financial burden on patients can be substantial -- these doctor charges can amount to
hundreds or even thousands of dollars.
What's behind this explosion of outrageous charges and surprise medical bills? Physicians'
groups, it turns out, can opt out of a contract with insurers even if the hospital has such a
contract. The doctors are then free to charge patients, who desperately need care, however much
they want.
This has made physicians' practices in specialties such as emergency care, neonatal
intensive care and anesthesiology attractive takeover targets for private equity firms.
As health reporter Bob Herman observed , acquisition of these health services "exemplifies
private equity firms' appetite for buying health care providers that wield a lot of market
power."
Emergency rooms, neonatal intensive care units and anesthesiologists' practices do not
operate like an ordinary marketplace. Physicians' practices in these specialties do not need to
worry that they will lose patients because their prices are too high.
Patients can go to a hospital in their network, but if they have an emergency, have a baby
in the neonatal intensive care unit or have surgery scheduled with an in-network surgeon, they
are stuck with the out-of-network doctors the hospital has outsourced these services to.
This stands in stark contrast to other health-care providers, such as primary-care
physicians, who will lose patients if they are not in insurers' networks.
It's not only patients that are victimized by unscrupulous physicians' groups. These
doctors' groups are able to coerce health insurance companies into agreeing to pay them very
high fees in order to have them in their networks.
They do this by threatening to charge high out-of-network bills to the insurers' covered
patients if they don't go along with these demands. High payments to these unethical doctors
raise hospitals' costs and everyone's insurance premiums.
That's what happened when private equity-owned physician staffing firms took over hospital
emergency rooms.
A 2018
study by Yale health economists looked at what happened when the two largest emergency room
outsourcing companies -- EmCare and TeamHealth -- took over hospital ERs. They found:
" that after EmCare took over the management of emergency services at hospitals with
previously low out-of-network rates, they raised out-of-network rates by over 81 percentage
points. In addition, the firm raised its charges by 96 percent relative to the charges billed
by the physician groups they succeeded."
TeamHealth used the threat of sending high out-of-network bills to the insurance company's
covered patients to gain high fees as in-network doctors. The researchers found:
" in most instances, several months after going out-of-network, TeamHealth physicians
rejoined the network and received in-network payment rates that were 68 percent higher than
previous in-network rates."
What the Yale study failed to note, however, is that EmCare has been in and out of PE hands
since 2005 and is currently owned by KKR. Blackstone is the once and current owner of
TeamHealth, having held it from 2005 to 2009 before buying it again in 2016.
Private equity has shaped how these companies do business. In the health-care settings where
they operate, market forces do not constrain the raw pursuit of profit. People desperate for
care are in no position to reject over-priced medical services or shop for in-network
doctors.
Private equity firms are attracted by this opportunity to reap above-market returns for
themselves and their investors.
Patients hate surprise medical bills, but they are very profitable for the private equity
owners of companies like EmCare (now called Envision) and TeamHealth. Fixing this problem may
be more difficult than the White House imagines.
America's revolution to a socialist, government-planned society complete with reserve currency helicopter money also known as
"MMT", may or may not be successful but it certainly will be attempted, and every moment will be not only televised but also tweeted.
On Thursday morning, Visa and MasterCard tumbled after the democratic party's "progressive" socialist wing consisting of Bernie
Sanders and Alexandria Ocasio-Cortez, announced they would introduce legislation on Thursday to cap credit card interest rates at
15%, a sharp drop from current levels . The proposal follows not long after AOC also proposed the "Green New Deal" - which among
its various policy proposals urged to give a generous and recurring cash handout to any and every American, regardless if they work
or not, and which according to analysts would cost the US as much as $100 trillion over the next several years.
In addition to a 15% federal cap on interest rates, states could establish their own lower limits, under the legislation.
Sanders, the socialist Vermont senator running for the Democratic nomination for president, told the WaPo in an interview that
a decade after taxpayers bailed out big banks, the industry is taking advantage of the public by charging exorbitant rates. " Wall
Street today makes tens of billions from people at outrageous interest rates," he said.
Ocasio-Cortez, the socialist New York representative who is expected to run for the Democratic nomination for president as soon
as she is eligible, will introduce the House version of the bill.
According to some, the proposal is quite timely, and comes just as credit card rates recently hit an all time high despite artificially
low interest rates, according to Creditcards.com, which has been tracking the data since 2007 and compiles data from 100 popular
cards. The median interest rate was 21.36% last week compared with 20.24% about a year ago and 12.62% about a decade ago, according
to the website.
Rates have been rising fastest for those with the lowest credit scores , said Ted Rossman, an industry analyst for Creditcards.com.
"Issuers are taking an opportunity to charge people with lesser credit a bit more," he said.
https://www.dianomi.com/smartads.epl?id=4855
For borrowers with high credit scores the average rate was 17.73 percent last week compared with 16.71 percent a year ago. For
those with poor credit scores, the average is now about 24.99 percent compared with 23.77 percent a year ago. The difference in the
increase is about 20 basis points higher for customers with a low credit score. A basis point is a common way to measure changes
in percentages.
"It may not sound like that much, but that is just in one year," Rossman said. And even small increases in rates can be crippling
to a cash strapped borrower, he said. "It is the ultimate slap in the face when you're already down."
That may well be, but we wonder what Sanders and AOC will do when the bulk of their supporters, those with the lowest credit rating
and by implication paying the highest interest rates - are de-carded as credit card companies tighten standards "just enough" to
eliminate all those who would be in the 15%+ interest universe anyway . Will they then force credit card companies to issue cheap
(or free) debt to anyone? Inquiring minds want to know...
Meanwhile, considering that in a time of inverted yield curves banks are scrambling for every dollar in interest income, the proposal
is expected to meet stern resistance from the banking industry, which brought in $113 billion in interest and fees from credit cards
last year, up 35 percent since 2012, according to S&P Global Market Intelligence. It also has zero chance of passing the Senate for
at least the next two years, where Republicans hold the majority.
"I am sure it will be criticized," Sanders said of the legislation. "I have a radical idea: Maybe Congress should stand up for
ordinary people."
Quoted
by the WaPo , the 15 percent cap would be the same as the one Congress imposed on credit unions in 1980, Sanders said. (The National
Credit Union Administration, the industry's regulator, raised that cap to 18 percent in 1987 and has repeatedly renewed it at that
higher level.)
Subprime consumers would discover their credit lines would be eliminated overnight. Could create a wave of bankruptcies in
short order. If they really want to crack down they need to start tinkering with the rates these payday loan companies charge.
Interest rate reflects that credit card debt is unsecured. If you cap it, most people will simply not have access to credit
cards as the banks won't take the risk. Next, there will be a bill that ensures everyone has a credit card. Going into debt is
an American past time, right?
Sure, lowering the interest rates banks can charge on credit cards is a good idea - at first glance - but, in reality, it is
simply another "gatekeeper" move. That means addressing a symptom of an issue, rather than it's real causative reason for existing.
The central banking system, and the banks it controls internationally, including the Fed and headquartered in Basil, Switzerland
- is a criminal enterprise designed to transfer the wealth of sovereign nations into the pockets of a tiny minority of fiends,
and in the process, handing over all power to govern victim nations - through the influence of money in politics. This tiny group
of very sick people are behind 90% of the misery and death in this world - including all wars and profits derived therein. Since
they also control the media they have also foisted an incredibly successful mind control program on their victims. Here in the
US, people run around after whatever the latest "big story" is purported to be - always making sure to box themselves into their
manufactured personalities, repeating what they have been programmed to say. Everyone is watching the giant circus, and misses
the machinations of profound evil - resulting in horrific consequences for all life on Earth.
The Fed and the banks need to exposed for what they are and destroyed, and the fiends behind them exposed, stripped of all
assets, and sentenced to hard labor. Unfortunately, the US government and it's various branches of "justice" is owned by said
fiends and would have to be overthrown to do what needs to be done.
Warren Buffett, who has long slammed the hedge fund industry for charging high fees,
escalated his criticism of private-equity firms that have been raising record sums of money in
recent years.
"We have seen a number of proposals from private equity funds where the returns are really
not calculated in a manner that I would regard as honest," Buffett said Saturday at Berkshire
Hathaway Inc.'s annual meeting. "If I were running a pension fund, I would be very careful
about what was being offered to me."
Buffett has a consistent history of blasting asset managers for charging high management
fees and collecting performance fees on gains that sometimes don't beat broader markets. The
presence of private-equity firms looking for leveraged buyouts of companies has also made it
tougher in recent years for Buffett to find large acquisitions for Berkshire.
"We're not going to leverage up Berkshire," Buffett said.
Buffett and Berkshire Vice Chairman Charles Munger criticized how some private equity firms
portray performance. Firms will include money that's sitting in Treasury bills waiting to be
deployed when charging management fees, but will exclude it when calculating a so-called
internal rate of return, the performance measure in which most funds are judged, Buffett
said.
"It makes their return look better if you sit there a long time in Treasury bills," Buffett
said. "It's not as good as it looks."
Munger described the practice as "lying a little bit to make the money come in." He added
that many pensions are picking private equity because they don't have to mark down the value of
the assets as steeply in a downturn, saying that this was "a silly reason to buy
something."
Buffett has previously criticized the use of debt by private equity funds, saying in his
2014 letter
to shareholders that Berkshire offers another, more permanent buyer, when people are looking to
sell their businesses. He acknowledged on Saturday that leveraged investments would outperform
in good environments, but he cited the 1998 collapse of hedge fund Long-Term Capital Management
as an example of the downside.
While some have argued that Berkshire has embedded leverage by being able to use cash flows from
its insurance businesses in acquisitions, Buffett said he wouldn't be adding debt to chase
deals.
"Covenants to protect debt holders have really deteriorated," Buffett said. "I would not get
excited about so-called alternative investments."
-- With assistance by Katherine Chiglinsky, and Hannah Levitt
@ 8 Dan
Yes, I mourn the dimming of Pepe Escobar's brilliance as he churns out article after article
about the fucking silk or belt road, but I guess we have to live and to eat and in Pepe's
case to travel.
Trump was bought by the Zionists a long time ago. He had to go cap in hand to Carl Icahn
in the early 1990s to get bailed out. That's Carl Icahn the famous greenmail crook of the
1980s. Greenmail consisted in buying a large stake in a company and making demands.
Management would then make a very generous offer to just go away, much like the mafia
operate. When greenmail was banned, Icahn carried on terrorizing companies by buying a hefty
stake and demanding a seat on the board. From there he would insist on the sale of a
subsidiary, the proceeds from which would swell his coffers. The company, now reduced in
size, would then be attacked by another hedge fund in the form of a hostile takeover. Icahn
and others, such as Nelson Pelz, were just two of a vast number of Jewish financiers who took
full advantage of the liberalization of financial markets begun by Reagan and Thatcher and
masterminded by Milton Friedman. The huge sums of money gained by private equity/hedge funds
could now be used to finance the political campaigns of those supportive of Zionism, buy up
media and a long etc.
Where I disagree with many on the right and some on the left is in the extent of Jewish
power before this period. It is a tremendously complex area which I try to approach in my
research without prejudice, more like a detective than a historian. I found out surprising
things, such as Jewish people were not allowed into the top gentlemen's clubs in the US until
the 1960s. The whole narrative about the Russian revolution being a totally Jewish conspiracy
is also open to question. Lord Salisbury, three times British Prime Minister and of good
English aristocratic stock (The Cecil family) was talking about fomenting revolution in
Russia as early as 1888.
Private Equity Pillage: Grocery Stores and Workers At Risk
By Eileen Appelbaum & Rosemary Batt
The private equity business model is to strip assets from companies that they acquire. The
latest victims: retail grocery chains.
Since 2015 seven major grocery chains, employing more than 125,000 workers, have filed for
bankruptcy. The media has blamed "disruptors" -- low-cost competitors like Walmart and
high-end markets like Whole Foods, now owned by Amazon. But the real disruptors in this
industry are the private equity (PE) owners who were behind all seven bankruptcies. They have
extracted millions from grocery stores in the last five years -- funds that could have been
used to upgrade stores, enhance products and services, and invest in employee training and
higher wages. As with the bankruptcies of common household names like Toys "R" Us, PE owners
throw companies they own into unsustainable debt in order to capture high returns for
themselves and their investors. If the company they have starved of resources goes broke,
they've already made their bundle.
This is all perfectly legal. It should not be.
The media has blamed "disruptors" like Walmart, Whole Foods, and Amazon for grocery
store bankruptcies. But the real disruptors in this industry are the private equity
owners.
The bankrupted PE-owned grocery chains include East Coast chains A&P/Pathmark,
Fairway, and Tops; West Coast chains Fresh & Easy and Haggen; the Southeastern Grocers
chains (BI-LO, Bruno's, Winn-Dixie, Fresco y Más, and Harveys); and in the Midwest,
Marsh Supermarkets. We could find no comparable publicly traded grocery chains that went
bankrupt during this period....
[ This report is excellent, important but complex and long. A careful reading is warranted
for those interested. ]
THREAD: The retail apocalypse in full swing: Gymboree closes 800 stores, Shopko 105,
Payless 2300, Charlotte Russe 400. What's behind it? Some blame Amazon or changing taste, but
the real culprit is private equity. We'll explain how PE makes money as these businesses
fail. 1/12
Looting: The Economic Underworld of Bankruptcy for Profit
By George A. Akerlof and Paul M. Romer
DURING THE 1980s, a number of unusual financial crises occurred. In Chile, for example,
the financial sector collapsed, leaving the government with responsibility for extensive
foreign debts. In the United States, large numbers of government-insured savings and loans
became insolvent-and the government picked up the tab. In Dallas, Texas, real estate prices
and construction continued to boom even after vacancies had skyrocketed, and then suffered a
dramatic collapse. Also in the United States, the junk bond market, which fueled the takeover
wave, had a similar boom and bust.
In this paper, we use simple theory and direct evidence to highlight a common thread that
runs through these four episodes. The theory suggests that this common thread may be relevant
to other cases in which countries took on excessive foreign debt, governments had to bail out
insolvent financial institutions, real estate prices increased dramatically and then fell, or
new financial markets experienced a boom and bust. We describe the evidence, however, only
for the cases of financial crisis in Chile, the thrift crisis in the United States, Dallas
real estate and thrifts, and junk bonds.
Our theoretical analysis shows that an economic underground can come to life if firms have
an incentive to go broke for profit at society's expense (to loot) instead of to go for broke
(to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation,
or low penalties for abuse give owners an incentive to pay themselves more than their firms
are worth and then default on their debt obligations....
THREAD: The retail apocalypse in full swing: Gymboree closes 800 stores, Shopko 105,
Payless 2300, Charlotte Russe 400. What's behind it? Some blame Amazon or changing taste, but
the real culprit is private equity. We'll explain how PE makes money as these businesses
fail. 1/12
11:31 AM - 19 Apr 2019
Private Equity Pillage details the business model that allows private equity firms to
bankrupt chains, throw workers out of jobs, stiff vendors and still make a profit, in the
context of grocery stores. 2/12
Here's an overview of the business model. Private equity firms have rigged the process so
they can extract profits not only from their investors (often public pension funds) but also
from the companies that it "invests" in. Here's how: 3/12
Investors, using money from public employees' pensions for example, put their $$$ in a
particular private equity fund. Right off the bat, the private equity firm makes a profit
because they collect management fees for just accepting the money. 4/12
The traditional story is that private equity firms invest in already distressed companies.
Yet more and more they are healthy, proven companies that the PE firm then forces to take on
debt (which the company now pays interest on). This erodes its ability to stay competitive.
5/12
On top of the new financial pressures a company faces from this debt, it *also* pays
monitoring fees to the PE firm. It may need to sell assets too, like real estate, and then
pay rent to occupy the buildings it once owned. Where do the proceeds go? Usually, the PE
firm. 6/12
With all this money being siphoned off from the company, it is in a much more difficult
position to compete. 7/12
Case in point: Albertsons, the 2nd largest grocer, struggles to compete, unlike Kroger's
(the largest). The difference? Albertsons is owned by PE firm Cerberus and lacks $$$ to
invest in multi-modal retailing. Kroger's can do all that Amazon-owned Whole Foods does &
more. 8/12
Now in a precarious situation, the company might liquidate, restructure, or be sold. None
might be the PE firm's most desirable outcome, but financial engineering usually ensures that
it comes out on top (and it might be first in line to divvy up assets). 9/12
Even if the PE firm doesn't make money from the bankruptcy, it has made money throughout
the entire process via fees on its investors and the company it acquired, as well as from the
assets the company sold off. The losers? Workers, investors like pension funds, vendors.
10/12
But common sense reforms can help. These could be limiting the debt an acquired company
can take on, being transparent about fees, limiting payments to PE firms in the aftermath of
a buyout, making PE firms joint employers, and protecting workers if a company goes bust.
11/12
Private equity gets away with all of this because of loopholes in current law. But that
doesn't mean what they are doing makes sense for either workers or the economy. We need
reforms that center workers and others taken advantage of in the current PE model. 12/12
The work by Rosemary Batt and Eileen Appelbaum is thorough and important, explaining an
institutionally provoked struggle of traditional retailers to survive that is misunderstood
by economics reporters and seldom understood by economists. That Amazon is not a treat to
traditional retailers needs to be realized. Traditional retailers in China by contrast are
faring well, with Alibaba.
"... Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history. It's not only the fact that his administration has been literally taken over by Goldman Sachs, the top vampire-bank of the Wall Street mafia. ..."
"... The 'anti-establishment Trump' joke has already collapsed and the US middle class is about be eliminated by the syndicate of the united billionaires under Trump administration. ..."
"... Paul Singer whose nickname is "the vulture", he didn't get that nickname because he is a sweet an honest businessman. This is the guy who closed the Delphi auto plants in Ohio and sent them to China and also to Monterrey-Mexico. Donald Trump as a candidate, excoriated the billionaires who sent Delphi auto parts company down to Mexico ..."
"... Paul Singer has two concerns: one of them is that we eliminate the banking regulations known as Dodd–Frank. He is called 'the vulture' cause he eats companies that died. He has invested heavily in banks that died. He makes his billions from government bail-outs, he has never made a product in his life, it's all money and billions made from your money, out of the US treasury ..."
"... The Mercers are the real big money behind Donald Trump. When Trump was in trouble in the general election he was out of money and he was out of ideas and he was losing. It was the Mercers, Robert, who is the principal at the Renaissance Technologies, basically investment banking sharks, that's all they are. They are market gamblers and banking sharks, and that's how he made his billions, he hasn't created a single job as Donald Trump himself like to mention. ..."
"... Both the vulture and the Mercers, they don't pay the same taxes as the rest. They don't pay regular income taxes. They have a special billionaires loophole called 'carried interest'. ..."
"... They were two candidates who said that they would close that loophole: one was Bernie Sanders and the other, believe it or not, was Donald Trump, it was part of his populist movie, he said ' These Wall Street sharks, they don't build anything, they don't create a single job, when they lose we pay, when they win, they get a tax-break called carried interest. I will close that loophole. ' Has he said a word about that loophole? It passed away. ..."
Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history. It's
not only the fact that his administration has been literally taken over by Goldman Sachs, the top vampire-bank of the Wall Street
mafia.
Recently, Trump announced another big alliance with the vulture billionaire, Paul Singer, who, initially, was supposedly against
him. It looks like the Trump big show continues.
The 'anti-establishment Trump' joke has already collapsed and the US middle class is about be eliminated by the syndicate of the
united billionaires under Trump administration.
As Greg Palast told to Thom Hartmann:
Paul Singer whose nickname is "the vulture", he didn't get that nickname because he is a sweet an honest businessman. This
is the guy who closed the Delphi auto plants in Ohio and sent them to China and also to Monterrey-Mexico. Donald Trump as a candidate,
excoriated the billionaires who sent Delphi auto parts company down to Mexico.
Paul Singer has two concerns: one of them is that we eliminate the banking regulations known as Dodd–Frank. He is called 'the
vulture' cause he eats companies that died. He has invested heavily in banks that died. He makes his billions from government bail-outs,
he has never made a product in his life, it's all money and billions made from your money, out of the US treasury.
He is against what Obama created, which is a system under Dodd–Frank, called 'living wills', where if a bank starts going bankrupt,
they don't call the US treasury for bail-out. These banks go out of business and they are broken up so we don't have to pay for the
bail-out. Singer wants to restore the system of bailouts because that's where he makes his money.
The Mercers are the real big money behind Donald Trump. When Trump was in trouble in the general election he was out of money
and he was out of ideas and he was losing. It was the Mercers, Robert, who is the principal at the Renaissance Technologies, basically
investment banking sharks, that's all they are. They are market gamblers and banking sharks, and that's how he made his billions,
he hasn't created a single job as Donald Trump himself like to mention.
Both the vulture and the Mercers, they don't pay the same taxes as the rest. They don't pay regular income taxes. They have a
special billionaires loophole called 'carried interest'.
They were two candidates who said that they would close that loophole: one
was Bernie Sanders and the other, believe it or not, was Donald Trump, it was part of his populist movie, he said ' These Wall
Street sharks, they don't build anything, they don't create a single job, when they lose we pay, when they win, they get a tax-break
called carried interest. I will close that loophole. ' Has he said a word about that loophole? It passed away.
His political activities include funding the Manhattan Institute for Policy Research and he has written against raising taxes
for the 1% and aspects of the Dodd-Frank Act. Singer is active in Republican Party politics and collectively, Singer and others affiliated
with Elliott Management are "the top source of contributions" to the National Republican Senatorial Committee.
A number of sources have branded him a "vulture capitalist", largely on account of his role at EMC, which has been called a vulture
fund. Elliott was termed by The Independent as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going
after countries for unpaid debts", and in 1996, Singer began using the strategy of purchasing sovereign debt from nations in or near
default-such as Argentina, ]- through his NML Capital Limited and Congo-Brazzaville through Kensington International Inc. Singer's
business model of purchasing distressed debt from companies and sovereign states and pursuing full payment through the courts has
led to criticism, while Singer and EMC defend their model as "a fight against charlatans who refuse to play by the market's rules."
In 1996, Elliott bought defaulted Peruvian debt for $11.4 million. Elliott won a $58 million judgment when the ruling was overturned
in 2000, and Peru had to repay the sum in full under the pari passu rule. When former president of Peru Alberto Fujimori was attempting
to flee the country due to facing legal proceedings over human rights abuses and corruption, Singer ordered the confiscation of his
jet and offered to let him leave the country in exchange for the $58 million payment from the treasury, an offer which Fujimori accepted.
A subsequent 2002 investigation by the Government of Peru into the incident and subsequent congressional report, uncovered instances
of corruption since Elliott was not legally authorized to purchase the Peruvian debt from Swiss Bank Corporation without the prior
approval of the Peruvian government, and thus the purchase had occurred in breach of contract. At the same time, Elliott's representative,
Jaime Pinto, had been formerly employed by the Peruvian Ministry of Economy and Finance and had contact with senior officials. According
to the Wall Street Journal, the Peruvian government paid Elliott $56 million to settle the case.
After Argentina defaulted on its debt in 2002, the Elliott-owned company NML Capital Limited refused to accept the Argentine offer
to pay less than 30 cents per dollar of debt. With a face value of $630 million, the bonds were reportedly bought by NML for $48
million, with Elliott assessing the bonds as worth $2.3 billion with accrued interest. Elliott sued Argentina for the debt's value,
and the lower UK courts found that Argentina had state immunity. Elliott successfully appealed the case to the UK Supreme Court,
which ruled that Elliott had the right to attempt to seize Argentine property in the United Kingdom. Alternatively, before 2011,
US courts ruled against allowing creditors to seize Argentine state assets in the United States. On October 2, 2012 Singer arranged
for a Ghanaian Court order to detain the Argentine naval training vessel ARA Libertad in a Ghanaian port, with the vessel to be used
as collateral in an effort to force Argentina to pay the debt. Refusing to pay, Argentina shortly thereafter regained control of
the ship after its seizure was deemed illegal by the International Tribunal for the Law of the Sea. Alleging the incident lost Tema
Harbour $7.6 million in lost revenue and unpaid docking fees, Ghana in 2012 was reportedly considering legal action against NML for
the amount.
His firm... is so influential that fear of its tactics helped shape the current 2012 Greek debt restructuring." Elliott was termed
by The Independent as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going after countries for unpaid
debts", and in 1996, Singer began using the strategy of purchasing sovereign debt from nations in or near default-such as Argentina,
Peru-through his NML Capital Limited and Congo-Brazzaville through Kensington International Inc. In 2004, then first deputy managing
director of the International Monetary Fund Anne Osborn Krueger denounced the strategy, alleging that it has "undermined the entire
structure of sovereign finance."
we wrote that " Trump's rhetoric is concentrated around a racist delirium. He avoids to take direct position
on social matters, issues about inequality, etc. Of course he does, he is a billionaire! Trump will follow the pro-establishment
agenda of protecting Wall Street and big businesses. And here is the fundamental difference with Bernie Sanders. Bernie says no more
war and he means it. He says more taxes for the super-rich and he means it. Free healthcare and education for all the Americans,
and he means it. In case that Bernie manage to beat Hillary, the establishment will definitely turn to Trump who will be supported
by all means until the US presidency. "
Yet, we would never expect that Trump would verify us, that fast.
Robert Samuelson Ignores Role of Hedge Fund Magnate Eddie Lampert in Sears Decline
By Eileen Appelbaum
In today's column, * Robert Samuelson attributes Sears bankruptcy and possible
liquidation- the final chapter in a saga that has already cost 200,000 workers their jobs
– to the department store chain's inability to adapt to competition with big box stores
and the Internet. Apparently, he has never heard of Eddie Lampert and his ESL hedge fund,
which took over Sears and Kmart in 2006 and ran the company, now known as Sears Holdings as
an ATM for himself and his investors. Lampert may not have known anything about retailing,
but as Sears' CEO he had no qualms about monetizing it assets for his own and his wealthy
investors' benefit – including Treasury Secretary Steve Mnuchin who was an investor in
his hedge fund and served on the Sears board for 12 years as the retailer spiraled
downward.
In its most egregious act of financial engineering, Lampert's hedge fund setup a real
estate company, Seritage Growth Properties, with Lampert as Chairman of Seritage's board. In
2015, Lampert as CEO of Sears sold 266 Sears and Kmart stores located on prime real estate to
Seritage, where he was Chairman of the Board. Seritage shuttered stores and developed the
real estate into high-priced new developments - offices for the burgeoning high tech sector
in Santa Monica, a luxury shopping center in Aventura, Florida. Sears creditors are in court
over this self-dealing by Lampert, claiming he cheated them out of $2.6 billion.
If Samuelson took the time to read his own newspaper, he could have learned about the
business model of investment funds – private equity and hedge funds – that take
over Main Street companies from Peter Whoriskey's investigative reporting on the bankruptcy
of Marsh, a major mid-West grocery chain. Amazon, Walmart and the Internet certainly pose a
challenge, but the inability of companies to respond can be laid squarely at the feet of
investment funds that load the companies they own with unsustainable levels of debt and that
take resources out of the company by selling off its real estate.
As I show ** in a comparison of the largest supermarket chain in America, the very
successful publicly traded Kroger's, and the second largest, floundering private equity owned
Albertsons, large, iconic retail companies can respond to competitive challenges when they
control their own resources, own their own real estate, and keep their debt levels
manageable.
Samuelson attributes the demise of Sears to changes in capitalism and competition without,
apparently, having ever heard of hedge funds and private equity funds that take over the
management of companies and run them in the interests of investors in their funds, with
little regard for the companies' ability to compete or its workers.
Perhaps the Washington Post should set as a minimum requirement for its columnists that
they actually read the newspaper.
Montgomery-Ward, the original mail-
order 'dry goods' store (1872-2001)
Wikipedia: Montgomery Ward was founded by Aaron Montgomery Ward in 1872. Ward had
conceived of the idea of a dry goods mail-order business in Chicago, Illinois, after several
years of working as a traveling salesman among rural customers. He observed that rural
customers often wanted "city" goods, but their only access to them was through rural
retailers who had little competition and did not offer any guarantee of quality. Ward also
believed that by eliminating intermediaries, he could cut costs and make a wide variety of
goods available to rural customers, who could purchase goods by mail and pick them up at the
nearest train station. ...
Bankruptcy in 2000; Full liquidation in 2001
namesake retailer launched in 2004
after purchase of trademarks
"... The record of deceit and deception that has surfaced in just the past two months points to yes. ..."
"... You want to get really, really pissed off? Then read " Major Banks Aid in Payday Loans Banned by States " by Jessica Silver-Greenberg in the New York Times ..."
"... The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate. ..."
"... Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury ..."
"... Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. ..."
"... Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding, abetting and profiting from screwing loanshark victims. ..."
"... What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit. Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary, dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit that precise scam again. ..."
The record of deceit and deception that has surfaced in just the past two months points to yes. Print 147
COMMENTS Photo Credit: Songquan Deng / Shutterstock.com
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn't we seize their assets, just like we do to drug
cartels?
Let's examine their sorry record of deceit and deception that has surfaced in just the past two months:
Loan Sharking
You want to get really, really pissed off? Then read "
Major Banks Aid in Payday Loans Banned by States " by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening
detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday
loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500
percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent.
See the list .)
The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals
from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks
could not operate.
Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the
first place.
For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source
of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems
like overdrafts.
Roughly
27 percent of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released
this month by the Pew Charitable Trusts. That fee income is coveted, given that
financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.
Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury.
Then Chase vultures the victims,
who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. So impoverished
single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest
rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.
For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support
income. She said she applied for a $400 loan from Loanshoponline.com
and a $700 loan from Advancemetoday.com in 2011. The loans, with annual
interest rates of 730 percent and 584 percent respectively, skirt New York law.
Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the
lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase
charged her $812 in fees and deducted over $600 from her child-support payments to cover them.
Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding,
abetting and profiting from screwing loanshark victims.
What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit.
Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they
figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary,
dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from
the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit
that precise scam again.
(Update: After the publication of Jessica Silver-Greenberg's devastating article, Jamie Dimon "vowed on Tuesday to change how
the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers' checking accounts,"
according to the New York Times . Dimon called the practices "terrible." In a statement, the bank said, it was "taking a thorough
look at all of our policies related to these issues and plan to make meaningful changes.")
Money Laundering for the Mexican Drug Cartels and Rogue Nations
HSBC, the giant British-based bank with a large American subsidiary, agreed on Dec. 11, 2012 to pay $1.9 billion in fines for
laundering $881 million for Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel. The operation was so blatant that "Mexican
traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis,"
reports Reuters . They
also facilitated "hundreds of millions more in transactions with sanctioned countries,"
according to the Justice Department
.
Our banks got nailed as well. "In the United States, JPMorgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for
anti-money laundering lapses or sanctions violations," continues the Reuters report. My, my, JPMorgan Chase, the biggest bank in
the U.S. sure does get around.
And the penalty? A fine (paid by the HSBC shareholders, of course, that amounts to 5.5 weeks of the bank's earnings) and we promise
– honest -- never to do it again.
Too Big to Indict?
Wait, it gets worse. Why weren't criminal charges filed against the bank itself? After all, the bank overtly violated money laundering
laws. This was no clerical error. The answer is simple: "
Too big to Indict," screams
the NYT editorial headline. You see federal authorities are worried that if they indict, the bank would fail, which in turn would
lead to tens of thousands of lost jobs, just like what happened to Arthur Anderson after its Enron caper, or like the financial hurricane
that followed the failure of Lehman Brothers. So if you're a small fish running $10,000 in drug money, you serve time. But if you're
a big fish moving nearing a billion dollars, you can laugh all the way to your too-big-to-jail bank.
Fleecing Distressed Homeowners
The big banks, in collusion with hedge funds and the rating agencies, puffed up the housing bubble and then burst it. Nine million
workers, due to no fault of their own, lost their jobs in a matter of months. Entire neighborhoods saw their home values crash. Tens
of millions faced foreclosure.
The big banks, which were bailed out and survived the crash, sought to foreclose on as many homes as possible, as fast as possible.
Hey, that's where the money was. In doing so they resorted to many unsavory practices including illegal robo-signing of foreclosure
documents. When nailed by the government, the big banks agreed to provide billions in aid for distressed homeowners. Were they finally
forced to do the right thing? Not a chance. (See "
Homeowners still face foreclosure despite billion in aid" NYT 2/22 .)
The big banks, despite what they say in their press statements, found a convenient loophole in the government settlement. The
banks began forgiving second mortgages, and then foreclosing on the first mortgage. That's a cute maneuver because in a foreclosure,
the bank rarely can collect on the second mortgage anyway. So they're giving away something of no value to distressed sellers and
getting government credit for it. Just another day at the office for our favorite banksters.
JPMorgan Chase, Citigroup and Goldman Sachs have been fined over a billion dollars for creating and selling mortgage-related securities
that were designed to fail so their hedge fund buddies could make billions. And then we've got the recent LIBOR scandal where the
biggest banks colluded to manipulate interest rates for fun and profit.
It's not about good people or bad people running these banks and hedge funds. It's the very nature of these institutions. That's
what they do. They make big money by doing what the rest of us would call cheating. As the record clearly shows, they cheat the second
they get the chance.
What kind of institution would loanshark, money launder, fix rates, game mortgage relief programs, and produce products designed
to fail? Answer: An institution that should not exist.
Nationalize Now and Create State Banks
There are about 20 too-big-to fail banks which have been designated "systematically significant." These should be immediately
nationalized. Shareholder value should be wiped out because these banks are repeatedly violating the law, including aiding and abetting
criminal enterprises. All employees should be placed on the federal civil service scale, where the top salary is approximately $130,000.
Can the government run banks? Yes, if we break up the big banks and turn them over to state governments so that each state would
have at least one public bank. (North Dakota has a strong working model.) The larger states would have several public state banks.
But never again would we allow banks to grow so large as to threaten our financial system and violate the public trust. Let FDIC
regulate the state banks. They're actually good at it.
(We'd also have to do something about the shadow banking industry -- the large hedge funds and private equity firms. Eliminating
their carried-interest tax loophole and slapping on a strong financial transaction tax would go a long way toward reining them in.)
Won't the most talented bankers leave the industry?
Hurray! It can't happen soon enough. It's time for the best and the brightest to rejoin the human race and help produce value
for their fellow citizens. Let them become doctors, research scientists, teachers or even wealthy entrepreneurs who produce tangible
goods and services that we want and need. What we don't need are more banksters.
Isn't This Socialism?
We already have socialism for rich financiers. They get to keep all of the upside of their shady machinations and we get to bail
them out when they fail. This billionaire bailout society is now so entrenched that our nascent economic recovery of the last two
years has been entirely captured by the top 1 percent. Meanwhile the rest of have received nothing. Nada. (See
"Why Is the Entire Recovery
Going to the Top One Percent? ")
I know, I know, people say, "Next time, just don't bail them out!" Meanwhile, they get to rip us off, day in and day out, until
the next crash? No thanks. Put them out of business now. If you have a better idea, let's hear it.
So what are we going to do about this? I fully agree with the assessment of this article and even the solution. State banks
would make very positive contributions to replacing these criminal enterprises. But, you have to understand that the Bank of North
Dakota was instituted in a time where the populist farmers were in a battle with the same criminal Banksters of the 1800/early
1900s. Thankfully, they succeeded in establishing their bank and it has shown us how well it works, even in a Red state like ND.
So, why is it that the dumbfuck Dems don't overwhelmingly endorse them? Two years ago, I publicly endorsed (as a citizen) state
banks as a solution to the financial problems for my state (Idaho), citing the BND as a model to follow. Who do you think gave
me the most shit about it? It wasn't the Idaho GOP, it was a Dem state senator who downplayed the state bank idea and pinned the
success that ND had on its shale oil production and proclaimed that Idaho needs to exploit its own natural resources more. Well,
they are. We are now going to start fracking for nat gas in Payette County. Dems and GOP alike here are endorsing the fracking
of our land. The sad fact is that there is not very much nat gas here to get excited about. We have nowhere near what ND has in
plays.
And, the Dems here completely miss the point of what a state bank can do for you
Try the last three centuries. They have absolute power as they control every nation's money supply and could if they wished
crash the economy next Tuesday. They can drag out a recession for years and have the ability to determine if you have job or not.
As the axiom about absolute power goes so goes the banking/financial business. Robbers and pond scum who just happen to know how
the system works but have no idea of what life is about.
"Globalism" is their mantra. Globalism is code for the Darwinian truth the elites pray to; which is their superiority giving them
the right to acquire ever increasing wealth always at any cost to other life or life support system. This IS their sum total understanding
of the meaning of existence. They laugh at our collective utter blind stupidity. If you haven't viewed "Money as Debt" on youtube
better have a boo. Then have a look at "The Money Masters" to see how the elites managed their take over of America and are now
going for the world.
"It is well enough that the people of the nation do not understand our banking and monetary system, for if they did I believe
we would have a revolution before tomorrow morning."
Henry Ford
It is mandated fleecing by the likes of Bank of America in the state of Maryland- beginning January of this year, all child
support is handled by BoA via an "Epic" atm card... just one of the many ways they will skim from the people collecting support
for their kids is the 1 time per week atm rule for withdrawing cash- after that- $5 per transaction.
This is coordinated robbery with state legislature and the big banks... and it is abhorrant.
You want more examples - read Zero Day Threat by Ocheedo & Swartz (2009). That book peels back the curtain on the entire bank
card vs credit data corporation vs congressional enablers. And it's easy to read as it tracks a bunch of Canadian meth heads in
their successful efforts to steal our identities and then take our money and put it into fake bank accounts.
A reminder that the WASP society has it's roots in Darwin's theory of the survival of the fittest which has been taken to new
heights lately to mean one is considered savvy if they are able to rob the meek and humble honest guy, the honest Abe's are just
too week minded, so the pain is internalized turned into self-blame "i guess i was too dumb to fall for it". I suggest the old
saying to put your hand into the tiger's mouth and take back what's yours. People are too damn dismissive and artificially programmed
to confuse nationalism with wall street thievery which they associate to the government and dare not criticize their USA government,
that would be unpatriotic and rebel rousing. I say hang the bastards all the way from Houston Texas to Los Angeles California
on every power pole from which they have stollen billion's of people's money by faking those "rolling blackouts". Authoritarianism
begets authoritarianism.
Not only are the banks a criminally organized mafia, there are more. For instance does anybody here know that there are two
mafia organizations in Italy? Let me explain to the novices here especially the knowledge challenged tea bagers cons repubics.
One mafia is in souther Italy in sicily which everyone knows including the dumbest tea bagers cons. The other one is in northern
Italy near Roma and is called the vatican where everything which goes on in southern Italy mafia also goes on here from money
laundering, power abuse from the top, human rights violation like converting all and sundry in foreign lands especially the vulnerables
and so on and on.
Yes they are criminals.....they just have laws that saya its ok to use people and steal from them unlike your average street
criminals.
The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution
so the second will not become the legalized version of the first.
I believe that banking institutions are more dangerous to our liberties than standing armies.
~Thomas Jefferson~
When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since
the hand that gives is above the hand that takes Money has no motherland; financiers are without patriotism and without decency;
their sole object is gain." – Napoleon Bonaparte, Emperor of France, 1815
Are these banks operating as criminals? Not really when you understand that they own lock, stock and barrel those who make
the laws. So if some pesky law was out there that prevented these capitalists from sucking every ounce of our blood they will
pay a meager fine, for appearances, and then bring the politicians and lawyers into their offices and tell them to change the
law. The government will obey as they know who the owners are.
Now let's talk about justice. When we get to that we see the whole system is so corrupt that there is no reform possible- if
you could fix it you wouldn't want to anyway.
Look, nowadays there is very little conspiratorial in any of this. They are doing it so blatantly out in the open and in our
faces it's as if they are challenging the people to stand up and fight back. So far not much resistance on the streets of the
Homeland.
I think it's also futile to attempt regulations or ask for any legal oversight. This is like the proverbial fox guarding the
hen house. The police will not police themselves. It's up to us.
Welcome to the world where businesses can 'regulate themselves'. I've said for decades that the business community is only
as socially responsible as they are legally required to be. The white collar criminal class has, like scum, risen to the top.
The first clue was the savings and loans collapse during King George the firsts rule. The creation of these entites came about
from the Reaganistas anti-regulation frenzy within the banking industry. They milked the system until it collapsed but very few
paid any price. Most actually made out like the bandits they were from THAT taxpayer bailout. So the pattern was set. Even the
Democratic party fell into lockstep because so much money could be legally stolen by these machinations. Of course, in order to
hide the fallout they had to change how inflation and unemployment was calculated.
This was all as predictable as the sunrise.
This is not a revelation - that big banks are little more than organized crime whose bosses dress in better suits, live at
better addresses and have more money than most people in organized crime ever dreamed of because these criminals are protected
by law and by the fact that even when the break what few laws there are that seriously affect them, they are simply not prosecuted.
After all who is going to launder the trillion or so dollars in drug money every year for handsome profits - as much as 20% sometimes.
Who is going to facilitate the transfer of laundered and other money in the international sale of hundreds of billions of dollars
in weapons to dictators, warlords and various other sleazebags around the world? The banks have an absolutely necessary role to
play in the Western World where Corruption is the norm in all businesses and banking operations that are bigger than one person.
Private banks need to be abolished and private bankers need to be in prison for life.
The current banking and economic system that is in place operates outside normal perception. Look at how Barclays was manipulating
interest rates to favour their investments and to charge others more. Geee I wonder if the other banks and investment houses did
the same? Toxic derivatives being sold as great investments knowing that they are going to fail. Goldman Sachs complicit in hiding
Greek debt for decades. Hyper trading where algorithms and nano second trading drive market values. These elite hyper traders
never seem to lose money.
The system is broken and those few benefiting from it do not want it to change.
We need to re-envision our world. I want a system where legislation benefits citizens, not corporations. I want legislation
that ensures the best possible results for the most people. I am not opposed to capitalist style economic system that serves a
citizenry needs. I am opposed to an economic system that has us serving it.
It seems it is only going to get worse. We have people trying to privatize education. Their goal is not better education but
a profit. The same people want a larger privatized penal system. Not to protect society and rehabilitate, but to generate profit.
We have this system in place in the health care industry. It does not get us better health care, it gets u more expensive health
care.
We seriously need to rethink how our economy functions, our society, etc....
Yes, Mo -- privatizing ed's about profit. But also about the new corporate religion.
Privatized schools play much more into the hands of admin. Teaching itself gets more niched into the specialized departments
whereby the specialists model the habits and reduced language of never looking into anything in anyone else's cubicles.
So few and so much rarer are the tenured posts in all these turfs that careerists will readily shear themselves of all ethics
in order to conform to the safe and orthodox. So will the many tens of thousands of Ph.D. contingent labor, who increasingly wither
in academe's vast corporate gulag.
Yes, you're so correct -- it's money that drives these massively amoral and immoral of high finance. But idolatry's more than
money. It's also the steroided vulgarized corporate religion. And it's rotting all ed, so the weakest rise to the top, and now
all K-12, too, becomes enablers of the standardized numbers rackets.
I would gladly award the DEATH penalty to the crooks who run Bank of America and Wells Fargo, two criminal organizations with
whom I have had dealings.
Bank of America: Too Crooked to Fail Rolling Stone Magazine / by Matt Taibbi
The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep
bailing it out?
http://www.rollingstone.com...
And:
"It's Time to Break Up AT&T, Verizon, Comcast, Time Warner and the Rest of the Telecoms." AlterNet / By David Rosen and Bruce
Kushnick
Today's telecoms provide overpriced and inferior service, and are systematically overcharging the hapless American consumer.
http://www.alternet.org/new...
"How the Phone Companies Are Screwing America: The $320 Billion Broadband Rip-Off" AlterNet / By David Rosen and Bruce Kushnick
Americans are stuck with an inferior and overpriced communications system, compared with the rest of the world, and we're being
ripped off in the process.
Great article. Spot on. Democrats used to be wary of the bankers, knowing that they needed to be watched and controlled. Regulated
banking is something necessary for an economy to run, with the emphasis on regulated. But, the banks have bought the regulators,
the "people's party," the democrats are sleeping with the bankers, and we are all paying the price.
Time to separate investment banking from commercial banking.
Time to enforce usury laws, including "fees" as part of the interest rate calculation
and, way past time to nationalize or simply yank the charters from the offending banks.
Clear, simple; and exactly what folks in Washington cannot understand.
The democrats? Who was it presided over this between 2000 and 2008, allowing it and creating laws to ensure the banks succeeded
in their ripoff? And who is currently standing in the way of any forward momentum? Republicans. Tea Party, Koch -funded Republicans
and their "Libertarian" network of slimeballs. Who was it pushing for the repeal of Glass-Steagall that made all of this possible?
Koch and their "Libertarian" slimeball network of free marketeers.And who was it that made the situation worse by getting more
of these aholes elected in 2010 and pretty much ensurig that nothing will get ccomplished? "Progressives" and "Libertarian" shysters
who were out in force yelling "both sidess are the same" - "don't vote."
And I see we're still at it in spite of everything we've witnessed the Tea Party do both at the federal and state levels.
But it's in alignment with the new, 21st century Neo-Fascist America.
Debtor prisons were eliminated more than a century ago because legislators had the sense (yes, they had some back then) to
understand that society is worse off, and no one benefits by putting those who can't pay their debts in prison. The burden was
thus shifted to creditors to assure their debtors could repay them before making the loan. The burden of indebtedness was thus
shifted from the debtor to the creditor as it should be.
In recent years the US has gone back to the old model of encouraging indebtedness and then punishing the debtors, initially
with non-bankruptable debt (thank you Joe Biden) and now with imprisonment.
There is absolutely nothing progressive or good for society in general or for individuals in particular in all of this. This
is all part of the reactionary movement in this country to destroy the Middle-class and return to a (neo) feudal society controlled
by a small class of "economic royalist" lording over a vast majority of disenfranchised and economically hopeless "serfs".
Six years after these criminals crashed the economy and almost took down the entire global structure we're still trying to
decide if these were crimes? The real crime is that We, the People meekly allow these crimes -and many others- to go unpunished.
After all, it really doesn't interest anybody outside of a small circle of friends.
Well put. If the mainstream media doesn't say something, the general population acts like it doesn't exist. The rich and powerful
have been very creative in hijacking public opinion and decimating our ability to think for ourselves. We are supposed to have
checks and balances between branches of government, but every single branch has been bought out and is in cahoots with each other.
I don't think anything short of a revolution will fix this corporatocracy. The White House has abandoned us, Congress has abandoned
us, and the Supreme Court has struck the final chord of war claiming that corporations are to be treated as people.
How much is your life worth? Not much if you aren't a politician or banker.
Neo Conned, look around you; look at the morons glued to their "smart" phones. Look at the idiots with their pants hanging
off their butts; listen to the people who can't put together a sentence in Standard English or who can't say two consecutive words
without at least one of them being a vulgar Anglo-Saxon term for a bodily function.
In general, Americans are probably the stupidest people in the world and we have lost our (at least at one time nominal) democratic
republic because of that: the obliviousness of the American people. (For reference please see Chris Hedges' excellent book, The
End of Reason and the Triumph of Illusion.)
"... L.A City Attorney Mike Feuer announced a $185 million settlement reached with Wells Fargo, after thousands of bank employees siphoned funds from their customers to open phony checking and savings accounts raking in millions in fraudulent fees. ..."
"... So where is the FBI? Where is the Department of Justice? How about California Attorney General Kamala Harris? Too busy campaigning for the Senate to notice? How about L.A. District Attorney Jackie Larry? ..."
"... Only City Attorney Mike Feuer took action, and he only has the authority to prosecute misdemeanors ..."
"... multi-billion dollar ..."
"... If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest man today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere. ..."
"... A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday. ..."
"... In a survey of 500 senior executives in the United States and the UK ..."
"... , 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful ..."
Organized crime. This phrase is now a precise synonym for big-banking in the United States.
These Big Banks commit big crimes; they commit small crimes. They cheat their own clients; they
swindle outsiders. They break virtually every financial law on the books. What do all these
crimes have in common? The Big Banks commit all these crimes
again and
again and
again – with utter impunity.
These fraud factories commit their serial mega-crimes, year after year, because the Big
Banks know that they will never, ever be punished. On rare occasions, their crimes have been so
egregious that U.S. 'justice' officials could no longer pretend to be oblivious to them. In
such cases, there was a token prosecution, there was a settlement where the law-breaking banks
didn't even have to acknowledge their own criminality, and there was a microscopic fine –
which didn't even force the felonious financial institutions to disgorge all of their profits
from these crimes.
Criminal sanctions, by definition, are supposed to deter criminal conduct.
The token prosecutions against U.S. Big Banks didn't deter Big Bank crime, they encouraged it.
But even these wrist-slaps were becoming embarrassing for this crime syndicate, so they dealt
with this problem. The Big Bank crime syndicate told
its lackeys in the U.S. 'justice' department that they were not allowed to prosecute one of its
tentacles, ever again.
The lackeys, as always, obeyed their Masters, and issued
a new proclamation . The U.S. 'Justice' Department would never prosecute a U.S. Big Bank
ever again – no matter what crimes it committed, no matter how large the crimes, no
matter how many times the same Big Banks committed the same crimes. Complete, legal immunity;
totally above the law. A literal culture of crime.
What happens when you create a culture of crime in (big) banking? Not only the banks break
laws – with impunity – their bank employees do so as well. Case in point:
Warren Buffett's favorite Big Bank – Wells Fargo. Wells Fargo employees came up with
a good idea for boosting their salaries: stealing money directly out of the accounts of
the bank's clients .
Consider how large this crime became, in just one of these tentacles of organized crime.
L.A City Attorney Mike Feuer announced a $185 million settlement reached with Wells
Fargo, after thousands of bank employees siphoned funds from their customers to open
phony checking and savings accounts raking in millions in fraudulent fees.
[emphasis mine]
Thousands of bank employees stealing millions of dollars from bank customers, in tiny,
little increments, again and again and again. But the story gets much worse. Why was a lowly
city attorney involved with the prosecution of this organized crime?
So where is the FBI? Where is the Department of Justice? How about California
Attorney General Kamala Harris? Too busy campaigning for the Senate to notice? How about L.A.
District Attorney Jackie Larry?
Only City Attorney Mike Feuer took action, and he only has the authority to prosecute
misdemeanors
There are only two ways in which the non-action of the U.S. pseudo-justice system can be
explained:
Take your pick. The U.S. pseudo-justice system is used to seeing so many
multi-billion dollar mega-crimes being committed by these fraud factories that
the systemic crime at Wells Fargo (which was 'only' in the $millions) didn't even attract their
attention. Or, the entire U.S. pseudo-justice system is completely bought-off and corrupt
– and they refuse to prosecute Big Bank organized crime .
A culture of crime.
It gets still worse. Thousands of Wells Fargo employees stole
millions of dollars, from countless clients. They were caught. But not even one
banker was sent to jail. In a real justice system, systemic crime of this nature would/could
only be prosecuted in one of three ways. Either every Wells Fargo criminal would be prosecuted
to the full extent of the law (given the egregious nature of the crime), or Wells Fargo
management would be prosecuted – because they would have/should have known about this
crime-wave. Or else both.
Bankers stealing money, directly and brazenly, right out of customer accounts, but no one
goes to jail? A culture of crime.
Understand that endemic, cultural changes of this nature don't originate at the bottom of
the corporate ladder. They originate at the top. In the case of the Wall Street crime
syndicate; we already know that their management personnel are criminals, because they have
admitted to
being criminals.
Many Wall Street executives says [sic] wrongdoing is necessary: survey
If the ancient Greek philosopher Diogenes were to go out with his lantern in search
of an honest man today, a survey of Wall Street executives on workplace conduct suggests he
might have to look elsewhere.
A quarter of Wall Street executives see wrongdoing as a key to success, according to
a survey by whistleblower law firm Labaton Sucharow released on Tuesday.
In a survey of 500 senior executives in the United States and the UK
[New York and London] , 26 percent of respondents said they had observed or had
firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed
financial services professionals may need to engage in unethical or illegal conduct to be
successful [emphasis mine]
One-quarter of Big Bank management admitted that they "need" to commit crimes. A culture of
crime. More needs to be said about the rampant, disgusting criminality among upper management
in the Big Banks of the U.S. (and UK).
A known whistleblower was conducting a public survey, asking known criminals how many of
them were engaging in criminal behavior. What percentage of respondents would
lie when answering such a survey? Three-quarters sounds about right.
One-quarter of Wall Street executives admitted that committing crimes was a way of life. The
other three-quarters lied about their criminal acts.
Monkey see; monkey do. The lower level foot soldiers see their Bosses breaking laws, with
impunity, on a daily basis. Their reaction, at Wells Fargo? "Me too."
Most if not all of the Wall Street fraud factories conduct detailed "personality testing" on
their bank personnel. Are they looking to weed-out those with criminal (if not psychopathic)
inclinations? Of course not. They conduct this personality testing to find which employees have
no reservations about engaging in criminal conduct – so they can be fast-tracked
for promotion .
There is no other way in which the systemic criminality of senior banking personnel can be
reconciled with the detailed personality-testing in which they participated, in order to reach
that level of management. The Wall Street fraud factories look for the most amoral criminals
which they can find. And with the exorbitant, ludicrous "compensation" they award to these
criminals for their systemic crimes, they end up with (literally) the best criminals that money
can buy.
A culture of crime.
As a final note; the U.S. system of pretend-justice already has a powerful weapon in its
arsenal to fight organized crime: the "RICO" act.
This anti-racketeering statute was created for one, precise purpose: to not merely
prosecute/punish organized crime, but to literally dismantle the crime
infrastructure which supports the organized crime.
Not only does the statute confer strong (almost limitless) powers in gathering evidence of
organized crime, it also permits mass seizures of assets – anything/everything connected
to the organized crime of the entity(ies) in question. In the case of the Big Bank crime
syndicate, where all of its operations are directly/indirectly tied into criminal operations of
one form or another, if RICO was turned loose on these fraud factories, by the time the dust
had settled there would be nothing left.
Oh yes. If the U.S. 'Justice' Department ever went "RICO" on U.S. Big Banks, lots and lots
and lots of bankers would go to prison, for a very, long time.
"... By Jang-Sup Shin, professor of economics at the National University of Singapore and a senior research associate at the Academic-Industry Research Network. This blog post draws on his INET working paper, "The Subversion of Shareholder Democracy and the Rise of Hedge-Fund Activism," which is in turn part of a forthcoming book with William Lazonick on predatory value extraction. Originally published at the Institute for New Economic Thinking website ..."
By Jang-Sup Shin, professor of economics at the National University of Singapore and a senior research associate at the Academic-Industry
Research Network. This blog post draws on his INET working paper, "The Subversion of Shareholder Democracy and the Rise of Hedge-Fund
Activism," which is in turn part of a forthcoming book with William Lazonick on predatory value extraction. Originally published
at the Institute for New
Economic Thinking website
The casual observer can hardly comprehend the value-extracting power of hedge fund activists. Technically, they are no more than
minority shareholders. Yet they exert enormous influence, often forcing these companies to undertake fundamental restructuring and
to increase stock buybacks and dividends substantially. For instance, Third Point Management and Trian Fund Management, holding only
2% of the outstanding stock of Dow Chemical and DuPont, respectively, engineered a merger-and-split of America's top two chemical
giants at the end of 2015 that resulted in both massive layoffs and the closure of DuPont's central research lab, one of the first
industrial science labs in the United States.
So how did hedge fund activists gain power so far in excess of their actual shareholdings?
In the 1980s, predatory value extraction was the province of the corporate raiders who flexed their muscles by becoming major
shareholders of target companies and staging hostile takeovers. This mode of value extraction was highly risky in two respects. First,
the raiders needed to raise substantial amounts of money to purchase enough shares that they could plausibly threaten to take control
of the companies they targeted. Second, they frequently faced legal battles with management or incumbent shareholders because nothing
less than control of the company was at stake. Being able to influence corporations without taking those risks would be a corporate
raider's dream come true.
In the late 1980s and 1990s this dream became a reality. Driven by a clamor for "shareholder democracy" amid a rapid increase
in institutional shareholding of public corporations and broadening acceptance of the maximizing shareholder value (MSV) view, the
federal government implemented regulatory changes that set the stage for hedge fund activism.
The first set of regulatory changes was put into motion by Robert Monks, who in 1985 set up Institutional Shareholder Services
(ISS), the first proxy-advisory firm, upon his resignation from the post of chief pension administrator at the U.S. Department of
Labor (DOL). During his sole year in the Labor Department's employ, Monks endeavored to make proxy voting compulsory for pension
funds, using his position as a platform for public advocacy of the notion that the funds had an obligation to become responsible
"corporate citizens" and actually exercise the power their financial holdings gave them over corporate management. In 1988, his former
DOL colleagues established proxy voting as a fiduciary duty of pension funds by the so-called "Avon Letter." Compulsory voting of
proxies was later extended to all other institutional investors, including mutual funds, under an SEC regulation in 2003.
Monks and his disciples justified the changes under the pretext of realizing the long-held goal of "shareholder democracy," which,
however, was all but irrelevant to proxy voting. A political project that had begun in the early 20 th century, shareholder
democracy was intended to lessen public distrust of corporations and to create social cohesion by distributing corporate shares to
retail investors who had U.S. citizenship. Institutional investors were simply money-managing fiduciaries who, lacking the status
of citizens, had never been seen as having any part in shareholder democracy. Moreover, voting in most countries is not legally compulsory,
it is one's right as a citizen. But Monks and his followers appropriated the banner of shareholder democracy to impose the voting
of proxies on institutional investors as a fiduciary duty.
The consequence was the creation of a huge vacuum in corporate voting. Most institutional investors remained uninterested in voting
and incapable of doing it meaningfully. The situation got worse with the increasing popularity of index funds, currently estimated
to hold about one-third of all shares issued by companies listed in the U.S. Faced with the new requirement not only to vote but
also to justify their voting decisions, institutional investors became heavily reliant on proxy-advisory firms. But these firms are
often no more competent in making voting decisions than the institutional investors that hire them, and, as for-profit entities,
are wide open to conflicts of interest. Some large mutual funds and pension funds, responding to public criticism that they are simply
outsourcing voting decisions, have set up internal "corporate-governance teams" or "stewardship teams." However, these teams are
designed to do no more than pay "lip service" to voting requirements: they are minimally staffed and their decision-making resembles
"the corporate governance equivalent of speed dating," as
the
New York Times phrased it, rather than examining the concrete contexts of individual companies' voting issues. The potential
for cooperation with hedge fund activists is great: the current owner of ISS, for example, is itself a private equity fund founded
by corporate raiders.
The second set of regulatory changes was proxy-rule changes in 1992 and 1999 that allowed "free communication and engagement"
among public shareholders and between public shareholders and management, as well as between public shareholders and the general
public. These proxy-rule changes ostensibly aimed at correcting an imbalance between public shareholders and management by making
it easier for minority shareholders to aggregate their votes. By that time, however, the balance of power between public shareholders
and management was already skewed decisively toward the former. Institutional shareholding of American corporations' stock had already
approached 50% by the early 1990s and, by 2017, was to reach nearly 70%. The proxy-rule changes further strengthened the power of
public shareholders by allowing them to form de facto investor cartels and freely criticize management. Even if the SEC
required those whose holdings of a given company's stock reached a 5% share to disclose the fact publicly, hedge fund activists could
easily circumvent that limit by forming "wolf packs": soliciting the participation of other activists, whose holdings had not reached
the threshold for reporting, in staging sudden, concerted campaigns against target companies.
Allowing free communication between shareholders and the public, far from evening the supposed imbalance between shareholders
and management, intensified the influence of the former. Activist shareholders were freed by the SEC directives to allow them criticize
a company's management "as long as the statements [they made were] not fraudulent." In contentious issues, management makes its decisions
by weighing the advantages and disadvantages of the options available. But the directives have made it all too easy for activist
shareholders to criticize management in public by simply emphasizing some of the disadvantages while remaining within the limit of
not perpetrating fraud.
A third set of regulatory changes, which allowed hedge fund activists to gain even more power, followed from the 1996 National
Securities Markets Improvement Act (NSMIA). Part of the financial market deregulation that took place during the Clinton administration,
NSMIA effectively allowed hedge funds to pool unlimited financial resources from institutional investors without regulations requiring
disclosure of their structure or prohibiting overly speculative investments. This threw the door wide open to co-investments between
activist hedge funds and institutional investors who put their money into the hedge funds as "alternative investment." For instance,
the California Teachers Retirement System (CaLSTRS) cooperated in Trian Fund's campaign against DuPont from the beginning by co-signing
a letter supporting the hedge fund's demands in 2015. It later turned out that CaLSTRS, a long-term investor in DuPont, was also
one of Trian's major investors.
In combination, these regulatory changes increased the incidence of predatory value extraction in the U.S. economy. For more than
a decade, major public corporations have routinely disbursed to shareholders nearly all of their profits, and often sums equivalent
to more than their profits, in the form of stock buybacks, dividends, and deferred taxes while investing less for the future and
undertaking restructuring simply for the sake of reducing costs. It is now increasingly difficult to find incidents in which management
rejects hedge fund activists' proposals outright and risks proceeding to a showdown proxy vote in a shareholder meeting. As Steven
Davidoff Solomon wrote in
his New York Times column , "companies, frankly, are scared" and "[their] mantra is to settle with hedge funds before
it gets to a fight over the control of a company."
If a regulatory change is found to be misguided, it should be reversed or recalibrated. What would that look like in the context
of activist hedge funds? Here are some suggestions for rebuilding the U.S. system of proxy voting and shareholder engagement such
that it will support sustainable value creation and value extraction:
First, the SEC should make it mandatory, when shareholders make a submission of shareholder proposals to a shareholders' meeting,
that they justify their proposals in terms of value creation by and capital formation for the corporation, rather than simply
requesting distribution of company funds that could be made available by, for instance, disgorgement of free cash flows. Second,
voting should be removed as a fiduciary duty of institutional investors. The compulsory voting of institutional investors, who
tend to be both uninterested in voting and incapable of doing so meaningfully, has only given illegitimate power to proxy-advisory
firms and hedge fund activists. Third, as a practical enforcement mechanism that will shape the thinking and behavior of shareholders
so that they take sustainable value creation and value extraction into account, the regulatory authorities should allow differentiated
voting rights that favor long-term shareholders. Fourth, the SEC should make it mandatory for both shareholders and management
to disclose to the public what they have discussed in engagement sessions. Free engagement has been reserved to a restricted number
of influential investors who have preferred to keep this communication private.
Fifth, hedge funds should be subject to regulations equivalent to those imposed on institutional investors. Hedge funds are already
big enough to pose systemic risks to the economy, a lesson that might have been taken from the collapse of Long-Term Capital Management
in 1998. Since the passage of the NSMIA in 1996, hedge funds have managed a large portion of institutional investors' funds for the
benefit of their ultimate customers, who include ordinary workers and pensioners. There is no plausible reason why hedge funds should
be treated as private entities and freed from financial regulations applied to institutional investors when they are functioning
as surrogate institutional investors.
The merger is certainly an impressive feat of financial engineering. It will bring together two companies: DuPont, with
54,000 employees, and Dow Chemical, with 53,000 employees. The two behemoths will merge, and then in the space of two years
spit out three newly formed companies, one in agriculture, another in material sciences and a third in specialty products used
in such fields as nutrition and electronics.
This plan is one easily understood by a hedge fund activist or investment banker in a cubicle in Manhattan with an Excel
spreadsheet . To them, it makes perfect sense to merge a company and then almost immediately split it in three. Doing so
will meet the goal to define business lines with precision and, it is hoped, spur growth. Expenses can also be cut, on paper
at least.
The companies that the combined entity will create can cut $3 billion in expenses, but the last time I checked, three companies
each require a chief executive, general counsel and many other executives, so these savings may be eaten up by new overhead.
Nearly 100,000 employees and their dependents, suppliers, and customers will get the hedge fund roto rooter treatment so a
handful of rich bastards make moar. Ain't America great already?
The cherry on top is the public employee pension fund's assist in this certain debacle, when the three spun out entities synergize
themselves into dust, taking suppliers and customers with them, while freeing up $3 billion in the short term to grease the looting
operation. By the way $3 billion represents 30,000 employees were they paid $100,000 per year.
Whatever the names of the three new entities, append the word 'disaster' to it.
Once again, why not just abolish the corporate income tax and make the point of incidence of taxation the wealth and income
of the beneficial owners of corporations, the stock and bond holders? (This could be done in a "revenue neutral" way, but obviously
greatly increased taxes on top tier wealth and income would be desirable for other reasons). That would obviate the point of such
extractive strategies, which is simpler and more plausible than imagining the SEC would suddenly develop teeth and muscle and
be able to impose "norms" on the business.
Or we could just regulate hedge funds right out of existence. And maybe take care of private equity firms at the same time.
I have yet to see any benefit to society at large from either of them.
"During my whole career at Goldman Sachs - 1967 to 1991 - I never owned a foreign stock or emerging market bonds. Now I have
hundreds of millions of dollars in Russia, Brazil, Argentina and Chile, and I worry constantly about the dollar-yen rate. Every
night before I go to bed I call in for the dollar-yen quote, and to find out what the Nikkei is doing and what the Hang Seng Index
is doing. We have bets in all these markets. Right now Paul [one of my traders] is long [on] the Canadian dollar. We have bets all
over the place. I would not have worried about any of these twenty years ago. Now I have to worry about all of them."
Economic globalization is probably the most fundamental transformation of the world's political and economic arrangements since
the Industrial Revolution. Decisions made in one part of the world more and more affect people and communities elsewhere in the
world. Sometimes the consequences of globalization are positive, liberating inventive and entrepreneurial talents and accelerating
the pace of sustainable development. But at other times they are negative, as when many people, especially in less-developed countries,
are left behind without a social safety net. Globalization undermines the ability of the nation to tax and to regulate its own economy.
This weakens the power of sovereign nations relative to that of large transnational corporations and distorts how social and economic
priorities are chosen.
Economic globalization is most often associated with rapid growth in the flow of goods and services across international borders.
Indeed, the economic "openness" of a nation is often measured by the value of its exports, imports, or their sum when compared to
the size of its economy. Economic globalization also involves large investments from outside each nation, often by transnational
corporations. These corporations often combine technology and know-how with their investments that enhance the productive capacity
of a nation. Previous position papers of the Mobilization, contained in Speaking of Religion & Politics: The Progressive Church
Tackles Hot Topics2, have dealt with globalization primarily in these terms.
But international trade and investment are only part of the openness that has come to be called globalization. Another part,
and arguably the most important, is the quickening flow of financial assets internationally. While a small portion of this flow
is directly associated with the "real" economy of production and exchange, its vast majority is composed of trades in the "paper"
economy of short-term financial markets. This paper economy is enormous: The value of global financial securities greatly exceeds
the value of annual world output of goods and services. Moreover, the paper economy often contributes to crises in the real economy.
Thus it is important to the well being of humanity and the planet as a whole, yet it is little understood by most people. This essay
undertakes to provide a basic understanding of this paper economy, especially as its more speculative features have multiplied during
the last two or three decades, so that Christians and others concerned about what is happening in our world can join in an intelligent
discussion of how the harmful consequences of financial markets can be controlled.
Financial markets 101
To better understand this paper economy, one first needs to know something about foreign exchange markets, international money
markets, and "external" financial markets.
In an open economy, domestic residents often engage in international transactions. American car dealers, for example, buy Japanese
Toyotas and Datsuns, while German computer companies sell electronic notebooks to Mexican businessmen. Similarly, Australian mutual
funds invest in the shares of companies all over the world, while the treasurer of a Canadian transnational corporation parks idle
cash in 90-day Bank of England notes. Most of these transactions require one or more participants to acquire a foreign currency.
If an American buys a Toyota and pays the Japanese Toyota dealer in dollars, for example, the latter will have to exchange the dollars
for yens in order to have the local currency with which to pay his workers and local suppliers.
The foreign exchange market is the market in which national currencies are traded. As in any market, a price must exist at which
trade can occur. An exchange rate is the price of a unit of domestic currency in terms of a foreign currency. Thus, if the exchange
rate of the dollar in terms of the Japanese yen increases, we say the dollar has depreciated and the yen has appreciated. Similarly,
a decrease in the dollar/yen exchange rate would imply an appreciation of the dollar and a depreciation of the yen.
Foreign exchange markets can be classified as spot markets and forward markets. In spot markets currencies are bought and sold
for immediate delivery and payment. In forward markets, currencies are bought or sold for future delivery and payment. A U.S. music
company, say, enters into a contract to buy British records for delivery in 30 days. To guard against the possibility of the dollar/pound
exchange rate increasing in the meantime, the company buys pounds forward, for delivery in 30 days, at the corresponding forward
exchange rate quoted today. This is called hedging.
Of course, there has to be a counterpart to the music company's forward purchase of pounds. Who is the seller of those pounds?
The immediate seller would be a commercial bank, as in the spot market. But the bank only acts as an intermediary. The ultimate
seller of forward pounds may be another hedger, like the music company, but with a position just its opposite. Suppose, for example,
that an American firm or individual has invested in 30-day British securities that it wants to convert back into dollars after the
end of 30 days. The investor may decide to sell the pound proceeds forward in order to assure itself of the rate at which the pounds
are to be converted back into dollars after 30 days.
Another type of investor may be providing the forward contract bought by the music company. This is the speculator, who attempts
to profit from changes in exchange rates. Depending on their expectations, speculators may enter the forward market either as sellers
or as buyers of forward exchange. In this particular case, the speculator may have reason to believe that the dollar/pound exchange
rate will decrease in the next 30 days, permitting him to obtain the promised pounds at a lower price in the spot market 30 days
hence.
The main instruments of foreign exchange transactions include electronic bank deposit transfers and bank drafts, bills of exchange,
and a whole array of other short-term instruments expressed in terms of foreign currency. Thus, foreign exchange transactions do
not generally involve a physical exchange of currencies across borders. They generally involve only changes in debits and credits
at different banks in different countries. Very large banks in the main financial centers such as New York, London, Brussels and
Zurich, account for most foreign exchange transactions. Local banks can provide foreign exchange by purchasing it in turn from major
banks.
Although the foreign exchange market is dispersed in many cities and countries, it is unified by keen competition among the highly
sophisticated market participants. A powerful force keeping exchange rate quotations in different places in line with each other
is the search on the part of market participants for foreign exchange arbitrage opportunities. Arbitrage is the simultaneous purchase
and sale of a commodity or financial asset in different markets with the purpose of obtaining a profit from the differential between
the buying and selling price.
When foreign exchange is acquired in order to engage in international transactions involving the purchase or sale of goods and
services, it is said that international trade has taken place in the real economy. When international transactions involve the purchase
or sale of financial assets, they are referred to as international financial transactions. They constitute the paper economy.
Financial markets are commonly classified as capital markets or money markets. Capital markets deal in financial claims that
reach more than one year into the future. Such claims include shares of stock, bonds, and long-term loans, among others. Money markets,
on the other hand, deal in short-term claims, with maturities of less than one year. These include marketable government securities
(like Treasury bills), large-denomination certificates of deposit issued by banks, commercial paper (representing short-term corporate
debt), money market funds, and many other kinds of short-term, highly liquid (easily transferable) financial instruments. It is
these short-term money market securities that account for most of the instability in the global paper economy.
Buying or selling a money market security internationally involves the same kind of foreign exchange risk that plagues buyers
or sellers of merchandise internationally. If one wishes to guard against the possibility of an increase or decrease in the foreign
exchange rate, one can insure against such fluctuations by "covering" in the forward market. By the same token, the decision about
whether to own domestic or foreign money market securities is not simply a comparison of the rates of interest paid on otherwise
comparable securities, because one must also take into account the gain (or loss) from purchasing foreign currency spot and selling
it forward. Thus, choosing the security with the highest return does not necessarily imply the one with the highest interest rate.
People who trade in international money markets, moreover, need to take into account many other variables, including the costs
of gathering and processing information, transaction costs, the possibility of government intervention and regulation, other forms
of political risk, and the inability to make direct comparisons of alternative assets. Speculating in international money markets
is a risky proposition.
International money markets involve assets denominated in different currencies. External financial markets involve assets denominated
in the same currency but issued in different political jurisdictions. Eurodollars, for example, are dollar deposits held outside
the United States (offshore), such as dollar deposits in London, Zurich, or even Singapore banks. The deposits may be in banks owned
locally or in the offshore banking subsidiaries of U.S. banks. Deutsche mark deposits in London banks or pound sterling deposits
in Amsterdam banks also are examples of external deposits. They are referred to as eurocurrency deposits. (The advent of a new common
currency in the European Community - the Euro - will require the development of new nomenclature for external financial markets)
External banking activities are a segment of the wholesale international money market. The vast majority of eurocurrency transactions
fall in the above $1 million value range, frequently reaching the hundreds of millions (or even billion) dollar value. Accordingly,
the customers of eurobanks are almost exclusively large organizations, including multinational corporations, government entities,
hedge funds, and international organizations, as well as eurobanks themselves. Like domestic banks, eurobanks that have excess reserves
may make loans denominated in eurocurrencies, expanding the supply of eurocurrency deposits. The eurocurrency market funnels funds
from lending countries to borrowing countries. Thus, it performs an important function as global financial intermediator.
Early history
The origins of what Karl Polanyi3 called haute finance can be traced to Renaissance Italy,
where as early as 1422 there were seventy-two bankers or bill-brokers in or near the Mecato Vecchio of Florence.4
Many combined trade with purely financial business. By the middle of the fifteenth century, the Medici of Florence had opened branches
in Bruges, London and Avignon, both as a means of financing international trade and as a way of marketing new kinds of financial
assets. Many banking terms and practices still in use today originated in the burgeoning financial centers of Renaissance Europe.
By the early seventeenth century, the Dutch and East India Companies began issuing shares to the public in order to fund imperial
enterprises closely linked to Holland and Britain. Their shares were made freely transferable, permitting development of a secondary
financial market for claims to future income. Amsterdam opened a stock exchange in 1611, and shortly thereafter, the British government
began issuing lottery tickets, an early form of government bonds, to finance colonial expansion, wars and other major areas of state
expenditure. A lively secondary market in these financial instruments also emerged.5
Throughout these early years, financial markets were anything but riskless and stable. Consider the famous Dutch tulip mania
of 1630, for example. This speculative bubble saw prices of tulip bulbs reach what seemed like absurd levels, yet "the rage among
the Dutch to possess them [tulips] was so great that the ordinary industry of the country was neglected." Some investors in Britain
and France shared this "irrational exuberance," though it was centered mostly in Holland. Then, not unlike speculative bubbles of
more recent vintage, prices crashed6, pushing the economy into a depression and leaving many
investors angry and confused.
Paris developed into an early financial center in the eighteenth century, but the Revolution of 1789 dissipated its power. The
New York Stock Exchange was formally organized in 1792 and the official London Stock Exchange opened in 1802. The expansion westward
of the railroads in the U.S. offered the financial community opportunity to sell railway shares and bonds that quickly became dominant
in the financial markets. Indeed, the bond markets of London, Paris, Berlin, and Amsterdam were vehicles for collecting massive
amounts of European savings and transferring it at higher returns to the emerging markets of the U.S., Canada, Australia, Latin
America and Russia in the century preceding World War I.
Forward markets soon developed, especially in the U.S., in order to counter the impact of long distances and unpredictable weather.
As capital and money markets expanded, other new financial instruments came into use. Joint stock companies were formed, enabled
by legislation that clarified the distinction between the owners and managers of corporations. This, in turn, helped stimulate the
growth of the American stock market in the late nineteenth century. To be sure, financial markets did not grow continuously in the
nineteenth century. Lending to the emerging markets was interrupted by defaults in the 1820s, 1850s, 1870s and 1890s, but each wave
of default was confined to a relatively small number of countries, permitting growth of financial flows to resume.7
In the four decades leading up to World War I, a truly worldwide economy was forged for the first time, extending from the core
of Western Europe and the U.S. to latecomers in Eastern Europe and Latin America and even to the countries supplying raw materials
on the periphery. Central to this expansion of trade and investment was an expanding system of finance that girded the globe. The
amount was enormous: between 1870 and 1914 something like $30 billion,8 the equivalent in
2002 dollars of $550 billion, was transferred to recipient countries, in a world economy perhaps one-twelfth as large as today's.
During this "Gilded Age" of haute finance, the risks of participating in international trade and investment were generously shared
with governments and the banking system. The reason is that foreign exchange rates were kept reasonably stable by the commitment
of most governments to the "high" gold standard. In this way, businesses and individuals engaging in international transactions
were reasonably certain that the value of their contracts was not going to change before they matured. Their exchange risk was shared
with government by its willingness to buy or sell gold in order to keep the exchange rate constant. Because of this assurance, financial
flows were reasonably free of regulation.
They were not immune from crises, however. When the sources of financial capital temporarily dried up, capital-importing countries
occasionally found they could not expand export earnings sufficiently to avoid suspending interest payments on their debts or abandoning
gold parity. On two occasions, the United States faced this possibility. The first was in 1893, when it switched in a sharp economic
downturn to bimetallism (which caused William Jennings Bryan to denounce the "cross of gold"), and the second was in 1907, which
led to the creation of the Federal Reserve System, handing to the government the function of lender of last resort previously carried
out by Wall Street banks under the tutelage of J. Pierpont Morgan.
In his magisterial book The Great Transformation, Karl Polanyi reflected on the pervasive influence of haute finance on the policies
of nations even in this "Gilded Age." The globalising financial markets and the gold standard, according to Polanyi, left very little
room for states, especially smaller ones, to adopt monetary and fiscal policies independent of the new international order. "Loans,
and the renewal of loans, hinged upon credit, and credit upon good behavior. Since, under constitutional government ..., behavior
is reflected in the budget and the external value of the currency cannot be detached from the appreciation of the budget, debtor
governments were well advised to watch their exchanges carefully and to avoid policies which might reflect upon the soundness of
budget positions." Thus, even one hundred years ago the then-dominant world power, Great Britain, speaking as it did so often through
the voice of the City of London, "prevailed by the timely pull of a thread in the international monetary network.9
Following World War I, the United States emerged not merely as a creditor country but as the primary source of new international
financial flows. At first, the principal borrowers were the national governments of the stronger countries, but as the boom in security
underwriting developed in the U.S, numerous obscure provinces, departments and municipalities found it possible to sell their bonds
to American investors.10 Just as domestic construction, land, and equity markets went through
speculative rises in the 1920s, so too did the U.S. experience a speculative surge in foreign investment. In the aftermath of successive
defaults by foreign debtors in 1932, the Senate Committee on Banking and Currency concluded:
The record of the activities of investment bankers in the flotation of foreign securities is one of the most scandalous chapters
in the history of American investment banking. The sale of these foreign issues was characterized by practices and abuses that violated
the most elementary principles of business ethics.11
Speculation in the stock markets leading up to 1929 offers still another window on the instability of short-term financial flows.
A speculative market can be defined as one in which prices move in response to the balance of opinion regarding the future movement
of prices rather than responding normally to changes in the demand for and supply of whatever is priced. Helped by the willingness
of Wall Street to allow people to buy stocks on margin, people were only too ready to bet prices would rise as long as others thought
so too. Day after day and month after month the price of stocks went up in 1927. The gains by later standards were not large, but
they had an aspect of great reliability. Then in 1928, the nature of the boom changed. "The mass escape into make-believe, so much
a part of the true speculative orgy, started in earnest.12
Following World War I, the gold standard itself took on new form. Nations were allowed to hold their international reserves in
either gold or foreign exchange. This worked for a while in the 1920s, but as speculation mounted and balances of payments disequilibria
grew, fears of devaluation led central banks to try to replace their foreign-exchange holdings with specie in a "scramble for gold."
The worldwide result of these shifts in central bank portfolios was an overall contraction of the supply of money and credit that
sapped aggregate demand and forced prices to fall and output levels to shrink. Thus, it can be argued - persuasively in our view
- that the Great Depression of the 1930s was as much, if not more, the result of mismanagement of money and credit as it was the
result of protectionist policies. Protectionist policies were more likely the result of slowed growth and stalled trade. Countries
that broke with the gold-exchange standard early, such as Britain in 1931, and pursued more expansionary monetary policies fared
somewhat better.
The Bretton Woods system
During the darkest days of World War II, a radically new economic architecture was designed for the postwar world at a New Hampshire
ski resort called Bretton Woods. With the competitive devaluation and protectionist policies of the 1930s still fresh in their minds,
the mostly British and American delegates to the conference wanted most of all to design a system with fixed exchange rates that
did not rely on national gold hoards to keep exchange rates stable. They decided to depend instead on strict controls of international
financial movements. In this way, they hoped to allow countries to pursue full-employment policies through appropriate monetary
(money and credit) and fiscal (tax and spending) policies without some of the anxieties associated with open financial markets.
The role of monetary and financial stabilizer was given to the International Monetary Fund (IMF), which was provided with modest
funds to assist nations to adjust imbalances in their external payments obligations. The International Bank for Reconstruction and
Development (IBRD, later the World Bank) assumed the task of helping to finance post-war reconstruction.13
The IMF as it emerged from Bretton Woods had inadequate reserves to advance money for the long periods that many countries require
for "soft-landings" from big current-account deficits. It would make only short-term loans. To make sure that borrowing nations
were constrained, "conditionality" attached to IMF loans became standard practice, even in the early years of the Fund's operation.
Policy limitations and "performance targets" tied to credit lines advanced under "standby agreements" began in the middle 1950s
and were universal by the 1960s, long before the notions of "stabilization" and "structural adjustment" came into common parlance.
The Bretton Woods agreement also imposed a foreign exchange standard by which exchange rates between major currencies were fixed
in terms of the dollar, and the value of the dollar was tied to gold at a U.S. guaranteed price of thirty-five dollars per ounce.
By devising a system that controlled financial movements and assisted with the adjustment of countries' balances of payments, the
new system succeeded in keeping exchange rates remarkably stable. They were changed only very occasionally, e.g., as when the value
of sterling relative to the dollar was reduced in 1949 and again in 1966. This meant that companies doing business abroad did not
need to worry constantly about the risk of exchanging one currency for another.
Among the reasons for this remarkable stability was the willingness of the central banks of other countries to hold an increasing
proportion of their official reserves in the form of U.S. dollars. It was an essential part of the system that the dollars held
by other countries would be seen as IOUs backed by the U.S. offer to exchange them for gold at a fixed pre-war price. But as the
balance-of-payments of the U.S. moved more deeply into deficits in the 1960s, there were more and more U.S. dollars held by other
countries, and this so-called "dollar overhang" became disturbingly large.15 General de
Gaulle called it "the exorbitant privilege," meaning that the Americans were paying their bills - for defense spending to fight
the Vietnam War among other things - with IOUs instead of real resources in the form of exports of goods and services.
Strict control over financial movements began to weaken as early as the 1950s, when the first eurodollar (later eurocurrency)
deposits were made in London. At first a trickle, limited originally to Europe, these offshore banking operations soon expanded
worldwide. The American "Interest Equalization Tax" (IET) instituted in 1963 raised the costs to banks of lending offshore from
their domestic branches.16 The higher external rates led dollar depositors such as foreign
corporations to switch their funds from onshore U.S. institutions to eurobanks. Thus, the real effect of the IET was to encourage
the dollar to follow the foreigners abroad, rather than the other way around. Eurobanks paid higher interest rates on deposits and
loaned eurocurrencies at lower rates than U.S. banks could at home. Still another large inflow of eurodeposits occurred in 1973-74
as the Organization of Petroleum Exporting Countries (OPEC) began "recycling" their surplus dollar earnings through eurobanks. Because
of their existence, a country such as Brazil could arrange within a reasonably regulation-free environment to obtain multimillion-dollar
loans from a consortium of offshore American, German and Japanese banks and thereby finance its oil imports. Net eurocurrency deposit
liabilities that amounted to around $10 billion in the mid-1960s, grew to $500 billion by 1980.
These eurocurrency transactions taught the players in financial markets how to shift their deposits, loans, and investments from
one currency to another whenever exchange rates or interest rates were thought to be ready to change. Even the ability of central
banks to regulate the supply of money and credit was undermined by the readiness of commercial banks to borrow and lend offshore.
Hence, the effectiveness of regulatory mechanisms that had been put in place to implement the Bretton Woods agreement - interest
rate ceilings, lending limits, portfolio restrictions, reserve and liquidity requirements - gradually eroded as offshore transactions
started to balloon.
The world economy developed at unprecedented rates during the roughly twenty-five years immediately following World War II. Growth
and employment rates during these years were at historic highs in most countries. Productivity also advanced rapidly in most developing
countries as well as in the technological leaders. These facts suggest that the system devised at Bretton Woods worked reasonably
well, despite occasional adjustments. To be sure, it helped to sow the seeds of its own destruction by failing to retain operational
control of international financial flows. But the twenty-five years of its survival leading up to August 15, 1971, when President
Nixon closed the gold window, have nonetheless come to be called by some economic historians the "Golden Years."
Controlling private risk
Fixed exchange rates did not last long after the U.S. stopped exchanging gold for claims on the dollar held by foreign central
banks. The pound sterling was allowed to float against the dollar in July, 1972. Japan set the yen free to float in February, 1973,
and most European currencies followed suit shortly thereafter. The Bretton Woods gold-dollar system was doomed.
The fact that exchange rates no longer were fixed meant that companies doing business in different countries had to cope with
the day-to-day shifts in the dollar's rate of exchange with other currencies. The risks of unexpected changes in the value of international
contracts suddenly had shifted from the public to the private sector. Corporate finance officers now had to hedge against possible
exchange losses by buying a currency forward and investing the equivalent in the short-term money market, or by investing in the
eurocurrency market. The corporations' banks, in turn, tried to match each foreign currency transaction with another contrary transaction
in order not to leave each of the banks exposed to foreign exchange risk overnight. Since no single bank was likely to balance its
foreign exchange positions exactly, the need arose to swap deposits in different currencies in order to match corporate hedging
transactions and to square the bank's books.
The price of this forward cover on inter-bank transactions - that is to say, the premium or discount on a currency's spot value
- has tended to accord with the differences between interest-rates offered for eurocurrency deposits in different currencies. This
is the connection between the foreign exchange market and the short-term credit markets, between exchange rates and interest rates.
Whenever exchange rates move up or down, therefore, their influence is immediately transmitted through the eurocurrency markets
to the credit markets.
It is this scramble to avoid private risk that accounted for the dramatic rise in international financial movements following
the demise of the Bretton Woods system. By 1973, daily foreign exchange trading around the world varied between $10 and $20 billion
per day. This amount was approximately twice the value of world trade at the time. Bank of International Settlements data suggests
that the daily average of foreign exchange trading had climbed by 1980 to about $80 billion, and that the ratio between foreign
exchange trading and international trade was more nearly ten to one. The data for 1992 was $880 billion and fifty to one, respectively;
for 1995, $l,260 billion and seventy to one; and for 2000, almost $1,800 and ninety to one.
There is very little doubt, therefore, that the lion's share of international financial flows is relatively short-run. Indeed,
about eighty percent of foreign exchange transactions are reversed in less than seven business days. Only a very small proportion
is used to finance international trade and direct foreign investment. The vast majority must be used with the expectation of gain
or to avoid losses that may result from changes in the value of financial assets. In general terms, they are speculative, made in
hope of capital gain or to hedge against potential capital loss, or to seek the gains of arbitrage based on slight differences in
rates of return in different financial centers.
Foreign exchange markets and markets for money and credit seem remote and abstract to most people. This section introduces the
real institutions that operate these markets and assesses the nature of their power.
Commercial banks They take deposits, lend money, and create credit to the extent their capitalization allows. In
Europe, they tend to combine commercial and investment banking services, but in the U.S. and Japan they are still kept at least
partially separate by regulation. The foreign exchange trading facilities of the largest commercial banks, e.g. Citibank and
J.P.Morgan/Chase in the U.S., tend to dominate the market. The banking industry as a whole represents the largest pool of world
financial capital.
Investment banks They facilitate international payments, manage new issues of stocks and bonds, advise on mergers
and acquisitions in all industries, and engage in securities and foreign exchange trading as allowed by law. Investment banks
(previously called merchant banks in the U.K.) have specialized in particular kinds of derivative products. Derivatives are
financial contracts whose value is based upon the value of other underlying financial assets such as stocks, bonds, mortgages
or foreign exchange.
Brokerage houses They handle the bulk of stock exchange transactions and a major part of foreign exchange transactions.
Investment banks recently have acquired several of the main brokerage houses in the U.S. The development of investor-friendly
methods of buying and selling securities, e.g., over-the-counter markets and electronic brokerage, also have diminished the
role of independent brokerage houses.
Mutual funds They are pools of funds provided by clients that are run by professional investment managers. These
collective investments are held in portfolios with various mixes of money-market instruments, bonds and equities. Mutual funds
account for the second largest pool of global financial capital.
Hedge funds They resemble mutual funds, but they are much less restricted in investment activities and techniques.
Their customers are high net-worth individuals and large institutional investors. They specialize in complex financial instruments
and tend to take significant speculative positions, especially on expected future changes in macroeconomic conditions. They
exploit arbitrage opportunities embedded in the relative prices of related securities. They frequent offshore centers and tax
havens.
Tax havens Offshore centers and tax havens shelter perhaps $10 trillion of wealth from capital and income taxation.
The British Virgin Islands, the Bahamas, Bermuda, the Cayman Islands, Dublin and Luxembourg are among the most important. Many
hedge funds are registered there.
Wealthy individuals They are an important source of funds, as many of them invest their liquid funds in financial
markets. They account for about eighty percent of hedge fund investors.
Private pension funds They function like annuities, receiving funds today in return for a promise to pay future benefits.
With large pools of funds to invest, they tend to depend on investment banks, mutual funds or hedge funds to supervise placement
of their assets in global financial markets.
Insurance companies They pool risks by selling protection against the loss of property, income, or life. Since the
risks they insure have various durations, they call for varied investment strategies. A portion of their funds is invested in
short-term financial instruments, often through mutual and hedge funds.
Transnational corporations They produce and sell goods and services in a number of countries. Their finance departments
seek the best ways to raise and transfer funds across borders, and administer the transfer prices18
of international trade conducted within the corporation. Some even have in-house corporate banks.
According to recent work by political scientists, the power of these financial actors is based in part on a complicated "process
of multiplication" of loans, assets and transactions. Many investors in financial markets buy financial instruments on very thin
margins, based on loans obtained by pledging the assets as collateral. This is called "leverage" in the jargon of financial markets.
In turn, the borrowed funds are invested in other financial assets, multiplying the demand for credit and financial assets. As demand
rises, more sophisticated financial assets are invented, including many forms of financial derivatives. A major portion of the accumulated
debt remains serviceable only as long as the prices of most assets will rise or at least remain relatively stable. If prices turn
down, they easily can lead to a chain-reaction. If investors respond instinctively like a herd, they will bring a far-reaching collapse
that constitutes a crisis.
As the flow of financial assets climbs, some bankers, brokers, and managers of financial institutions become prominent players
in the competition for investor dollars. Some become known for picking profitable places to invest and for promoting their selections
successfully. This can influence markets if people have confidence in their advice. A notorious example of the influence of prominent
players was the attack on British sterling in 1992 by George Soros' Quantum Fund. Believing that sterling was overvalued, the Fund
quietly established credit lines that allowed it to borrow $15 billion worth of sterling and sell it for dollars at the then "overvalued"
price. Its purpose, of course, was to pay back the loan with cheaper pounds after they had depreciated. Having gone long on dollars
and short on sterling, Soros decided to speak up noisily. He publicized his short-selling and made statements in newspapers that
the pound would soon be devalued. It wasn't long before sterling was devalued; he made $1 billion in profit.
The point can be made more generally: financial markets are subject to manipulation because they have become socially structured.
Market leaders and financial gurus are admired and followed (at least until very recently). The heavyweights thus dominate the business.
An obvious consequence of this is that there is a strong tendency in financial markets for further concentration of resources.
Another source of the power of financial actors is their obvious affinity for the rampant free-market philosophy of neo-liberalism.
The freedom with which they move financial capital around depends, of course, on the market-friendly policies of the so-called Washington
Consensus.19 As long as they are seen as part of the governing coalition, they derive special
powers to regulate themselves rather than be controlled by an independent government agency or civil society. Their power also is
reinforced by the activities of several collective associations of financial actors,20
which lobby on their behalf.
One more source of power for the financial actors is their knowledge that if they are big enough and sufficiently interlaced
with other financial actors, then the "system" will keep them from failing. Consider the case of Long-term Capital Management, a
hedge fund partnership started in 1994. It was able to borrow from various banks the equivalent of forty times its capitalization
in order to make bets on changes in the relative prices of bonds in the U.S. and abroad. When the Russian government announced a
devaluation and debt moratorium in August, 1998, it produced losses that the fund could not sustain. Nor could some of the banks
that had loaned large amounts to the fund. Accordingly, the Federal Reserve Bank of New York, fearful that the risk to the entire
system was too high, orchestrated a private rescue operation by fourteen banks and other financial institutions, which re-capitalized
the company for $3.5 billion.
Financial actors also have the power indirectly to influence non-financial actors such as firms or states. By providing economic
incentives to gamble and speculate on financial instruments, global financial markets divert funds from long-term productive investments.
In all probability, they also encourage banks and financial institutions to maintain a regime of higher real interest rates that
reduce the ability of productive enterprises to obtain credit. The volatility of global financial markets, moreover, brings uncertainty
and volatility in interest rates and exchange rates that are harmful to various sectors of the real economy, particularly international
trade.
The above stories about George Soros and Long-term Capital Management are good illustrations of the consequences for non-financial
actors of actions by financial actors. Both episodes are examples of games that are basically zero-sum, at least in the short-run.
Nothing new was produced; no new values were created. In the 1992 case about speculating against sterling, the Quantum Fund's profits
were at the expense of the British government, especially the Bank of England, and British taxpayers. In 1998, the losses suffered
by Long-term Capital Management came out of the pockets of the stockholders of the banks that bailed it out, as the stock-market
value of their shares depreciated. Hence, the financial system tends to feed itself by drawing more resources from other sectors
of the economy, undermining the vitality of the real economy.
Consequences of global financial flows
The dominant economic ideology of the last twenty-five years has been embodied in the so-called Washington Consensus. It is a
"market-friendly" ideology that traces its roots to longstanding policies of the IMF that encourage macroeconomic "stabilization;"
to adoption by the World Bank of ideas in vogue in Washington early in the Reagan period concerning deregulation and supply-side
economics; to the zeal of the Thatcher government in England for privatizing public enterprises; and perhaps most of all to the
neo-liberal tendencies of the business community and the economics profession in the U.S. The implementation of these policies of
economic "reform," by first "stabilizing" the macro-economy and then "adjusting" the market so that it can perform more efficiently,
are supposed to pay off in the form of faster output growth and rising real incomes
Among these policy prescriptions is financial liberalization in both the developed and the developing countries. Domestically
it is achieved by weakening or removing controls on interest and credit and by diluting the differences between banks, insurance
and finance companies. International financial liberation, on the other hand, demands removal of controls and regulations on both
the inflows and outflows of financial instruments that move through foreign exchange markets. It is the implementation of these
reforms that is perhaps the single most important cause of the surge in global financial flows. To be sure, the influence of technological
advances has broken the natural barriers of space and time for financial markets as twenty-four hour electronic trading has grown.
The fact that throughout most of the 1980s and 1990s the developed countries suffered from over-capacity and overproduction in manufacturing
may also have led the owners of financial capital to look for alternative profit opportunities.
It now is time to ask whether the implementation of all these reforms, on balance, has produced good or bad results. The focus
of this section will be mostly on the consequences of large and expanding international financial flows. After all, they are the
main concern of this essay. But first, we should ask whether or not the policies of growth and rising real incomes promoted by the
Washington Consensus have borne fruit.
Growth and income
There is little doubt that the introduction of the Washington Consensus' policy mix expanded the volume of international trade.
As a result, trade in goods and services has grown at more than twice the rate of global gross domestic product (GDP), and developing
countries' share of trade has risen from 23 to 29 percent. Increasing numbers of firms from developing countries, like their industrial-country
counterparts, engage in transnational production and adopt a global perspective in structuring their operations. The flow of foreign
direct investments and foreign portfolio investments has multiplied even more rapidly than trade, despite the financial instability
experienced in Asia, Brazil, Russia, and elsewhere in recent years.
The effects of liberalization have not been uniformly favorable, however. After at least ten full years of experience with the
Washington Consensus, several recent studies have begun to assess the consequences for developing countries of this experiment in
more open markets.21 Except for the years of crisis in a number of the countries studied,
most developing countries achieved moderate growth rates of gross domestic product in the 1990s - considerably higher than in the
l980s in Africa and Latin America during the debt crisis, but remarkably unchanged in most other regions. Moreover, average annual
growth in the 1990s was slightly lower than in the twenty-five years preceding the debt crisis when a strategy of substituting domestic
production for imports was in fullest use. When population growth rates are taken into consideration, the growth rate of per capita
income in the developing countries studied during the 1990s also was somewhat lower than in the 1960s and 1970s. Toward the end
of the 1990s, growth tapered off in many countries due to emerging domestic financial crises or external events. There is little
evidence in these figures, therefore, to suggest the strategy of liberalization boosted growth rates appreciably.
Nor did the distribution of income improve in most developing countries in the 1990s. On the contrary, virtually without exception
the wage differentials between skilled and unskilled workers rose with liberalization. The reasons for this varied widely among
countries, but one of the most important reasons was the fact that the number of relatively well-paid jobs in sectors of the economy
involved with international trade, though growing, was insufficient to absorb available workers, forcing many workers into more
precarious and poorly paid employment in the non-traded, informal trade, and service sectors or where traditional agriculture served
as a sponge for the labor market. Between the mid-1960s and the late-1990s, the poorest 20 percent of the world population saw its
share of income fall from 2.3 to 1.4 percent. Meanwhile, the share of the wealthiest quintile increased from 70 to 85 percent.22
Risk and reward
While all markets are imperfect and subject to failure, financial markets are more prone than others to fail because they are
plagued with three particular shortcomings: asymmetric information, herd behavior and self-fulfilling panics. Asymmetric information
is a problem whenever one party to an economic transaction has insufficient information to make rational and consistent decisions.
In most financial markets where borrowing and lending take place, borrowers usually have better information about the potential
returns and risks associated with the investments to be financed by the loans than do the lenders. This becomes especially true
as financial transactions disperse across the globe, often between borrowers and lenders of widely different cultures.
Asymmetric information leads to adverse selection and moral hazard. Adverse selection occurs when, say, lenders have too little
information to choose from among potential borrowers those who are most likely to use the loans wisely. The lenders' gullibility,
therefore, attracts more unworthy borrowers. Moral hazard occurs when borrowers engage in excessively risky activities that were
unanticipated by lenders and lead to significant losses for the lender. Yet another form of moral hazard occurs when lenders indulge
in lending indiscriminately because they assume that the government or an international institution will bail them out if the loans
go awry.
A good illustration of asymmetric information is the story of bank lending following OPEC's large increase in oil prices following
1973. Awash in cash, the oil exporters deposited large amounts in commercial banks that then perfected the Euro-currency loan for
developing countries. Eager to put excess reserves to use, the banks spent little time discriminating among potential borrowers,
in part because they believed host governments or international agencies would guarantee the loans. At the same time, developing
countries found they could readily borrow not only to import oil, but also to increase other kinds of expenditures. This meant they
could use borrowed funds to maintain domestic spending rather than be forced to adjust to the new realities of higher prices for
necessary imports. There is considerable evidence that moral hazard also was present in the Mexican crises in 1982 and 1994, and
in the Southeast Asian crises in 1997-8.
Yet another illustration of asymmetric information is the tendency of financial firms, especially on Wall Street and in the City
of London, to invent ever more complex derivatives to shift risk around the financial system. The market for these products is growing
rapidly, both on futures and options exchanges (two of the several places where derivatives are traded). A financial engineer, for
example, can take the risk in, say, a bond and break it down into a series of smaller risks, such as that inflation will reduce
its real value or that the borrower will default. These smaller risks can then be priced and sold, using derivatives, so that the
bondholder keeps only those risks he wishes to bear. But this is not a simple task, particularly when it involves assets with risk
exposures far into the future and which are traded so rarely that there is no good market benchmark for setting the price. Enron,
for instance, sold a lot of these sorts of derivatives, booking profits on them immediately even though there was a serious doubt
about their long-term profitability. Stories of huge losses incurred in derivative trading are legion. The real challenge before
central banks and regulatory bodies is to curb speculative behavior and bring discipline in derivative markets.
A second source of risk in financial markets is the tendency of borrowers and lenders alike to engage in herd behavior. John
Maynard Keynes, writing in the 1930s, suggested that financial markets are like "beauty contests." His analogy was to a game in
the British Sunday newspapers that asked readers to rank pictures of women according to their guess about the average choice by
other respondents. The winner, therefore, does not express his own preferences, but rather anticipates "what average opinion expects
average opinion to be." Accordingly, Keynes thought that anyone who obtained information or signals that pointed to swings in average
opinion and to how it would react to changing events had the basis for substantial gain. Objective information about economic data
was not enough. Rather, simple slogans "like public expenditure is bad," "lower unemployment leads to inflation," "larger deficits
lead to higher interest rates," were then the more likely sources of changes in public opinion. What mattered was that average opinion
believed them to be true, and that advance knowledge of, say, more public spending, lower unemployment, or larger deficits, respectively,
offered the speculator a special advantage.
A financial market that operates as a beauty contest is likely to be highly unstable and prone to severe changes. One reason
for this is that people trading in financial assets, even today, know very little about them. People who hold stock know little
about the companies that issued them. Investors in mutual funds know little about the stocks their funds are invested in. Bondholders
know little about the companies or governments that issued the bonds. Even knowledgeable professionals are often more concerned
with judging how swings in conventional opinion might change market values rather than with the long-term returns on investments.
Indeed, since careful analysis of risks and rewards is costly and time consuming, it often makes sense for fund managers and traders
to follow the herd. If they decide rationally not to follow the herd, their competence may be seriously questioned. On the other
hand, if fund managers follow the herd and the herd suffers losses, few will question their competence because others too suffered
losses. When financial markets are operated like a beauty contest, everyone wants to sell at the same time and nobody wants to buy.
The financial markets behaved as predicted shortly after several industrial countries, including the U.S. and Germany, abolished
all restrictions on international capital movements in 1973. The new system proved to be highly volatile, with exchange rates, interest
rates, and financial asset-prices subject to large short-term fluctuations. The markets also were susceptible to contagion when
financial tremors spread from their epicenter to other countries and markets that seemingly had little connection with the initial
problem. In less than five years, it already was clear that both the surpluses and the deficits on the major countries' balance
of payments were getting larger, not smaller, despite significant changes in the exchange rates.
In some cases, a financial crisis can be self-fulfilling. A rumor can trigger a self-fulfilling speculative attack, e.g. on a
currency, that may be baseless and far removed from the economic fundamentals (unlike the Soros story above). This can cause a sudden
shift in the herd's intentions and lead to unanticipated market movements that create severe financial crises. Consider, for example,
the succession of major financial crises that have pock-marked the recent history of international financial markets, including
Latin America's Southern Cone crisis of 1979-81, the developing-country debt crisis of 1982, the Mexican crisis of 1994-95, the
Asian crisis of 1997-98, the Russian crisis of 1998, the Brazilian crisis of 1999, and the Argentine crisis of 2001-02.
Perhaps the Asian crisis of 1997-98 is the most interesting in this regard, for there were relatively few signals beforehand
of impending crisis. All the main East Asian economies displayed in 1994-96 low inflation, fiscal surpluses or balanced budgets,
limited public debt, high savings and investment rates, substantial foreign exchange reserves and no signs of deterioration before
the crisis. This background has led many analysts to suppose that the crisis was a mere product of the global financial system.
But what could have triggered the herd to stampede out of Asian currencies? No doubt several factors were at work. Before the crisis
that started in the summer of 1997, there was a rise in short-term lending to Asians by Western and Japanese banks with little or
no premiums, a fact that the Bank for International Settlement raised questions about. Alert investors, especially hedge funds,
also noticed that substantial portions of East and Southeast Asian borrowings were going into non-productive assets and real estate
that often were linked to political connections. In fact, some of the funds pouring into non-productive assets were coming out of
the productive sector, mortgaging the longer-term viability of some real economies. Information about the structure and policies
of financial sectors was opaque. Thus, opinions began to change among key lenders about the regulation of financial sectors in several
Asian countries and their destabilizing lack of transparency. Suddenly, several important hedge funds reduced their exposure by
shorting currency futures, followed quickly by Western mutual funds. The calling of loans led quickly to deep depression in several
Asian countries. It has been estimated that the Asian crisis and its global repercussions cut global output by $2 trillion in 1998-2000.
Loss of government autonomy
Both economic theory and the experience of managing the external financial affairs of nations tell us that it is virtually impossible
to maintain (1) full financial mobility, (2) a fixed exchange rate, and (3) freedom to seek macro-economic balance (full employment
with little inflation) with appropriate monetary and fiscal policies. Only two of these policy objectives can be consistently maintained.
If the authorities try to pursue all three, they will sooner or later be punished by destabilizing financial flows, as in the run
up to the Great Depression around 1930 and in the months before sterling's collapse 1992. If a government tries to stimulate its
economy with lax monetary policy, for example, and players with significant market power like George Soros sense that at a fixed
exchange rate, foreigners will be unwilling to lend enough to finance the country's current account deficit, they will begin to
flee the home currency in order to avoid the capital losses they will suffer if and when there is a devaluation. If reserve losses
accelerate and more players follow suit, crisis ensues. The authorities are forced to devalue, interest rates soar, and the successful
attackers sit back to count their profits.
For nations wishing to retain reasonably independent monetary and fiscal authority in order to cater to domestic needs, the solution
is to allow the exchange rate to move up or down as conditions in the foreign exchange markets dictate, or to establish some sort
of control over the movement of financial instruments in and out of the country, or to devise some combination of these two adjustment
mechanisms. The debate over whether fixed or flexible exchange rates is the wiser policy continues to rage in academic quarters
and in finance ministries all over the world. For the most part, the international business community prefers reasonably fixed exchange
rates in order to minimize their costs of hedging foreign currency positions. Thus instituting some form of control over speculative
financial movements may be an appropriate solution to the "trilemma."
The capacity of a nation to levy enough taxes to finance needed public expenditures is another important reason to retain independent
authority. A central function of government has been to insulate domestic groups from excessive market risks, particularly those
originating in international transactions. This is the way governments have maintained domestic political support for liberalizing
trade and finance throughout the postwar period. Yet many governments are less able today to help citizens that are injured by freer
markets with unemployment compensation, severance payments, and adjustment assistance because the slightest hint of raising taxes
to pay for these vital public services leads to capital flight in a world of heightened financial mobility.
This is a dilemma. Increased integration into the world economy has raised the need of governments to redistribute tax revenues
or implement generous social programs in order to protect the vast majority of the population that remains internationally immobile.
At the same time, governments find themselves less able to maintain the safety nets needed to preserve social stability. It seems
reasonable to suppose, therefore, that doing things that will bolster the ability of governments to levy sufficient taxes - curbing
tax avoidance by transnational corporations, controlling offshore tax havens, regulating capital flight - would help make globalization
slightly more democratic.
Winners and losers
The people who benefit from speculative financial movements are, for the most part, better educated and wealthier than the vast
majority of fellow citizens. They are the elites, whatever the country. As noted above, they have fewer connections to the real
economy of production and exchange than most people. And their purpose in trading financial assets, again for the most part, is
to make a profit quickly rather than wait for an investment project to mature.
People who do not participate directly in the buying and selling of short-term financial instruments are nonetheless influenced
indirectly by the macroeconomic instability and contagion that often accompany interruptions in financial market flows. This is
true for people both in developed and developing countries. In developed countries, the voracious appetite of financial markets
for more and more resources saps the vitality of the real economy - the economy that most people depend upon for their livelihood.
It has been shown that real interest rates rise as a result of the expansion of speculative financial markets. This rise in real
interest rates, in turn, dampens real investment and economic growth while serving to concentrate wealth and political power within
a growing worldwide rentier class (people who depend for their income on interest, dividends, and rents).23
Rather, the long-term health of the economy depends upon directing investable funds into productive investments rather than into
speculation.
In developing countries, attracting global investors' attention is a mixed blessing. Capital market inflows provide important
support for building infrastructure and harnessing natural and human resources. At the same time, surges in money market inflows
may distort relative prices, exacerbate weakness in a nation's financial sector, and feed bubbles. As the 1997 Asian crisis attests,
financial capital may just as easily flow out of as into a country. Unstable financial flows often lead to one of three kinds of
crises:
Fiscal crises. The government abruptly loses the ability to roll over foreign debts and attract new foreign loans, possibly
forcing the government into rescheduling or default of its obligations.
Exchange crises. Market participants abruptly shift their demands from domestic currency assets to foreign currency assets,
depleting the foreign exchange reserves of the central bank in the context of a pegged exchange rate system.
Banking crises. Commercial banks abruptly lose the ability to roll over market instruments (i.e., certificates-of-deposit)
or meet a sudden withdrawal of funds from sight deposits, thereby making the banks illiquid and possibly insolvent.
Although these three types of crises sometimes appear singly, they more often arrive in combination because external shocks or
changed market expectations are likely to occur simultaneously in the market for government bonds, the foreign exchange market,
and the markets for bank assets. Approximately sixty developing countries have experienced extreme financial crises in the past
decade.24
The vast majority of people in the developing world suffer from these convulsive changes. They are tired of adjusting to changes
over which they exercise absolutely no control. Most people in these countries view Western capitalism as a private club, a discriminatory
system that benefits only the West and the elites who live inside "the bell jars" of poor countries. Even as they consume the consumer
goods of the West, they are quite aware that they still linger at the periphery of the capitalist game. They have no stake in it,
and they believe that they suffer its consequences. As Hernando deSoto puts it, "Globalization should not be just about interconnecting
the bell jars of the privileged few."25
Social solidarity
Karl Polanyi in The Great Transformation sought to explain how the "liberal creed" contributed to the catastrophes of war and
depression associated with the first half of the twentieth century. Polanyi's central argument, which in fact can be traced back
to Adam Smith, is that markets do indeed promote efficiency and change, but that they achieve this through undermining social coherence
and solidarity. Markets must therefore be embedded within social institutions that mitigate their negative consequences.
The evidence of more recent times suggests that the global spread of free-market policies has been accompanied by the decline
of countervailing institutions of social solidarity. Indeed, a main feature of the introduction of market-friendly policies has
been to weaken local institutions of social solidarity. Consider, for example, the top-down policy prescriptions of the IMF and
World Bank during the developing world's debt crisis in the 1980s. These policies evolved into an intricate web of expected behaviors
by developing countries. In order for developing countries to expect private businesses and financial interests to invest funds
within their borders and to boost the growth potential of domestic economies, they needed to drop the "outdated and inefficient"
policies that dominated development strategies for most of the postwar period and adopt in their place policies that are designed
to encourage foreign trade and freer financial markets. Without significant adjustments in the ways economies were managed, it was
suggested, nations soon would be left behind.
The list of Washington Consensus requirements was long and daunting:
Make the private sector the primary engine of economic growth
Maintain a low rate of inflation and price stability
Shrink the size of the state bureaucracy
Maintain as close to a balanced budget as possible, if not a surplus
Eliminate or lower tariffs on imported goods
Remove restrictions on foreign investment
Get rid of quotas and domestic monopolies
Increase exports
Privatize state-owned industries and utilities
Deregulate capital markets
Make currency convertible
Open industries, stock, and bond markets to direct foreign ownership
Deregulate the economy to promote domestic competition
Eliminate government corruption, subsidies and kickbacks
Open the banking and telecommunications systems to private ownership and competition
Allow citizens to choose from an array of competing pension options and foreign-run pension and mutual funds.
In a provocative article, Ute Pieper and Lance Taylor point out that market outcomes often conflict with other valuable social
institutions. In addition, they emphasize that markets function effectively only when they are "embedded" in society. The authors
then look carefully at the experience of a number of developing countries as they struggled to comply with the policy prescriptions
of the IMF and the Fund. In almost every case, they demonstrate conclusively that the impact of these efforts was to make society
an "adjunct to the market."26
An appropriate balance is not being struck between the economic and non-economic aspirations of human beings and their communities.
Indeed, the evidence is mounting that globalization's trajectory can easily lead to social disintegration - to the splitting apart
of nations along lines of economic status, mobility, region, or social norms. Globalization not only highlights and exacerbates
tensions among groups; it also reduces the willingness of internationally mobile groups to cooperate with others in resolving disagreements
and conflicts.
Policy options
History confirms that free-markets are inherently volatile institutions, prone to speculative booms and busts. Overshooting,
especially in financial markets, is their normal condition. To work well, free markets need not only regulation, but active management.
During the first half of the post-war era, world markets were kept reasonably stable by national governments and by a regime of
international cooperation. Only lately has a much earlier idea been revived and made an orthodoxy - the idea adopted by the Washington
Consensus that, provided there are clear and well-enforced rules-of-the-game, free markets can be self-regulating because they embody
the rational expectations that participants form about the future.
On the contrary, since markets are themselves shaped by human expectations, their behavior cannot be rationally predicted. The
forces that drive markets are not mechanical processes of cause and effect, as assumed in most of economic theory. They are what
George Soros has termed "reflexive interactions."27 Because markets are governed by highly
combustible interactions among beliefs, they cannot be self-regulating.
The question before us then, is what could be done to better regulate financial markets and to bring active management back into
the task of "embedding" markets in society, rather than the other way around? Monetary authorities such as the Federal Reserve System
in the U.S. and the central banks of other countries were formed long ago in order to dampen the inherent instabilities of financial
market in their home countries. But the evolution of an international regulatory framework has not kept pace with the globalization
of financial markets. The International Monetary Fund was not designed to cope with the volume and instability of recent financial
trends.
Capital controls
Given the problems outlined above about short-term speculative financial transactions, one might wonder why national policy-makers
have not insulated their financial markets by imposing some sort of control over financial capital. The answer, of course, is that
some have continued trying to do so despite discouragement from the IMF. For example, some have put limitations on the quantity,
conditions, or destinations of financial flows. Others have tried to impose a tax on short-term borrowing by national firms from
foreign banks. This is said to be "market-based" because it operates by altering the cost of foreign funds. If such transactions
were absolutely prohibited, they would be called "non-market" interventions.
A more extreme form of financial capital controls, one that controls movement of foreign exchange across international borders,
also has been tried in a number of countries. This form of control requires that some if not all foreign currency inflows be surrendered
to the central bank or a government agency, often at a fixed price that differs from that which would be set in free market. The
receiving agency then determines the uses of foreign exchange. The absence of exchange controls means that currencies are "convertible."
The neo-liberal argument opposing financial capital controls asserts that their removal will enhance economic efficiency and
reduce corruption. It is based on two basic propositions in economic theory that depend for their proof on perfectly competitive
markets in the real economy and perfectly efficient gatherers and transmitters of information in financial markets. Neither assumption
is realistic in today's world. Indeed, a number of empirical studies have reported the effectiveness of capital controls in controlling
capital flight, curbing volatile capital flows and protecting the domestic economy from negative external developments.
Developing countries have only recently abandoned, or still maintain, a variety of control regimes. Latin American countries
traditionally have used market-based controls, putting taxes and surcharges on selected financial capital movements or tying them
up in escrow accounts. Non-market based restrictions were more common in Asia until the early 1990s. Many commentators believe that
their sudden removal in the early 1990s was a contributing cause to the Asian financial crises in 1997-8. The experience of two
countries, Malaysia and Chile, with capital controls is especially instructive.
Malaysia, unlike its Asian neighbors, was reluctant to remove its restrictions on external borrowing by national firms unless
they could show how they could earn enough foreign exchange to service their debts. Then when the Asian crises hit, its government
imposed exchange controls, in effect making its local currency that was held outside the country inconvertible into foreign exchange.
After the ringget was devalued, exporters were required to surrender foreign currency earnings to the central bank in exchange for
local currency at the new pegged rate. The government also limited the amount of cash nationals could take abroad, and it prohibited
the repatriation of earnings on foreign investments that had been held for less than one year. Thus, Malaysia's capital controls
were focused mostly on controlling the outflow of short-term financial transactions. Happily, the authorities were able to stabilize
the currency and reduce interest rates, leading to a degree of domestic recovery.28
Chile, on the other hand, tried to limit the inflow of short-term financial transactions. It did so by imposing a costly reserve
requirement on foreign-owned capital held in the country for less than one year. Despite attempts to stimulate foreign direct investment
of the funds, most of the reserve deposits were absorbed in the form of increased reserves at the central bank. In turn, this created
a potential for expanding the money supply, which the government feared would lead to inflation. Rather than allow this to happen,
the government "sterilized" the inflows by selling government bonds from its portfolio. But this pushed down the prices of bonds
and pushed up the interest rates on them, discouraging business investment. Finally, when prices of copper (Chile's primary export)
fell sharply in 1998, the control regime was scrapped.29
The tobin tax
A global tax on international currency movements was first proposed by James Tobin, a Yale University economist, in 1972.30
He suggested that a tax of one-quarter to one percent be levied on the value of all currency transactions that cross national borders.
He reasoned that such a tax on all spot transactions would fall most heavily on transactions that involve very short round-trips
across borders. In other words, it would be speculators with very short time-horizons that the tax would deter, rather than longer-term
investors who can amortize the costs of the tax over many years. For example, the yearly cost of a 0.2 percent round trip tax would
amount to 48 percent of the value of the traded amount if the round trip were daily, 10 percent if weekly and 2.4 percent if monthly.
Since at least eighty percent of spot transactions in the foreign exchange markets are reversed in seven business days or less,
the tax could have a profound effect on the costs of short-term speculators.
Of course, for those who believe in the efficiency of markets and the rationality of expectations, a transactions tax would only
hinder market efficiency. They argue that speculative sales and purchases of foreign exchange are mostly the result of "wrong" national
monetary and fiscal policies. While we readily admit that national policies sometimes do not accord with desired objectives, they
nonetheless have little relevance for speculators focused on the next few seconds, minutes or hours.
Tobin did not intend for his proposal to involve a supranational taxation authority. Rather, governments would levy the tax nationally.
In order to make the tax rate uniform across countries, however, an international agreement would have to be entered into by at
least the principal financial centers. The revenue obtained from the tax could be designated for each country's foreign exchange
reserve for use during periods of instability, or it could be directed into a common global fund for uses like aid to the poorest
nations. In the latter case, the feasibility of the tax also would depend on an international political agreement. The revenue potential
is sizeable, and could run as high as $500 billion annually.
There are two other advantages often cited by proponents of the Tobin tax. Tobin's original rationale for a foreign exchange
transactions tax was to enhance policy autonomy in a world of high financial capital mobility. He argued that currency fluctuations
often have very significant economic and political costs, especially for producers and consumers of traded goods. A Tobin tax, by
breaking the condition that domestic interest rates may differ from foreign interest rates only to the extent that the exchange
rate is expected to change (see p. 10), would allow authorities to pursue different policies than those prevailing abroad without
exposing them to large exchange rate movements. More recent research suggests that this is only a very modest advantage.31
An additional advantage of the tax is that it could facilitate the monitoring of international financial flows. The world needs
a centralized data-base on all kinds of financial flows. Neither the Bank for International Settlements nor the IMF has succeeded
in providing enough information to monitor them all. This information should be regularly shared among countries and international
institutions in order to collectively respond to emerging issues.
The feasibility issues raised by the Tobin tax are more political than technical. One of the issues is about the likelihood of
evasion. All taxes suffer some evasion, but that has rarely been a reason for avoiding them. Ideally all jurisdictions should be
a party to any agreement about a common transactions tax, since the temptation to trade through non-participating jurisdictions
would be high. Failing that, one could levy a penalty on transactions with "Tobin tax havens" of, say, double the normal tax rate.
Moreover, one could limit the problem of substituting untaxed assets for taxed assets by applying the tax to forwards, swaps and
possibly other contracts.
Tobin and many others have assumed that the task of managing the tax should be assigned to the IMF. Others argue that the design
of the tax is incompatible with the structure of the IMF and that the tax should be managed by a new supranational body. Which view
will prevail depends upon the resolution of other outstanding issues. The Tobin tax is an idea that deserves careful consideration.
It should not be dismissed as too idealistic or too impractical. It addresses with precision the problems of excessive instability
in the foreign exchange markets, and it yields the additional advantage of providing a means to assist those in greater need.
Reforming the IMF
The IMF was established in 1944 to provide temporary financing for member governments to help them maintain pegged exchange rates
during a period of internal adjustment. With the collapse of the pegged exchange rate regime in 1971, that responsibility has been
eclipsed by its role as central arbiter of financial crises in developing countries. As noted above (p. 20), these crises may be
of three different kinds: fiscal crises, foreign exchange crises, and banking crises.
Under current institutional arrangements, a nation suffering a serious fiscal crisis that could easily lead to default must seek
temporary relief from its debts from three different (but interrelated) institutions: the IMF, which is sometimes willing to renegotiate
loans in return for promises to adopt more stringent policies (see above); the so-called Paris Club that sometimes grants relief
on bilateral (country to country) credits; and the London Club that sometimes gives relief on bank credits. This is an extremely
cumbersome process that fails to provide debtor countries with standstill protection from creditors, with adequate working capital
while debts are being renegotiated, or with ways to ensure an expeditious overall settlement. The existing process often takes several
years to complete.
There is a growing consensus that this problem is best resolved with creation of a new international legal framework that provides
for de facto sovereign bankruptcy. This could take the form of an International Bankruptcy Code with an international bankruptcy
court, or it could involve a less formal functional equivalent to its mechanisms: automatic standstills, priority lending, and comprehensive
reorganization plans supported by rules that do not require unanimous consent. Jeffrey Sachs recommends, for example, that the IMF
issue a clear statement of operating principles covering all stages of a debtor's progression through "bankruptcy" to solvency.
A new system of emergency priority lending from private capital markets could be developed, he suggests, under IMF supervision.
He also feels that the IMF and member governments should develop model covenants for inclusion in future sovereign lending instruments
that allow for priority lending and speedy renegotiation of debt claims.32
At the Joint Meeting of the IMF and the World Bank in September, 2002, the policy committee directed the IMF staff to develop
by April, 2003, a "concrete proposal" for establishing an internationally recognized legal process for restructuring the debts of
governments in default. It also endorsed efforts to include "collective action" clauses in future government bond issues to prevent
one or two holdout creditors from blocking a debt-restructuring plan approved by a majority of creditors. The objective of both
proposals is to resolve future debt crises quickly and before they threaten to destabilize large regions, as happened in Southeast
Asia in 1997-98.
Member countries rarely receive support from the IMF any longer to maintain a particular nominal exchange rate. Because financial
capital is so mobile now, pegged exchange rates probably are unsupportable. But there are special times when the IMF still might
give such support during a foreign exchange crisis. International lending to support a given exchange rate is legitimate if the
government is trying to establish confidence in a new national currency, or if its currency is recovering from a severe bout of
hyperinflation. Ordinarily the foreign exchange should be provided from an international stabilization fund supervised by the IMF.
National central banks usually supervise and regulate the domestic banking sector. Thus, banking crises normally are handled
by domestic institutions. This may not be possible, however, if the nation's banks hold large short-term liabilities denominated
in foreign currencies. If the nation's central bank has insufficient reserves of foreign currencies to fund a large outflow of foreign
currencies, there may be circumstances when the IMF or other lenders may wish to act as lenders-of-last-resort to a central bank
under siege. Nations like Argentina that have engaged in "dollarization" are learning about the downside risks of holding large
liabilities denominated in foreign currencies. The best way to avoid this problem is for governments and central banks to restrict
the use of foreign currency deposits or other kinds of short-term foreign liabilities at domestic banks.
Overall, what is most needed is the availability of more capital in developing countries and much quicker responses, amply funded,
to emerging financial crises.. George Soros has argued powerfully that the IMF needs to establish a better balance between crisis
prevention and intervention.33 The IMF has made some progress in prevention by introducing
Contingency Credit Lines (CCLs). The CCL rewards countries that follow sound policies by giving them access to IMF credit lines
before rather than after a crisis erupts. But CCL terms were set too high and there have been no takers. Soros also has recommended
the issuance of Special Drawing Rights (SDRs) that developed-countries would donate for the purpose of providing international assistance.
Its proceeds would be used to finance "the provision of public goods on a global scale as well as to foster economic, social, and
political progress in individual countries."34
A growing number of civil society institutions, however, oppose giving more money to the IMF unless it is basically reformed.
They point out that it is a committed part of the Washington Consensus, the application of whose policies have made societies adjuncts
of the market. They see the IMF as an instrument of the U.S. government and its corporate allies. The conditions it attaches to
loans for troubled countries often do more to protect the interests of first world investors than to promote the long-term health
of the developing countries. The needed chastening of speculative investors does not occur under these circumstances. There is evidence
that in several major crises, IMF requirements for assisting nations have in fact worsened the situation and protracted the crises.
The IMF opposed the policies that enabled Malaysia to weather the crisis in Southeast Asia, for example, while it urged the failed
policies of other Southeast Asian nations. The vast literature cited by Pieper and Taylor (p. 22) is a convincing chronicle of earlier
missteps. For such reasons as these, some civil society institutions argue that, unless IMF policies are changed, giving the institution
more money will do more harm than good.
Fortunately, the IMF's policies are beginning to change, partly as a result of criticisms by civil society institutions, but
more through recognition of the seriousness of the problems with the present system. In the wake of recent financial crises, leaders
in the IMF as well as the World Bank are looking for ways to reform the international financial architecture. Arguably, their emphasis
is shifting away from slavish devotion to the prescriptions of the Washington Consensus and toward more state intervention in financial
markets. Joseph Stiglitz, the Nobel Laureate who has been particularly critical of the IMF, nonetheless acknowledges that its policy
stances are improving.35
The IMF has begun to recognize the importance of at least functional public interventions in markets and the need to provide
more supporting revenues. It has realized that controls on external financial movements and prudent regulation can help contain
financial crises. It has abandoned the doctrine, long the backbone of structural adjustment policies, that raising the local interest
rate will stimulate saving and thereby growth. Both the IMF and the World Bank have rolled over or forgiven the bulk of official
debt owed by the poorest economies.
Whether these and other promising changes in IMF thinking and policy formation are sufficient to assure that its future responses
to crises will be benign still is not clear. While celebrating what they view as belated improvements, many critics of the IMF among
civil society institutions are not convinced that they are sufficiently basic. Even if the IMF avoids repeating some of its more
egregious mistakes, some believe that it is likely to continue to function chiefly for the benefit of the international financial
community rather than the masses of people. Rather, they believe that, at least in the long term, it would be much better for control
over international finance to reside in new institutions under a restructured United Nations. They favor the U.N. because it has
a broader mandate, is more open and democratic, and, in its practice, has given much greater weight to human, social, and environmental
priorities.
Many civil society institutions want the primary focus of reform to be on taming speculation, restoring the control of their
economies to nations, and embedding economies in the wider society. They believe that if these policies are adopted there will be
less need for large funding to deal with financial crises. There remains, however, the fact that such crises are occurring and will
continue to occur for some time. The IMF is the only institution positioned to respond to these crises. Hence, even for those who
sympathize with the goals of the civil society institutions, there is a strong argument for more financing for the IMF.
A world financial authority
A variety of public and private citizens and institutions have recently proposed the establishment of a World Financial Authority
(WFA) to perform in the domain of world financial markets what national regulators do in domestic markets. Some believe it should
be built upon the foundation of global financial surveillance and regulation that have already been laid by the Bank for International
Settlements in Basel, Switzerland. Others regard it as a natural extension of the activities of the IMF. Still others are less interested
in the precise institutional form it would take than in the clear delineation of the tasks that need to be done by someone.
Its first task probably should be to provide sufficient and timely financial assistance during crises to avert contagion and
defaults. This requires a lender-of-last-resort with sufficient resources and authority to disperse rescue money quickly. Perhaps
the best example to date is the bailout loan to Mexico by the U.S. Treasury and the IMF at the end of 1994. It supplied sufficient
liquidity for Mexico to make the transition back to stability and to pay back the loans ahead of time. The management of the Asian
crises in 1997-8, on the other hand, was badly handled. The bailout packages offered by the IMF were not only significantly smaller
than in the Mexico case; they also were constrained with so many conditions that a year later only twenty percent of the funds had
been disbursed. This slow response to the crisis probably worsened the contagion. Surprisingly, the error was repeated in the Russian
crisis in 1998 and the Brazilian crisis in 1999.
A World Financial Authority also should provide the necessary regulatory framework within which the IMF or a successor institution
can develop as a lender-of-last-resort. As long as domestic regulatory procedures function properly, there will be no need for a
world authority to be involved, any more than to certify that domestic regulatory procedures are effective. In countries where domestic
financial regulation is unsatisfactory, the WFA would assist with regulatory reform. In this way, the WFA could aid financial reconstruction,
reduce the likelihood of moral hazard, and give confidence to backers of the operation.
There is little appetite today, especially in Washington, to create a new international bureaucracy. This fact gives support
to the idea of building the WFA from the existing infrastructure of the Bank for International Settlements (BIS). The BIS is a meeting
place for national central bankers who have constructed an increasingly complicated set of norms, rules and decision-making procedures
for handling and preventing future crises. Its committees and cooperative cross-border regulatory framework enjoy the confidence
of governments and of the financial community. It may well be the best place to govern an international regulatory authority at
the present time.
Theological and ethical considerations
While Christian theology cannot provide us with detailed recommendations on how to correct the adverse consequences of speculative
financial movements, it can provide us with an empowering perspective or worldview. Our theological expressions of the faith describe
the source of our spiritual energy and hope. They betray our ultimate values and the source of our ethical norms. They shape how
we perceive and judge the "signs of the times."
God's world and human responsibilities
Nothing in creation is independent of God. "The earth is the Lord's and all that is in it, the world, and all those who live
in it." (Ps. 24:1 NRSV) Thus, no part of the creation - whether human beings, other species, the elements of soil and water, even
human-made things - is our property to use as we wish. All is to be treated in accord with the values and ground rules of a loving
God, their ultimate owner, who is concerned for the good of the whole creation. All of God's creation therefore deserves to be treated
with appropriate care and concern, no matter how remote from one's daily consciousness or existence.
The doctrine of creation reminds us that our ultimate allegiance is not to the nationalistic and human-centered values of our
culture, but rather to the values of the loving Maker of heaven and earth. When we seek plenty obsessively, consume goods excessively,
compete against others compulsively, or commit ourselves to Economic Fate, we are worshiping false gods. Modern idolatries are often
encountered in economic forms, just as in the New Testament's warnings about the spiritual perils of prosperity in the parables
of the rich, hoarding fool (Luke 12:15-21) and the rich youth (Matt. 19:16-24 and Luke 18:18-25).
The fact that so much of financial speculation is divorced from the real economy of production and exchange suggests that its
paper transactions are more like bets in a casino than an essential component of God's real economy, which seeks the good of all
creation. It is wrong to subject people to the effects of wholesale gambling. The fact that the practice of financial speculation
is secretive, compulsively competitive, and frequented by lone rangers, moreover, hints at a cult of false idols. Its practitioners,
including especially day-traders, seem interested only in exceedingly short-term personal financial advantage, unconcerned about
the long-term consequences of their actions or their impact on others. This also indicates a degree of idolatry that contradicts
the doctrine of creation.
Image of God
The conviction that human beings have a God-given dignity and worth (Gen. 1:26-28) unites humanity in a universal covenant of
rights and responsibilities - the family of God. All humans are entitled to the essential conditions for expressing their human
dignity and for participation in defining and shaping the common good. These rights include satisfaction of basic biophysical needs,
environmental safety, full participation in political and economic life, and the assurance of fair treatment and equal protection
of the laws. These rights define our responsibilities in justice to one another, locally, nationally and - because they are human
rights - internationally.
Financial speculation often leads to unmanageable floods of funds into and out of host societies, creating unwanted bubbles and
panics. Financial speculators normally ignore the human consequences of their activities on the rights of people in host societies,
where economic adjustments are shared widely and painfully. Their primary interest is short-term personal financial gain. The absence
of a sense of covenantal unity with their brothers and sisters of the developing world is a sad commentary on the governing ethic
of speculators in the capital markets. Their arrogance calls for some form of control over foreign exchange and financial capital
markets.
Justice in covenant
The rights and responsibilities associated with the image of God are inextricably tied to the stress on justice in Scripture
and tradition. We render to others their due because of our loving respect for their God-given dignity and value. The God portrayed
in Scripture is the "lover of justice" (Ps. 99:4, 33:5, 37:28, 11:7; Isa. 30:18, 61:8; Jer. 9:24). Justice is at the ethical core
of the biblical message. Faithfulness to covenant relationships, moreover, demands a justice that recognizes special obligations,
"a preferential option" to widows, orphans, the poor, and aliens, which is to say the economically vulnerable and politically oppressed.
Hence, the idea of the Jubilee Year (Lev. 25) was meant to prevent unjust concentrations of power and poverty. Jesus' ministry embodies
concern for the rights and needs of the poor; He befriended and defended the dispossessed and the outcasts.
The fact that the liberalization of trade and finance has failed to improve the distribution of incomes, indeed, that it has
widened the gap between rich and poor in virtually every country, is not a sign of distributive justice but of its opposite. The
standard of living for the least skilled, least mobile, and poorest citizens of many developing countries has declined absolutely.
This, too, is an unjust result of a broken system. The fact that governments that wish to assist the vulnerable and weak of their
societies are less able to do so, in part because they no longer can levy sufficient taxes on foreign interests, is a violation
of justice in community.
Sin and judgment
Sin is a declaration of autonomy from God, a rebellion against the sovereign source of our being. It makes the self and its values
the center of one's existence, in defiance of God's care for all. Sin tempts us to value things over people, measuring our worth
by the size of our wealth and the quantity of goods we consume, rather than by the quality of our relationships with God and with
others. Sin involves injustice because its self-centeredness defies God's covenant of justice, grasping more than one's due and
depriving others of their due.
Sin is manifested not only in individuals, but also in social institutions and cultural patterns. These structural injustices
are culturally acceptable ways of giving some individuals and groups of people advantage over others. Because they are pervasive
and generally invisible, they compel our participation. They benefit some and harm many others. Whether or not we deserve blame
as individuals and churches for these social sins depends in part on whether we defend or resist them, tolerate or reject them.
The fact that the freeing of financial markets has permitted financial speculators to engage in high-risk gambles without regard
to the consequences for others is abundant evidence of both individual and institutional sin. The policies of the Washington Consensus
frequently lead to adverse consequences for the poor and the environment, even as its proponents gain advantages from the implementation
of such policies. They are another serious expression of social sin in our time. These policies inevitably increase the concentration
of economic power in fewer hands. The fact that the global spread of free-market policies has led to the decline of countervailing
institutions of
social solidarity means that it is easier for the centers of economic power to corrupt governments, control markets, alienate
neighbors, manipulate public opinion, and contribute to a sense of political impotency in the public.
The Church's mission and hope
The church is called to be an effective expression of the Reign of God, which Jesus embodied and proclaimed. This ultimate hope
is a judgment on our deficiencies
and a challenge to faithful service. God's goal of a just and reconciled world is not simply our final destiny but an agenda
for our earthly responsibilities. We are called to be a sign of the Reign of God, on earth as it is in heaven, to reflect the coming
consummation of God's new covenant of shalom to the fullest extent possible.
A new financial architecture
In her path-breaking book, Casino Capitalism,36 Susan Strange likens the Western financial
system to a vast casino. As in a casino,
"the world of high finance today offers the players a choice of games. Instead of roulette, blackjack, or poker, there is dealing
to be done - the foreign-exchange market and all its variations; or in bonds, government securities or shares. In all these markets
you may place bets on the future by dealing forward and by buying or selling options and all sorts of other recondite financial
inventions. Some of the players - banks especially - play with very large stakes. There are also many quite small operators. There
are tipsters, too, selling advice, and peddlers of systems to the gullible. And the croupiers in this global finance casino are
the big bankers and brokers. They play, as it were, "for the house.' It is they, in the long run, who make the best living."
She goes on to observe that the big difference between ordinary kinds of gambling and speculation in financial markets is that
one can choose not to gamble at roulette or poker, whereas everyone is affected by "casino capitalism." What goes on in the back
offices of banks and hedge funds "is apt to have sudden, unpredictable and unavoidable consequences for individual lives."
It is this volatility, this instability in financial markets that has given rise to recurring financial crises. They must be
tamed. In the wake of recent financial crises, people are beginning to look for ways to reform the international financial architecture.
Although it is difficult to move from general theological convictions to specific proposals, we offer the following suggestions
for consideration by Christians and other persons of good will.
Capital controls should be an integral part of national strategies to tame the financial system. They can be made an effective
and meaningful tool to protect and insulate the domestic economy from volatile capital flows and other negative external developments.
Regulatory and supervisory measures should supplement capital controls when appropriate. They should include regulation
of financial derivatives and hedge funds. Regulation is a necessary complement to domestic capital controls. Nations influenced
by hedge funds and their complex financial instruments should seek international cooperation, including the governments of host
countries, to regulate their practices.
A new international legal framework should be created, which provides for de facto sovereign bankruptcy. The existing international
system for dealing with insolvent governments is woefully inadequate. Provision must be made for automatic standstills, priority
lending, and planned reorganizations.
An international transactions tax (like the Tobin tax) should be designed and implemented to discourage short-term speculative
capital movements. It is neither "too idealistic" nor "too impractical." It would reduce short-term trading and strengthen the
defensibility of the exchange rate regime.
International cooperation should be sought to curb dubious activities of offshore financial centers. Strict international
regulation and supervision of offshore centers is essential to curb tax and regulatory evasions. They also are a primary conduit
for money laundering and various criminal activities.
The IMF's responsibilities as a lender-of-last-resort should be enhanced, expanding its authority and resources to make
possible quick action to avert financial crises. The IMF must have effective and swift mechanisms to increase the Fund's access
to official monies in times of crisis, including authority to borrow directly from financial markets under those circumstances.
A World Financial Authority based on the cross-border regulatory framework of the Bank for International Settlements should
be developed. It should provide the necessary regulatory framework within which the IMF or a successor organization can develop
as a lender-of-last-resort.
Of these recommendations, perhaps the most controversial is that more funds be given to the IMF. We noted above that much of
the criticism of the IMF is justified. We also acknowledged that the IMF is improving its policies. We hope that these improvements
will continue. Meanwhile, there is no other viable candidate to serve as lender-of-last-resort - an absolutely essential feature
of any new financial architecture.
The major reason some civil society institutions resist funding the IMF further is its history of misguided structural adjustment
policies, policies that are now widely recognized to have caused widespread suffering. We hope that recent changes will improve
this situation as well and enable the IMF to perform the important role we recommend for it.
Along with the World Bank, it is beginning to contextualize its performance criteria and conditionalities, taking much more seriously
the unique circumstances of particular economies. It is listening more and nitpicking less. To be sure, the IMF is not likely to
abandon its policy of making its loans conditional on the adoption by borrowing countries of mutually agreed economic policies.
Even so, there is considerable evidence that when it has had more resources on hand, conditionality has been correspondingly wiser
and less draconian.
The IMF now recognizes that it can leave more decisions to developing countries partly because these have better informed and
more sophisticated employees than was once the case. Certainly in Latin America and Asia and increasingly in Africa, country economic
teams are better qualified technically than the lower rung Ph.D.s from American and European universities to whom the IMF and World
Bank entrust their missions. Local economists can do financial programming and standard macroeconomic modeling as well as or better
than the people from Washington can; they also know how to do investment project analysis. To be sure, decisions about financial
and project plans must include input from many other elements of a society.
We can encourage the IMF (and World Bank) to reverse the typical procedure in setting conditions for multilateral loans. Instead
of waiting for it to specify the policies that must be followed to justify additional financing, country economic teams, in consultation
with other agencies of their government, should be allowed to propose economic programs to the IMF. Disagreements between Washington
staff assessments and the local teams could be resolved directly or by third-party arbitration. The scope of economic conditionality
could also be restricted, for example, just to a balance-of-payments target, while the country could pursue its own agenda regarding
inflation, income distribution, and growth.
What Christians can do
A primary part of the "principalities and powers" referred to in the Bible is composed of the political-economic institutions
and processes that govern how people relate economically to each other and to God's whole creation. The church has a stake in their
design. Yet many church members feel powerless to change basic political-economic reality. They think either that the economic conditions
of society result "naturally" from the forces of markets that are only marginally within the power of human control, or that economic
conditions result from powerful interests that are beyond the reach of ordinary citizens. Thus, there's nothing that can be done
about it, or there's nothing we can do about it.
On the contrary, Mobilization for the Human Family believes that the political economy is shaped by deliberate social policy
decisions; that conditions at any given time are the result of those decisions; that conditions can be changed by human decisions;
and that the will of a nation's and the world's citizens about what the commitments and purposes of the nation and the world should
be can be expressed in the political economy through the framework of democratic process provided in our national and transnational
polity. Accordingly, we offer below some suggestions for action that may be taken by individual Christians and by our churches and
their denominations to correct some correctable flaws of financial globalization.
Actions by individual Christian
Pray for persons working in governments, international organizations, institutions, and non-governmental organizations who
are trying to work toward a better world, including especially a world financial architecture that better assures fairness in
capital markets.
In the management of personal and family investments, seek fuller understanding of the uses to which the banks, companies,
mutual funds, and investment counselors are putting your money. Avoid speculative investments that are likely to be made without
regard to their consequences for others.
Reflect upon decisions about work and career choices that are consistent with a Christ-like commitment to economic justice
for all.
Organize Bible study in your local congregation, where possible together with people of other backgrounds and life-styles,
to learn and identify with God's continuing struggle to seek economic justice in the world.
Commit oneself to some voluntary organization that is trying to promote greater economic justice in the local and/or global
economy.
Become involved politically in your area or nation, seeking political and economic change in the direction of economic justice.
Actions by churches and denominations
Concern for economic justice must be fully reflected in the prayer life, worship, and educational programs and mission outreach
of all congregations.
Seek assistance from members who work for banks, brokerage houses, and mutual funds to help mould an educational program
that will assist members of the congregation to become more socially responsible investors.
Seek collaborative programs among clusters of congregations, perhaps with the aid of local Councils of Churches, to provide
educational opportunities where Christians and other faith groups can come to understand some of the complex economic issues
amidst which they live and work. Since virtually nothing is now available to explain the problems of financial speculation,
this paper could be used to assist study of this phenomenon.
Over and beyond educational programs, local churches - again perhaps best working together in the same neighborhood or town
- can enter into a deliberate dialogue or partnership with one or more voluntary bodies in the civic society, so as to put their
energies into the health of the wider society. Engagement with the International Forum on Globalization (l009 General Kennedy
Avenue #2, San Francisco, CA 94129) is a good way to explore the means of influencing the debate on the globalization of trade
and finance.
At the denominational level, churches should review their investment criteria to reassure themselves that social responsibility
is a primary goal of their financial management.
Also at the denominational level, agencies responsible for the formation of social witness policies need to monitor global
economic indicators on a continuing basis in order to assist its programmatic agencies to form effective and timely social witness
regarding the local and national consequences of the globalization of trade and finance.
Want to know more?
Globalization is a vast topic. For a general introduction, see Sarah Anderson and John Cavanagh, Field Guide to the Global Economy
(New York: New Press, 2000) and Thomas Friedman, The Lexus and the Olive Tree: Understanding Globalization (New York: Farrar Straus
Giroux, 1999). A classic introduction to the financial side of globalization is Susan Strange, Casino Capitalism, (New York: Mnchester
University Press, 1986). See also Kavaljit Singh, The Globalisation of Finance: A Citizen's Guide (London: Zed Books, 1999) and
John Eatwell and Lance Taylor, Global Finance at Risk: The Case for International Regulation (New York: The New Press, 2000). The
best introduction to the Tobin Tax is Mahbub ul Haq et al (eds), The Tobin Tax: Coping with Financial Volatility (New York: Oxford
University Press, 1996). For how church people might react, see Pamela Brubaker, Globalization at What Price? (Cleveland: Pilgrim
Press, 2001).
Questions For Discussion
How have the linkages and interconnections of international finance impacted your life? On balance, do you regard them as
advantages or disadvantages for a healthy Christian life?
The frequency and severity of recent financial crises have fueled calls for a radical redesign of the rules of global finance.
If you were the advisor to an international commission asked to design "A New International Financial Architecture," what would
you recommend?
Do you favor allowing sovereign nations to declare bankruptcy? What Christian traditions might be invoked to support or
deny such an action?
A growing number of civil society institutions oppose giving more money to the IMF. They point out that it is part of the
Washington Consensus, the application of whose policies have made societies adjuncts of the market. Yet this paper suggests
that the IMF needs more money. As a committed Christian, which view do you favor?
Is it too late to expect justice in a globalizing world? Since much of the direction the global economy has taken is irreversible,
how can a balance between market and society be negotiated? How might Christians play a role in those negotiations?
"... By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends much of her time in
Asia and is currently working on a book about textile artisans. ..."
"... The Unbanking of America: How the New Middle Class Survives ..."
Posted on
December 4, 2017 by Jerri-Lynn ScofieldBy Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends much of her time in Asia
and is currently working on a book about textile artisans.
Three Democrats and three Republicans have co-sponsored a resolution, under the Congressional Review Act (CRA), to scuttle the
Consumer Financial Protection Bureau's payday lending rule.
CRA's procedures to overturn regulations had been invoked, successfully, only once before Trump became president. Congressional
Republicans and Trump have used CRA procedures multiple times to kill regulations (as I've previously discussed (see
here ,
here ,
here and here ). Not
only does CRA provide expedited procedures to overturn regulations, but once it's used to kill a regulation, the agency that promulgated
the rule is prevented from revisiting the issue unless and until Congress provides new statutory authority to do so.
Payday Lending
As I wrote in an extended October post,
CFPB Issues Payday Lending Rule: Will it Hold, as the Empire Will Strike Back, payday lending is an especially sleazy part of
the finance sewer, in which private equity swamp creatures, among others, operate. The industry is huge, according to this
New York Times report I quoted
in my October post, and it preys on the poorest, most financially-stressed Americans:
The payday-lending industry is vast. There are now more payday loan stores in the United States than there are McDonald's restaurants.
The operators of those stores make around $46 billion a year in loans, collecting $7 billion in fees. Some 12 million people,
many of whom lack other access to credit, take out the short-term loans each year, researchers estimate.
The CFPB's payday lending rule attempted to shut down this area of lucrative lending– where effective interest rates can spike
to hundreds of points per annum, including fees (I refer interested readers to my October post, cited above, which discusses at greater
length how sleazy this industry is, and also links to the rule; see also this
CFPB fact sheet
and press
release .)
Tactically, as with the ban on mandatory arbitration clauses in consumer financial contracts– an issue I discussed further in
RIP, Mandatory Arbitration
Ban , (and in previous posts referenced therein), the CFPB under director Richard Cordray made a major tactical mistake in not
completing rule-making sufficiently before the change of power to a new administration- 60 "session days" of Congress, thus making
these two rules subject to the CRA.
The House Financial Services Committee
press release lauding
introduction of CRA resolution to overturn the payday lending rule is a classic of its type, so permit me to quote from it at length:
These short-term, small-dollar loans are already regulated by all 50 states, the District of Columbia and Native American tribes.
The CFPB's rule would mark the first time the federal government has gotten involved in the regulation of these loans.
.
House Financial Services Committee Chairman Jeb Hensarling (R-TX), a supporter of the bipartisan effort, said the CFPB's rule
is an example of how "unelected, unaccountable government bureaucracy hurts working people."
"Once again we see powerful Washington elites using the guise of 'consumer protection' to actually harm consumers and make
life harder for lower and moderate income Americans who may need a short-term loan to keep their utilities from being cut off
or to keep their car on the road so they can get to work," he said. "Americans should be able to choose the checking account they
want, the mortgage they want and the short-term loan they want and no unelected Washington bureaucrat should be able to take that
away from them."
[Rep Dennis Ross, a Florida Republican House co-sponsor]. said, "More than 1.2 million Floridians per year rely on Florida's
carefully regulated small-dollar lending industry to make ends meet. The CFPB's small dollar lending rule isn't reasonable regulation
-- it's a de facto ban on what these Floridians need. I and my colleagues in Congress cannot stand by while an unaccountable federal
agency deprives our constituents of a lifeline in times of need, all while usurping state authority. Today, we are taking bipartisan
action to stop this harmful bureaucratic overreach dead in its tracks."
"The rule would leave millions of Americans in a real bind at exactly the time need a fast loan to cover an urgent expense,"
said Daniel Press, a policy analyst with the Competitive Enterprise Institute, in a statement after the bill's introduction.
Consumer advocates think otherwise (also from CNBC):
"Payday lenders put cash-strapped Americans in a crippling cycle of 300 percent-interest loan debt," Yana Miles, senior legislative
counsel at the Center for Responsible Lending, said in a statement.
Prospects Under CRA
When I wrote about this topic in October, much commentary assumed that prospects for CRA overturn were weak. I emphasized instead
the tactical error of failing to insulate the rule from CRA, which could have been done if the CFPB had pushed the rule through well
before Trump took office:
If the payday rule had been promulgated in a timely manner during the previous administration it would not have been as vulnerable
to a CRA challenge as it is now. Even if Republicans had then passed a CRA resolution of disapproval, a presidential veto would
have stymied that. Trump is an enthusiastic proponent of deregulation, who has happily embraced the CRA– a procedure only used
once before he became president to roll back a rule.
Now, the Equifax hack may have changed the political dynamics here and made it more difficult for Congressional Republicans–
and finance-friendly Democratic fellow travellers– to use CRA procedures to overturn the payday lending rule.
The New York Times certainly seems to think prospects for a CRA challenge remote:
The odds of reversal are "very low," said Isaac Boltansky, the director of policy research at Compass Point Research & Trading.
"There is already C.R.A. fatigue on the Hill," Mr. Boltansky said, using an acronymn for the act, "and moderate Republicans
are hesitant to be painted as anti-consumer.
I'm not so sure I would take either side of that bet. [Jerri-Lynn here: my subsequent emphasis.]
A more telling element than CRA-fatigue in my assessment of the rule's survival prospects was my judgment that Democrats wouldn't
muster to defend the payday lending industry– although that assumption has not fully held, as this recent
American Banker account makes clear:
After the
payday rule was finalized in October , it was widely expected that Republicans would attempt to overturn it. It's notable,
though, that the effort has attracted bipartisan support in the House.
.
Passage in the Senate, however, may be a much heavier lift. The chamber's
vote to overturn the arbitration rule in late October came down to the wire, forcing Republicans to call in Vice President
Mike Pence to cast the tie-breaking vote.
Bottom Line
I continue to think that this rule will survive– as the payday lending industry cannot count on a full court press lobbying effort
by financial services interests. Yet as I wrote in October, I still hesitate to take either side of the bet on this issue.
I think this whole article is totally disingenuous. There is a serious need for many Americans to have access to small amount,
short term loans. While, these lenders may appear predatory, they do serve a large sector of society.
Maybe you need to read: The Unbanking of America: How the New Middle Class Survives by
Lisa Servon . It might be worth the read.
Where's the Post Office Bank when you need it. This overturning of the rule is just an effort to stop the Post Office Bank
from gaining traction as the alternative non-predatory source of small loans to the people. Most pay day lender companies are
owned by large financial players.
I agree that's a far better approach and indeed, I discussed the Post Office bank in my October post– which is linked to in
today's post. Permit me to quote from my earlier post:
The payday lending industry preys on the poorest financial consumers. One factor that has allowed it to flourish is current
banking system's inability to provide access to basic financial services to a shocking number of Americans. Approximately 38
million households are un or underbanked– roughly 28% of the population.
Now, a sane and humane political system would long ago have responded with direct measures to address that core problem,
such as a Post Office Bank (which Yves previously discussed in this post,
Mirabile Dictu! Post Office Bank Concept Gets Big Boost and which have long existed in other countries.)
Regular readers are well aware of who benefits from the current US system, and why the lack of institutions that cater to
the basic needs of financial consumers rather than focusing on extracting their pound(s) of flesh is not a bug, but a feature.
So, instead, the United States has a wide-ranging payday lending system. Which charges borrowers up to 400% interest rates
for short-term loans, many of which are rolled over so that the borrower becomes a prisoner of the debt incurred.
With phrasing like "unbanked" or "underbanked", I worry that you've bought into the banking-industry framing of this issue,
which I'm sure is not your intent.
Ordinary people should not need any bank (not even a government or post office bank) for everyday life, with the possible exception
of mortgages. De-financialization of the medium of exchange, and basic payments, is something the public should be fighting for.
I would consider myself an ordinary person and I pay in cash when purchasing day to day items the vast majority of the time
and yet I'd still prefer to deposit my money in a bank rather than hiding it in my mattress for any number of good reasons.
Banks aren't the problem – their predatory executives are.
But there are, or at least ought to be, safe and secure ways to store money other than by lending it to banks or stuffing it
into mattresses. Or carrying wads of cash.
For instance, a debit card (or possibly cell phone) with a secure identity / password can already act as a cashless wallet.
The digital cash could be stored directly on the device, and accounted for through something similar to TreasuryDirect, without
any intermediaries. But this would require the Federal Government to get serious about having a modern Digital Dollar of some
kind (not bitcoin, shudder)
Even better would be State Banks. Every state should have one. I believe the State Bank of North Dakota made money in 2008.
While the TBTF Banks came hat in hand to our Reps. Of course OUR Reps handed them a blank check and told them to "Make it go Away".
However Post Office Banks would be GREAT!!
This is the boilerplate argument that always gets brought up by payday loan defenders, and there is a good bit of truth to
it. However, what you are not mentioning is that there are already far superior options available to pretty much any person who
needs a small, short term loan. That solution is your friendly neighborhood Credit Union, most of which offer very low interest
lines of overdraft coverage. I don't mind saying that it has saved my heiny on more than one occasion. Pay check a little late
in arriving? No problem, transfer $200 from your overdraft account into your checking account on-line and you're good to go. Pay
it back at your convenience, also on-line, at 7% APR.
Payday lenders are legal loansharks. The problems with their predatory lending model and the damage it does to low-income people
are well documented. Simply pointing out that there is a reason that people end up at payday lenders is not a valid justification
for the business practices of those lenders, especially when there are much better alternatives readily available.
Very true! There are several web sites that point out how the fees associated with payday loans raise the effective annual
percentage rate into the stratosphere, ranging from 300% to over 600%. Here's one:
One frustration that I have with legislation in general, and finance legislation in particular, is that it does not tell the
truth, the whole truth and nothing but the truth.
In my Panglossian world, I envision a financial services bill that lays out the following:
Define the problem
Unserviced people: X percent( for discussion, say 10% to make the math easy) of people are un-serviced (or under-, or rapaciously-serviced)
by conventional financial companies, whether banks, credit unions or other, whatever other is conventionally.
Unserviced and don't want: Y percent of that X percent (say, 50% of 10%, so 5%) doesn't want services.
Unserviced and want: 1-Y percent of that X percent (say, 50% of 10%, so 5%) wants services but can not get them. That could be
due to various factors, ranging from bad credit (how defined?, say FICO < 600?) to geographic remoteness (no branches within miles,
no internet, precious little slow mail service, whatever).
Within that deemed unserved 5% of the population, what are the costs to serve and what are the alternatives?
What would an honest service provider need to provide service, accounting for credit risks and the like, and still make a profit
sufficient to induce investment?
If I knew how to make and add a nice graphic, I'd include a waterfall chart here to show the costs and components of the interest
and fees paid in regular and default mode. Sorry, please bear with me as I make up numbers.
Default mode costs:
Interest at 275%
Plus: Fees at 25%
Less: cost of funds 20%
Less: personnel, overhead, etc 5%
Less: added default cost not in personnel etc line, say 25%
Pre-tax profit: 250%
In that little example, who couldn't make money at those rates?
Extending the notion of APR and Truth-In-Lending to include payday lenders and anyone else without a brick-and-mortar branch
who wants to do business in the US, how about mandating some type of honest waterfall chart as dreamt of above?
Then cross-reference and publicize the voting on finance legislation with the campaign contributions from payday people and
their ilk, and layer in the borrower costs and credit scores and other metrics in those Congressional districts and zip+4 codes
and census tracts and whatever other level of granularity will help provide any amount of disinfecting sunlight to help see the
scattering cockroaches.
The problem I suspect is that your "friendly neighborhood credit union" is actually rarely anywhere near the neighborhoods
where people who need these kind of loans live.
They don't have cars and mass transit is non-existent or so slow they couldn't get to the Credit Union during business hours,
and back again, anyway. That's the problem with expecting Private Enterprise to be a solution for people at the bottom. They don't
set up shop where those people live, or the ones that do are not exactly do-gooders.
I just checked and a lot of credit unions let you apply for a loan online, (earlier you can set up membership online). So the
issue of transport and time is lessened assuming folks have some form of net access.
One might ask why there are millions of people reduced to having to get ripped off by payday and auto-title lenders, to somehow
survive from week to week. Maybe because people can't make a living wage? Can't save any money, however prudent and abstemious
they may be? Because inter-citizen cruelty and Calvinism are so very strong a force in this rump of an Empire?
Some of the comments here seem to build on the baseline assumption that's part of the liberal-neoliberal mantra, "You get what's
coming to you (or the pittance we can't quite squeeze out of you yet)".
diptherio, I am guessing you may mean that there are models of better alternatives readily available, like paying
a living wage, a social safety net for the worst off, a postal bank, national health care, stuff like that. I don't see that there
are any alternatives actually available to most real people "on the ground."
You are, of course, correct in that the underlying problem is that so many people are forced to live on so little that they
need payday loans in the first place. Thanks for pointing that out.
My point is simply that in the short-term, as a matter of practicality for those of us who don't always make it until payday
before running out of money, a CU overdraft account is a very good option.
This is a far superior option and thank you for bringing it up. The only problem is most banks and credit unions will not tell
you it exists because they make a lot more money if you just keep bouncing checks.
I only learned about it when I worked for WAMU. We were tasked by management with promoting various new products to customers
as a condition of being paid a monthly bonus which was the only thing that made the job pay enough to live on. Funny, they never
asked us to promote the overdraft line of credit (aka an ODLOC), ever. I do remember one of my managers tell me that circa 2000
or so, WAMUs operating costs for the entire company for the entire year were offset just by the fees they collected off of bounced
checks etc.
The fees or interest you pay for using an ODLOC are a small fraction of what you'd pay for bouncing just one check. IIRC, if
I overdrew by $200 or so and paid it back on my next payday, the interest was generally less than $1. My local credit union has
since added a $5 fee for accessing the ODLOC on top of the interest, but it's still much less than a bounced check fee or interest
on a payday loan. I believe that depending on your credit history, you can get an ODLOC of up to $2500 or so which pretty much
negates the need for any payday loans.
A friend of mine was evicted from her apartment because of a payday loan. She failed to pay it off in full quick enough and
it spiraled out of control tripling in a very short time. I really fail to see how usury is beneficial to society.
Frank Pistone is part of the dying breed known as the American Loan Shark. Not so long ago, the loan shark flourished, offering
short-term, high-interest loans to desperate people with nowhere else to turn. Today, however, Pistone and countless others
like him are being squeezed out by the major credit-card companies, which can offer money to the down-and-out at lower rates
of interest and without the threat of bodily harm
I read Servon's book. It is not a brief on behalf of the payday loan industry. She worked at a couple of payday lenders and
explains how they serve the communities they're in, but a few things need to be noted:
The business she was most sympathetic with was a small, local one with only a couple of storefronts, in an east coast inner
city. The owner and his help knew the customer base, often by name. Much of her sympathy came from her respect for the women who
were dishing out the loans at the windows, not the owners and not the business model. This local joint operated like the most
benign of old time pawnbroker/loansharking operation from the early part of the last century.
Most "Cash America" storefront shops (on shabby, midcentury shopping strips in inner ring scuburbs across the US) aren't this
decent. They aren't "part of a community" in any sense. And the rates are usurious any way, for all of them.
Thank you to Ms. Scofield for continuing to cover this and related businesses. The upper, cleaner part of our finance industry
derives more filthy lucre from these kinds of loan shops than they ever want you to know (sub-prime lending shops, title loans
shops . there are a lot of modalities for fleecing the poor and the near-poor nowadays).
The NC staff must be pleased that it seems like so many subtle apologists for the looters, predators, "intelligence community,"
and so forth, appear to be turning up here early in the opening of new site posts. I'm guessing the Elite are not exactly quaking
in fear that NC's reporting will catalyze some change that might sweep the political economy in the direction of what the mopery
would categorize as "fairness," but still
Raised the dollar definition of middle class and declared a 'new middle class' or could it be 'new middle class' is actually
referring to the 'new middle poor'. The former middle class is desperately trying to avoid a plunge into the pits of the 'poor
poor'. Payday Loan predators are greasing the handrails.
"Where will the money-changers change money if not in the Holy Temple? Aren't we starving the priests of much-needed revenue?
This Jesus guy is totally disingenuous."
In good neo liberal fashion that Jesus dude got exactly what he deserved. The effrontry of that guy to chase those hard working
money lenders out of the temple square. Got exactly what was coming to him.
H.J.Res.122 – Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted
by the Bureau of Consumer Financial Protection relating to "Payday, Vehicle Title, and Certain High-Cost Installment Loans".
December 1, 2017
Sponsor Rep. Ross, Dennis A. [R-FL-15] (Introduced 12/01/2017)
Rep. Hastings, Alcee L. [D-FL-20]
Rep. Graves, Tom [R-GA-14]
Rep. Cuellar, Henry [D-TX-28]
Rep. Stivers, Steve [R-OH-15]
Rep. Peterson, Collin C. [D-MN-7]
Ahhh ..look at this list. TWO Florida lawbreakers introducing this banker bill. And one from Minnesota. Y'all know that Jacksonville,
FL and St. Paul, MN are the two places where the forgeries continue to be provided to the financial crooks? So, it goes to figure
that the lawbreakers are attempting to protect the financial crooks committing forgery in their prospective states! How appro.
If any of these House critters are "representing" you, time for lots of calls to them.
And thanks, SD, for listing them. I always wonder why our vaunted free press so seldom lists the sponsors of legislation when
it's reported on . Hhmm .
m .
I have mixed feelings about this specific issue.
The larger issue of a grossly skewed economic system is what needs to be fixed.
There will always be people that lack common sense and brains regarding money. There will always be people that will take advantage
of that.
I don't know how or why you would try and legislate that away.
We need to move in the direction of solving the biggest problems and not get wrapped up in the little problems.
The numbers above sound horrendous, but 7 billion in profit on 46 billion loaned is 14% return. Credit card companies are worse.
7 billion in profit off of 12 million people is $600 per person. Alot for poor folks I recognize, but not necessarily life shattering
for all.
The "system" loves to wrangle around with issues like this (trivial in my mind) so the handful of big ones go unattended.
some have apparently not felt it necessary to bail out family members for aggressive, egregious and immediate interest rates
and escalations charged by these scammers
but there certainly appears concerted effort by (likely) shills to perpetuate scams (and to discredit Consumer Financial Protection
Agency and Liz Warren )
I think there's an error in the original article, where it says:
CRA's procedures to overturn legislation had been invoked, successfully, only once before Trump became president. Congressional
Republicans and Trump have used CRA procedures multiple times to kill regulations (emphasis added)
My understanding is that CRA gives Congress the power to overturn executive branch regulations , not legislation
(which Congress already can overturn anyway). Is that incorrect?
P.S. It's sad that it might not even matter. Nowadays the public can't tell the difference between regulations (written by
unaccountable, unelected officials who take the revolving door back to working at the firms they regulated) and legislation (written
by unaccountable, only notionally elected politicians who get paid off in various ways by lobbyists for the same firms)
You're correct– fixed it! Slip of the fingers there that I didn't catch when I proofread the post. As the rest of the paragraph
makes clear, CRA procedures are used to overturn regulations.
Thanks for reading my work so carefully and drawing the error to my attention.
Finally bipartisan!
Trump loves it
Obomber woulda loved it
She who cannot be named woulda loved it, too.
Time for them all to get over that little spat she did it before trump should appoint her to something useful I bet she'd love
secdef
Where is the lovely Debbie Wasserman schultz in all of this? She has not surprisingly been a leading cheerleader for these
pay day lender sharks. but hey, what the hey, the lobby money is good!
"... iLevel gives PE firms unprecedented ability to cook the books of their portfolio companies while maintaining a facade of compliance. ..."
"... refrain from self- dealing, usurpation of corporate opportunity and any acts that would permit them to receive an improper personal benefit or injure their constituencies ..."
"... Fraud is the basis of the economic system in Western society in 21st Century. It is now so accepted that no prosecutions take place except for those who publicise the fact. ..."
"... We are well aware that most corporate bankruptcies result from Fraud and so did the Greenspan Bust after 2006 which followed on from the Great Greenspan Orgy after 1999 ..."
"... Private Equity a Formula for Fraud. Abuses in the private equity structure have long been alleged. Finally a research study adds evidence to this issue. Read the entire White Paper on Addressing financial fraud in the private equity industry. ..."
"... Certain characteristics of the private equity industry may make it more susceptible to allegations of fraudulent activities, such as relatively long lockup periods, illiquid investments, complex transactions, broad partnership agreements, a perceived lack of transparency, inherent conflicts of interest and activist investors. ..."
"... The corporate press seems to be embracing a "distraction first/pooh pooh later" approach. So they can say "we covered it" and "it was no big deal" at the same time. Oh, look, what is that sparkly thing over there?! ..."
"... and just to imagine the future: PE will be in a good position, without scrutiny, to buy/invest in corporations that have won bids to go into cozy infrastructure PPPs with the government so just think of all the write-offs the LPs will get when all of those corporations downsize or go bankrupt after the government stops propping them up and after PE has taken all its up-front fees and in-house loans. ..."
Posted on
April 27, 2017 by Yves Smith This is priceless.
Naked Capitalism beat the Journal by nearly four years reporting a "new" story.
On top of that, the Journal isn't terribly exercised about conflicts of interest involving executives with clear legal duties
to investors engaged in what looks uncomfortably like self-dealing. This complacency stands in stark contrast to press hysteria about
Ivanka Trump selling schamattes out of the White House.
In 2010, a firm called Swift River Investments LLC put money into a software company developed by private-equity giant Blackstone
Group LP. Five years later, a company Blackstone co-owned acquired the software firm, at a price that gave Swift River a fat profit.
Blackstone's back-and-forth involving Swift River wouldn't be notable but for one thing: Swift River invests personal wealth
for Blackstone's president and chief operating officer, Hamilton "Tony" James. A brother of his runs it.
Wall Street billionaires, their fortunes built by investing other people's money, increasingly are putting some of their own
in sideline investment ventures, while continuing to operate their hedge funds or private-equity funds for clients
In the Blackstone/Swift River matter, Blackstone said its transactions involving Mr. James's family investment firm were cleared
by Blackstone's conflicts committee, and Mr. James wasn't involved in the decisions. He declined to be interviewed.
Today, we'll examine conflicts of interest involving principals at the private equity firms themselves. Here our object lesson
is private equity kingpin Blackstone Group.
Tony James is the chief operating officer of the Blackstone Group, overseeing the entire firm across its large range of asset
management and investment banking services. James also runs the Blackstone private equity investment business, meaning he sets
policy and is the final decision-maker on its day-to-day activities.
One would expect these dual roles at Blackstone to keep James busy and give him an adequate income. But he also has a side
business that he owns with his two brothers, called Swift River Investments, a "family private equity firm". In other words, James
is a substantial principal in a business that could theoretically compete with Blackstone. And, while it is unlikely that Swift
River has enough capital to bid against Blackstone for deals, it is nevertheless clear in one case that Swift River is deeply
involved with Blackstone. Moreover, in other cases, there is considerable potential for conflicts of interest between Swift River
and Blackstone and investors are powerless to police them.
These actual and potential conflicts are particularly troublesome from a corporate governance perspective, since as a corporate
officer of Blackstone, James has a duty of loyalty to Blackstone
Let's look at the situation where we know that James put himself into a conflict of interest.
Blackstone developed a software application internally called iLevel Solutions. Blackstone spun it out and, lo and behold,
it wound up in the hands of the James brothers through Swift River. Blackstone shareholders have every reason to be concerned
about possible self-dealing here. After all, why does it make any sense to sell a corporate asset to a top executive and his family
members? And how could the board ever be satisfied that the price of the transaction was fair?
But it's not just Blackstone shareholders who have reason to be troubled by an arrangement that looks an awful lot like self-dealing.
Blackstone's private equity fund investors – institutions like the NYC pension system – have reason to be concerned about Swift
River's investment activities.
Of the 10 investments Swift River lists having made, five of them are privately-held oil field services companies (and the
sixth is the iLevel related-party deal with Blackstone). So the James brothers like oil services companies. What's the big deal?
Well, it turns out that Blackstone has recently gotten into the energy investment business in a big way. In August 31, 2012
SEC filing, Blackstone disclosed that it had raised $2,074,621,000 for a new fund called "Blackstone Energy Partners L.P." A clear
focus of this fund is investment in energy exploration companies, as shown in a Blackstone press release issued shortly after
the fund's closing, where Blackstone announced an investment in an offshore drilling company. Now, you can see where this is going.
Tony James is buying oil exploration companies with his investors' money, and he happens to own a bunch of companies personally
that service exploration companies.
On the one hand, there is no evidence that James is using his Blackstone position to have the Blackstone Energy Partners companies
do business with the companies he owns. On the other hand, his iLevel deal with Blackstone shows that neither James nor Blackstone
appear to have any reluctance to engage in related party transactions. Moreover, independent of any oil services transactions
between Blackstone and Swift River, there are other ways that James and his family benefit from the shared interests and may cross
the line into "improper personal benefit". All of the information that James gets in his formal day job, such as contract, industry
intelligence, and deal flow, can also be used to help Swift River. In fact, it's hard to see how James could stop that from happening
even if he wanted to. How can he erect a Chinese wall in his brain?
What makes these dealings particularly troubling is that Blackstone's fund investors are absolutely powerless to even begin
to monitor any of these potential related party transactions or resource-sharing in order to ensure that they are not abusive.
In fact, private equity LP investors almost always sign up to fund terms (in the super-secret limited partnership agreements that
are the only state and local government contracts not subject to FOIA) where the investors agree to let the PE firm executives
compete against the funds they manage. This is undoubtedly the case with Blackstone's funds, which demonstrates just how dysfunctional
the entire ecosystem of private equity actually is. And remember, the dominant LP investors in private equity are your state and
local governments, the universities you attended that constantly hound you for donations, and the mutual insurance companies that
you theoretically own as policy holders.
We also discussed the software company at issue, iLevel Solutions. This was the focus of that post:
We will see that this company is built from the ground up as a vehicle to convince PE investors and the SEC that Blackstone
and other PE firms have implemented robust financial controls over the companies they own. The reality, however, is the opposite:
by design, iLevel gives PE firms unprecedented ability to cook the books of their portfolio companies while maintaining a
facade of compliance.
iLevel has also been ingenious in its implementation of the "Wall Street Rule" – the idea that bad practices are most untouchable
by regulators when they become industry standard. In that spirit, iLevel in late 2011 announced that the Carlyle Group had become
a part owner of the company. This is presumably in addition to the continuing partial ownership of the Blackstone COO. Nominally,
Carlyle and Blackstone are competitors, yet they teamed up on iLevel. Working together, they have been able to promote the product's
adoption among a large portion of large private equity firms, including Apollo, TPG, and Cerberus, and more than 30 other firms,
in addition to Blackstone and Carlyle.
And finally, in a coup de grace of seediness, around the same time as the Carlyle deal, iLevel brought in another
investor in the form of Hamilton Lane . This firm is the dominant "gatekeeper"
performing due diligence and making recommendations to pension funds and other institutional investors on private equity funds.
So, in its fiduciary role advising pension funds, Hamilton Lane sits in judgment of Blackstone and Carlyle. But on the side, Hamilton
Lane is also in a deal with the Blackstone COO and Carlyle. Though this appears to be a material conflict of interest,
it is worth noting that the conflict does not appear to be disclosed in the "Conflicts of Interest" section of Hamilton Lane's
Form
ADV filed with the SEC.
The Journal's new information is that a company Blackstone "co-owned," presumably but not necessarily a portfolio company bought
back ILevel from Swift River, in 2015, for $75 million. From the story:
Blackstone said in regulatory filings that it had talked to about 20 potential investors before selecting Swift River as one
of the primary 2010 buyers. It said negotiations were led by an outside investor not linked to the James family.
If you think this "outside investor" was operating independently, I have a bridge I'd like to sell you. Anyone with an operating
brain cell would understand which buyer was preferred and would know full well it was in their economic best interest to curry favor
with Tony James.
The other conflict of interest that was disclosed in regulatory filings involved oil-field services companies, which we flagged
in 2013 as problematic. Again from the Journal:
In the other potential conflict it cited in filings as linked to Swift River, a Blackstone business-development affiliate provided
financing to an oilfield-services company in which Swift River indirectly owned a stake. Blackstone filings said Mr. James didn't
work on the financing for the oilfield company, Allied-Horizontal Wireline Services LLC.
The Journal does discuss other of private equity fund principals having their own private equity businesses on the side. Apollo
founder Marc Rowan's real estate venture is supposedly kosher by virtue of him being involved only in strategy and "intended to have
different durations and risk-return profiles than those made by Apollo's funds." TPG Chairman Eric Bonderman has both his own side
investment firm, Wildcat Capital Management, and is also an investor in company started by a former TPG employee, Dragoneer. One
result of these incestuous relationships: "Mr. Bonderman invested in Spotify both through funds that TPG manages for clients and
through Dragoneer." Fortress has "handful of employees work solely on the personal financial matters of co-founders, who reimburse
Fortress." That almost certainly means they get lots of free intelligence. Query also whether full overheads, like office space and
the cost of admin support, are being allocated pro-rata to these staffers.
Despite Fortress' bromides about employees being forbidden to get into conflict of interest with clients along with supposed further
oversight of top people, the Journal discusses at length a "tangled situation" involving a donation pledge by a Fortress entity to
Milwaukee just the Milwaukee Bucks were seeing funding from the city to help fund a new arena. The wee ethical and optical problem?
Fortress Fortress co-founder and co-chairman Wesley Edens was also a co-owner of the Bucks.
Here are some additional shortcomings with this story:
Failure to discuss why these conflicts of interest are serious and troubling . The title of this story in the print edition is
anodyne: "Fund Kings Open 'Family Offices'". The message of the entire piece is: "These firms had to reveal they have these cozy
arrangements. But they all swear they have robust internal procedures, so this must be OK." Notice the failure to get a reading from
an independent expert or even to consult corporate governance standards, as we did in 2013:
From the American Bar Association (emphasis ours):
Generally, officers owe the same fiduciary duties as directors .Officers with greater knowledge and involvement may be subject
to higher standard of scrutiny and liability
Under state corporate law, directors of solvent corporations have two basic "fiduciary" duties, the duty of care and the
duty of loyalty. The duty of care, which is governed by statute in most states, usually requires that directors discharge their
duties in good faith and with the care that an ordinarily prudent person in a like position would exercise under similar circumstances
and in a manner the director reasonably believes to be in the best interests of the corporation. See, e.g., Or. Rev. Stat.
§ 60.357 (1). In some states, including Delaware, the standard of care, though essentially the same, is established by judicial
decision. See, e.g., Graham v. Allis-Chalmers Mfg. Co., 188 A.2d 125, 130 (Del. 1963). The duty of loyalty requires that directors
act on behalf of the corporation and its shareholders and refrain from self- dealing, usurpation of corporate opportunity
and any acts that would permit them to receive an improper personal benefit or injure their constituencies . See, e.g.,
Guth v. Loft, Inc., 5 A.2d 503, 510 (Del. 1939).
Failure to consider whether investor disclosure was inadequate . As we indicated in 2013, limited partnership agreements have
broad language waiving conflicts of interest which legitimates the mind-boggling notion of fund managers competing with their own
investors. However, the SEC, which now oversees private equity firms as investment managers thanks to Dodd Frank, has taken a dim
view of marketing materials that are misleading, irrespective of what the fine print in the contracts actually says. So it's not
inconceivable, given that some vintage 2006 and 2007 funds are still in business, that some fund managers may have made airy assurances
that are at odds with their current behavior.
And on a common-sense basis, any limited partner ought to be upset at the idea of a personal wealth management business of private
equity principals getting anywhere near their investments, given how private equity firms have been caught cheating investors in
just about every creative way imaginable.
Put it another way: if the general partners were even semi-serious about making sure everything looked kosher, they'd review these
insider deals with the limited partner advisory committees of the appropriate funds. As we've discussed, the limited partner advisory
committees are captured; the members are chosen so that the general partner has a large majority of friendly investors who would
never cross them. But the one thing the minority of non-captured advisory committee members can do is vote with their feet on the
next fundraising. But that is clearly more than the private equity kingpins are willing to hazard.
Failure to mention that some, perhaps most, of these disclosures came about thanks to Dodd Frank, which Trump is threatening to
kill . All private equity fund managers over a not-large size are required to file an annual disclosure form ADV with the SEC. Many
firms have revealed in these documents that they are engaged in practices that alert parties can ascertain are not permitted by their
contracts with investors. Yet even this weak protection is likely to be scotched if Trump and House Financial Services Committee
Chairman Jeb Hensarling get their way.
The Wall Street Journal exemplifies why limited partners are complacent in the face of private equity self-dealing and embezzlement.
The reporters dug up some troubling material, called up the private equity firms for comment, and took their reassurances at face
value. This is Potemkin journalism masquerading as the real deal. The rapid rise of a plutocracy means we need the Fourth Estate
to help curb its power. Unfortunately, for the most part, vigorous journalism has become a relic.
Fraud is the basis of the economic system in Western society in 21st Century. It is now so accepted that no prosecutions
take place except for those who publicise the fact.
We are well aware that most corporate bankruptcies result from Fraud and so did the Greenspan Bust after 2006 which followed
on from the Great Greenspan Orgy after 1999
Private Equity a Formula for Fraud. Abuses in the private equity structure have long been alleged. Finally a research study
adds evidence to this issue. Read the entire White Paper on Addressing financial fraud in the private equity industry.
"This paper addresses the more prevalent areas where private equity firms, brokers and other advisers may be subject to accusations
of manipulation or fraud. Certain characteristics of the private equity industry may make it more susceptible to allegations
of fraudulent activities, such as relatively long lockup periods, illiquid investments, complex transactions, broad partnership
agreements, a perceived lack of transparency, inherent conflicts of interest and activist investors. Investors are scrutinizing
the performance and activities of their portfolio managers, financial advisers, agents and the portfolio companies themselves.
Limited partners are increasingly more critical of disclosure materials supplied by general partners and are demanding more detailed
performance data.
Stakeholders must be prepared to respond to issues that may arise at both the fund management and portfolio company level.
Stakeholders must also provide careful oversight of their outside financial advisers, brokers and other agents."
For those with brave hearts and deep pockets, joining a private equity fund as a limited partner carries with it the ultimate
disclaimer, caveat emptor. The standard 2 and 20 Private Equity Fee Structure is being challenged. However, the gimmicks and tricks
used to siphon off the top costs to fund a crony insider get rich scheme is expected from the "Masters of the Universe".
Re "This complacency stands in stark contrast to press hysteria about Ivanka Trump selling schamattes out of the White House."
The corporate press seems to be embracing a "distraction first/pooh pooh later" approach. So they can say "we covered it"
and "it was no big deal" at the same time. Oh, look, what is that sparkly thing over there?!
and just to imagine the future: PE will be in a good position, without scrutiny, to buy/invest in corporations that have
won bids to go into cozy infrastructure PPPs with the government so just think of all the write-offs the LPs will get when all
of those corporations downsize or go bankrupt after the government stops propping them up and after PE has taken all its up-front
fees and in-house loans.
"... Whether Josh Kosman's outstanding book, The Buyout of America , or Eileen Appelbaum's marvelous work, the PE swineherds have been dismantling the American (and other countries') economy for quite a few years now ..."
"... The retail market, by and large, is hosed, especially if they've decided to get into bed with PE. Amazon might be filling out the areas left bare by the collapse, but Amazon itself has a major problem in the form of counterfeit inventory which is going to blow up in its face. ..."
"... If retail's currently fried, and you can't trust what you buy on Amazon, what's left? The correction is going to take a while, and will be deeply felt, I fear. ..."
"... Philip Augar, a former banker (Schroeders, NatWest etc.) and author (Reckless Capitalism, Decline Of Gentlemanly Capitalism etc.), dedicated one of his books to Leeds United, his childhood club, "one of the early victims of this madness". ..."
"... Yet another unintended (?) consequence of QE ∞. The ZIRP simultaneously made pension funds and endowments desperate for returns and enabled PE firms to raise large amounts of money at low rates. ..."
"... But on the bright side, QE saved us over the last 8 years from the horror of meaningful fiscal stimulus and infrastructure investment. So we should thank Drs. Bernanke and Yellen and their enablers for letting the market work its magic and protecting us from the dead hand of state intervention ..."
"... interest rates are low; making payments will be easy ..."
"... Most retail jobs are already part time and now 2017-18 looks to be the death of retail altogether. Which sector is absorbing these legions of workers? ..."
"... trade means affordable junk commensurate with stagnant or declining real wages. ..."
"... Just curious. First they killed off family farms; then mom and pop stores; then they wiped out mainstreet; now they are busy demolishing brick and mortar malls. What comes next? It looks like PE might be killing itself. ..."
"... In destroying malls they are also distroying a class of investor who wanted the income based on that capital. ..."
"... Parasites destroy hosts ..."
"... There are often clauses which allow Courts to revoke Limited Liability where Fraud is suspected. A few cases of Unlimited Liability would change business practices at Board level immensely ..."
"... The Western economic model has been built around Liquidation for decades and the ramping up of liabilities within shell businesses so looters can extract equity and cash. It is so transparent that only criminals do not notice ..."
That's a new angle for evaluating Amazon : it's not that retailers are closing because Amazon is expanding . Rather its seems
that Amazon is expanding Because retailers are closing. Bezos probably should thank PE firms for their destructive activities.
Exactly. The crappified shopping experience and lack of inventory came first. A miserable brick and mortar experience drove
shoppers into the welcoming arms of Amazon because they just wanted to buy stuff and retail made it hard.
I'm sure an old junk bond Wall Street dood like Bezos is already pals with 'em!
Great article, and should be enlightening for those not in the know.
Whether Josh Kosman's outstanding book, The Buyout of America , or Eileen Appelbaum's marvelous work, the PE swineherds
have been dismantling the American (and other countries') economy for quite a few years now , and the kings of debt, led
by Peter G. Peterson who spends his free time decrying debt (?!?!?!?), are the villains of our age!
The retail market, by and large, is hosed, especially if they've decided to get into bed with PE. Amazon might be filling
out the areas left bare by the collapse, but Amazon itself has a major problem in the form of counterfeit inventory which is going
to blow up in its face.
If you look at the comments on HN, more than a few
people mention how they got something that was sold (sometimes by Amazon) as legit, but turned out to be fake – this stems
from Amazon's practice of commingling inventory when you participate in their "fulfilled by" program. Considering their expansion
into grocery and other food-type items, a counterfeit scandal is one they can ill afford.
If retail's currently fried, and you can't trust what you buy on Amazon, what's left? The correction is going to take a
while, and will be deeply felt, I fear.
I do believe that alibaba.com and dealextreme.com has cornered that market opportunity already.
These days you can buy an insurance for your shipment so if your package is nailed by customs they will send another one until
one finally makes it. I buy components that way, one can buy hundreds-off components at the 2-5k price levels offered by f.ex.
digikey.com. Exotic stuff too.
The reason to still use Digikey & co are mainly for traceability, assured quality, genuineness and convenient re-ordering but
for personal use it doesn't matter so much.
You won't be surprised to hear about this scam operating in the UK. It has been the case for about thirty years and forms part
of the "financial engineering" that has replaced metal bashing in Blighty.
It's not just retail, but football (aka soccer) that has fallen victim. Many clubs were similarly divided between the operating
company / team and the ground. Some still are, e.g. Chelsea and Stamford Bridge.
Around the turn of the century, a former footballer (ex West Ham and Manchester City and one of the mobile chicanes negotiated
by Diego Maradona for his second goal against England at the World Cup in 1986) who had made a small fortune at the Lloyd's insurance
market, approached my employer, HSBC, for a loan, if not a partnership, to take over Aston Villa, which operates from a big site
in Birmingham (Villa Park). His plan was to split the football club from the ground / stadium and get the club to pay the landlord
rent, develop the ground for residential and retail purposes, and get the club to share a stadium with another Birmingham / Midlands
region club, e.g. Birmingham City, Wolverhampton Wanderers (Wolves) or Port Vale.
HSBC wisely declined. It was still just about a boring trade bank then, but was embarking on a spree under John Bond.
Not long after, Barclays (a future employer at the time) became adviser to Leeds United. I don't know if Leeds split between
club and ground (Elland Road), but the club began leasing, not buying players, and securitising the income stream. After some
success, including an appearance in Europe's top competition, Leeds fell apart and is languishing in the lower divisions (minor
leagues).
Philip Augar, a former banker (Schroeders, NatWest etc.) and author (Reckless Capitalism, Decline Of Gentlemanly Capitalism
etc.), dedicated one of his books to Leeds United, his childhood club, "one of the early victims of this madness".
The footballer I mentioned above is still active in the City, not so much at Lloyd's (opposite one of my two offices), but
with financial engineering in sport. He was widely quoted in the FT a few weeks ago.
With regard to retail, the scam played a part in the collapse of a retail chain, British Home Stores. The former chairman and
main shareholder, "Sir" Philip Green, split the retail operations from the stores. He / his Monaco company owns many of the (former)
sites, including what was BHS HQ in Marylebone (just down the road from Baker Street station and Mme Tussaud).
I forgot to add that said player was still hawking the same "financial solutions" (snake oil) in the FT. The paper did not
mention how the solutions had worked out. The thing is, in many cases, the solutions seem / are designed to fail, after some roaring
success, and (or so) the insiders can profit from the wreckage ("disaster capitalism") as they are often creditors (e.g. the knight
of the realm above) and can salvage what they consider to be the valuable bits.
Just one more thing to add, sorry, is that many UK retailers are under similar pressure. One hears in the City that one or
two household names are nearing collapse.
One well known US Main Street store merged with a well known and similar UK High Street store a couple or so years ago. They
are run / owned from Switzerland, I think, by an Italian, whose PE firm, again based off shore, is one of the biggest shareholders
in the group. The Italian billionaire ran the UK firm before the merger. They are rumoured to be one, if not the, next domino.
Yet another unintended (?) consequence of QE ∞. The ZIRP simultaneously made pension funds and endowments desperate for
returns and enabled PE firms to raise large amounts of money at low rates.
But on the bright side, QE saved us over the last 8 years from the horror of meaningful fiscal stimulus and infrastructure
investment. So we should thank Drs. Bernanke and Yellen and their enablers for letting the market work its magic and protecting
us from the dead hand of state intervention .
ZIRP also made it easier to load all of these retailers up with excess debt. Management could borrow more money than necessary,
pay themselves lavish bonuses with the excess, and claim that " interest rates are low; making payments will be easy
". They could even show you the math.
Of course, that math assumed that sales would steadily climb into the future. If sales fell even slightly, the payments became
an oversized burden. And paying off the enormous loan principal was beyond all hope.
Companies with little debt can generally survive a reduction in sales. They can engage in cost-cutting exercises, maybe encourage
some employees to retire earlier, etc. It's even easier if they own their own property and don't have to renegotiate a lease.
But when you've got a lot of debt and servicing that debt requires that sales continue to rise quarter after quarter after quarter
without fail, then things get a LOT more fragile. The effects of even a single bad quarter get greatly amplified. ["Leverage"
can work both ways.] And steadily-declining sales are the kiss of death.
Oh, yes. Ultra-low interest rates "helped" retailers a lot. Helped set them up for failure, that is.
I dunno but seems like every time I turn around I discover someone else I know who's driving for Uber and/or Lyft. All age
groups. All struggling to survive.
The demise of retail is especially chilling as it used to be a sort of fall-back job. Not no more.
Where's all the zillions of jawbs Trump is going to magically provide??
I see that Trump today is claiming he's created 500,000 new jobs in his first 100 days, but he doesn't say what these jobs
are or where these jobs are – obviously they aren't in my state
I know some firm bought Friendlys the ice cream/restaurant took the ice cream in a box business and split it off then left
the restaurant part to die. It was American businesses best friend Sun Capital.
Interestingly, it seems to me, that the off shoring of clothing manufacturing to China, and the subsequent fall in inventory
cost to retailers and the incredible margins they operate on hasn't done anyone any good in the end.
I have found retail shopping over the last ten years to be a poor now bordering on depressing experience. Poor selection, sparse
stores, uncompetitive prices,staff either untrained or trained only to nag about loyalty cards, and the quality of items has nosedived
across the board. Even the "luxury" items are cheap and poorly made. The only consistent exception to this trend is toy stores.
I guess kids are tougher customers.
I hate shopping online. I hate the uncertainty. I hate the delay. I hate the decision fatigue. But what choice do I even have
anymore? It costs me more petrol to go shopping than they charge for delivery.
Thanks, FedUpPleb - I keep telling this to the stooges who keep prattling on about the low cost of items - which are far too
expensive, last only several washings (delicate cycle only, of course) or several months and are of the poorest quality, completely
different from my youth!
Given the post and the comments, it actually sounds like the future for retailers that survive doesn't seem so bleak, IF (big
if):
1. They manage to avoid private equity takeover
2. Don't take on debt
3. Make customer service a priority
4. Sell quality goods a step above the usual Chinese garbage found everywhere else (or at least that can't be shipped as easily)
4. Keep their stores updated and pleasant to visit
What with all of the closures, there might be opportunities for the retailers that survive if they avoid the mistakes of their
fallen competitors. But are there any examples of companies out there that are doing these things? Nordstrom? Costco? Anybody?
Before them, there were mom-and-pop retailers. They had bleak-future-moment a long, long time ago.
Perhaps they will come back one day, when people make enough money to value service again, instead of supporting 'trade' as
a WSJ poll shows, because trade means affordable junk commensurate with stagnant or declining real wages.
You can blame the present situation that Neiman Marcus is dealing with on it managers, especially Ms. Katz, who were paid a
lot of money in the sell out to PE. These people have destroyed an old Dallas brand with their greed and mismanagement. A brand
that has a history of innovation and customer service driven by Stanley Marcus. A real loss for Dallas and for retail history,
I stopped buying clothes at brick and mortar stores starting around a decade ago because of crapification. If you need tall
sizes for shirts, you used to be able to get these at most every department store, but over the last decade or two almost every
department store around these parts was sold and restructured; after these changes the stores always have less inventory for higher
prices. Now the only place you can find a wide selection of tall sizes is the internet.
Retail clothiers have essentially said we're not interested in selling things to tall men. And they're not interested in selling
things to large men, or large women, or short people, or old people.
How badly should I feel about the disappearance of an industry that decided they had no interest in me whatsoever?
Just curious. First they killed off family farms; then mom and pop stores; then they wiped out mainstreet; now they are
busy demolishing brick and mortar malls. What comes next? It looks like PE might be killing itself.
Is the big leveraged buyout wave of 2005-2007 about to claim another victim?
Bonds issued by Guitar Center, the biggest retailer of musical instruments in the world, are languishing at record lows
on growing concern that the company is going to be overwhelmed by its roughly $1 billion of outstanding bond debt, part of
a debt burden that totals about $1.6 billion, once loans and other borrowings are included.
in 2007, the company was taken private by Mitt Romney's former private-equity firm Bain Capital in an LBO valued at $2.1
billion that left it saddled with $1.6 billion of high-yield debt. Coming just ahead of the 2008 financial crisis, the company
struggled with its high interest payments for several years.
In 2014, its main creditor, private-equity firm Ares Management LLC, took a controlling stake in the company in a deal in
which it converted some of its debt into equity, and left Bain as a partial owner with representation on the board.
As Mitt would say, why don't they get a loan from their parents?
I used to enjoy Garland's writing about Guitar Center. Too bad he embarrassed himself and became the epitome of the deluded
Clintonite liberal with his "Time for some game theory" tweetstorm.
Ares had a deal down in West Texas with Clayton Williams Energy Inc. (You remember Clayton – he ran for Governor of Texas against
Ann Richards) Unfortunately Clayton decided not to hedge his production for 2015-6, just before the Saudis pulled the plug on
the oil price in November 2014.
All of a sudden CWEI, whose share price had been bouncing around above $100, was two jumps ahead of the sheriff with bankruptcy
a real threat. The stock got down to 7.
Beginning last March Ares put in a bunch of equity and debt, and it turned out Clayton had squirreled away a ton of acres in
the best part of the Permian Basin. With BK off the table the stock price recovered, Noble Energy bought them out for $130+ per
share, and Ares made about six times their money in less than a year.
What's interesting for present purposes is there was no asset-stripping or any other shenanigans. Ares took a risk – which
looked huge at the time – and made out like bandits. That's how it's supposed to work. And the funny thing is, Ares is owned by
a bunch of Arabs out in the Middle East.
Great piece by Richter and Yves – and a lot of smart commentary from out here in the bleachers. Thanks to all.
There are often clauses which allow Courts to revoke Limited Liability where Fraud is suspected. A few cases of Unlimited
Liability would change business practices at Board level immensely
I buy about 50% my stuff on line and stores that have figured out to make themselves web friendly are best buy, home depot,
osh, and then some manufacture like Haynes underwear have friendly sites. These 3 box stores site went from impossible to use
to very friendly to use and shipping is normally free over small amount.
I had to buy a new blue tooth the other day and amazon wanted $170.00 I then went to the company site and it's very much improved
bought recondition one for $39.00 free shipping. The new one there was $69.00 they have a third party sell through their site.
Very interesting. Could Amazon suffer the fate that people go there to browse what's available but then buy online direct from
the maker's site ? As you remarked many of the manufacturers' sites have vastly improved as well as their access to fast shipping
channels.
This is already a known defense against the proliferation of counterfeit goods on generic online sites like Amazon that really
don't give a f**k about the fakes problem as long as they get their cut of the price.
I am a sales rep who sells retailers, both big and small. My accounts are struggling to stay even. No one mentions Amazon as
competition, but it is a huge factor.
My three reasons why retail is in decline:
1. Amazon
2. Anyone younger than 35 just doesn't buy or even want to accumulate stuff. They just want wifi and to play with their phones.
I wanted everything when I was young and for the most part, still do.
private equity fund managers do have an incentive not to burn private equity limited partners,
So they flip it at an inflated value to another PE buyer to keep portfolio performances looking good and churn regularly until
a secondary-fund picks it up to forward to a Liquidation Front Company. It is exactly what Philip Green did at BHS having stripped
a £1 billion dividend courtesy of HBOS corruption.
This game was well exposed under Robert Campeau decades ago. It is amazing how the old shell games continue. Same story at
Karstadt in Germany with Thomas Middlehof and the Arcandor disaster.
The Western economic model has been built around Liquidation for decades and the ramping up of liabilities within shell
businesses so looters can extract equity and cash. It is so transparent that only criminals do not notice
How Private Equity Firms are Designed to Earn Big While Risking Little of Their Own
By Eileen Appelbaum and Rosemary Batt
Private equity firms are financial actors that sponsor investment funds that raise billions of dollars each year. The funds
typically buy out high-performing companies using high amounts of debt and plan to resell them in a five-year window – promising
investors outsized returns in the process. They propose to do this through a combination of operational improvements and financial
engineering techniques that extract resources from companies, often leaving them financially vulnerable.
This business model, known as a 'leveraged buyout', was widely used and then discredited in the 1980s; but it returned under
the guise of 'private equity' and has grown dramatically in the last fifteen years – both in the US and in Europe. Between 2000
and 2012, private equity firms invested $3.4 trillion in some 18,300 buyouts of U.S. companies. And while PE investments fell
sharply in the great recession, they largely recovered thereafter.
More than other types of financial intermediaries, private equity (PE) takes an active role in managing the companies it buys.
Before a company is purchased, the fund's general partner (who makes all decisions for the PE fund) develops a plan for how much
debt to use, how the company's cash flow will be used to service the debt, and how the PE firm will exit the company at a profit.
The limited partners in the fund put up 98 per cent of the fund's equity while the PE firm and its general partners put up 2 per
cent or less. Pension funds account for 35 per cent of all investments in PE funds - creating a moral dilemma for workers whose
retirement savings may be putting other companies and workers at risk.
In our book, we illustrate the many ways that private equity firms make money and the effect they have on the lives of working
people. Sometimes private equity does perform as advertised – using reasonable amounts of debt and providing access to management
expertise and financial resources. This usually involves small companies - with few assets that can be mortgaged, but many opportunities
for operational improvements. Most PE investments, however, are in larger companies that already have modern management systems
in place and also have substantial assets that can be mortgaged. Here, private equity firms use debt and financial engineering
strategies to extract resources from healthy companies.
How do private equity firms make money?
Leverage is at the core of the private equity business model. Debt multiplies returns on investment and the interest on the
debt can be deducted from taxes. PE partners typically finance the buyout of a company with 30 per cent equity and 70 per cent
debt. Private equity funds use the assets of the acquired company as collateral and put the burden of repayment on the company
itself. The PE firm has very little of its own money at risk – PE partners invest 1 to 2 per cent of the purchase price of acquired
companies (2 per cent of 30 per cent is .02*.3 = .006 or 0.6 per cent). Yet they claim 20 per cent of any gains from the subsequent
sale of these companies.
PE firms play with other people's money – from investors in its funds to creditors who provide loans. Leverage magnifies investment
returns in good times – and PE firms collect a disproportionate share of these gains. But if the debt cannot be repaid, the company,
its workers, and its creditors bear the costs. The PE business model is a low risk, high reward strategy for PE firm partners.
Post buyout, PE firms often engage in financial engineering that further compromises portfolio companies.
They may have portfolio companies take out loans at junk bond rates and use the proceeds to pay themselves and their investors
a dividend.
They may split a real estate-rich company into an operating company and a property company, then sell off the real estate and
repay investors while the operating company must lease back the property and pay (often inflated) rent.
They may require portfolio companies to pay monitoring fees to the PE firm for unspecified services. Payment of the fees reduces
the companies' liquidity cushion and puts them at risk.
What happens to portfolio companies and workers?
The results of financial engineering are predictable. When the economy falters, the high debt levels of these companies – especially
in cyclical industries – make them prone to default and bankruptcy. One economic study found that during the last recession roughly
a quarter of highly leveraged companies defaulted on their debts. The financial crisis officially ended in 2009, but bankruptcies
among PE-owned companies continued through 2015. Energy Future Holdings, for example, was acquired in 2007 by a PE consortium
and defaulted in 2014 with $35.8 billion in debt. Las Vegas based Caesar's Entertainment was acquired by PE in 2006, but by mid-2007
its long-term debt had more than doubled. It declared bankruptcy in 2015, putting over 30,000 union workers at risk.
These examples of job loss are backed by rigorous econometric studies. One study found that through 2005, PE-owned establishments
had significantly lower employment and wages post buyout than did comparable publicly-traded companies - despite the fact that
the PE-owned establishments had higher levels of wages and employment growth than their counterparts in the buyout year. Employment
in PE-owned companies was 3.0 to 6.7 per cent lower in the first 2 years after buyout, and 6 per cent lower after 5 years.
What Happens to Limited Partner Investors? ...
Eileen Appelbaum is Visiting Professor at the University of Leicester, UK. Prior to this she was Professor in the School of Management
and Labor Relations at Rutgers University and Professor of Economics at Temple University. Rosemary Batt is the Alice Hanson Cook
Professor of Women and Work at the ILR School, Cornell University.
When Gawker first published the Bain Capital tax return data I remember reading somewhere that one should not bother even looking
at them because they are not relevant and won't tell you anything.
That struck me as odd at the time. How could someone just dismiss information like this as not even worth reading? Move on, don't
look at them?
Well, apparently that is not the case. They seem to contain some nuggets of information suggesting that Romney was being
particular aggressive (euphemism for engaging in extra-legal activity) in misstating not trivial income for the purpose of avoiding
taxes.
One can only wonder what those undisclosed personal returns might contain.
I don't want to pick on Mitt in particular, although he is starting to look like a setup to make the other guy look good.
And what he had done with his income from Bain is certainly open to interpretation as the author admits.
But rather, this speaks to the 'rule of law' issue and how there is a duality in the US, and some animals are more equal than
others. And strangely enough, the barnyard hoots its approval.
"Private equity fund managers are compensated in two primary ways: management fees and carried interest. The management fee, traditionally
two percent annually, is paid to the managers to cover overhead, salaries, and so forth. The carried interest, traditionally twenty
percent, is a share of the profits from the underlying investments. My paper Two and Twenty described the typical arrangement.
Management fees are taxed at ordinary income rates; carried interest is often taxed at capital gains rates (around 15 percent
- Jesse). I focused in the article on why the carried interest portion is better viewed like bonus compensation and should be
taxed at ordinary income rates.
Current law on carried interest is already a sweetheart tax deal for private equity, but why not make it better? Private equity
folks are not the type to walk past a twenty-dollar bill lying on the sidewalk.
In the 2000s it became common for private equity fund managers to "convert" their management fees into carried interest. There
are many variations on the theme, but here's how many deals worked: each year, before the annual management fee comes due, the
fund manager waives the management fee in exchange for a priority allocation of future profits. There is minimal economic risk
involved; as long as the fund, at some point, has a profitable quarter, the managers get paid. (If the managers don't foresee
any future profits, they won't waive the fees, and they will take cash instead.)
In exchange for a minimal amount of economic risk, the tax benefit is enormous: the compensation is transformed from ordinary
income (taxed at 35%) into capital gain (taxed at 15%). Because the management fees for a large private equity fund can be ten
or twenty million per year, the tax dodge can literally save millions in taxes every year.
The problem is that it is not legal. Because the deals vary in their aggressiveness, there is some disagreement among practitioners
about when it works and when it doesn't. But in my opinion, and the opinion of many tax practitioners, the practices that were
common in the private equity industry in the 2000s became very, very questionable, and it's unlikely that they would have stood
up in court.
Gawker today posted some Bain documents today showing that Bain, like many other PE firms, had engaged in this practice of
converting management fees into capital gain. Unlike carried interest, which is unseemly but perfectly legal, Bain's management
fee conversions are not legal. If challenged in court, Bain would lose. The Bain partners, in my opinion, misreported their income
if they reported these converted fees as capital gain instead of ordinary income."
Victor Fleischer, Romney's Management Fee Conversions
At this point, the people who run America's private-equity funds must be ruing the day Mitt Romney decided to run for President.
His fellow Republican candidates, of all people, have painted a vivid picture of private-equity firms-including Bain Capital, where
he worked for fifteen years-as job-destroying vultures, who scavenge the meat from American companies and leave their carcasses by
the side of the road. Not since the days of "Wall Street" and "Barbarians at the Gate" have the masters of leveraged buyouts looked
quite so bad.
Given the weak job market, it makes sense that the attacks have focussed on layoffs. But the real problem with leveraged-buyout
firms isn't their impact on jobs, which studies suggest isn't that substantial one way or the other. A 2008 study of companies bought
by private-equity firms found that their job growth was only about one per cent slower than at similar, public companies; there was
more job destruction but also more job creation. And, while private-equity firms are not great employers in terms of wage growth,
there's not much evidence that they're significantly worse than the rest of corporate America, which has been treating workers more
stingily for about three decades.
The real reason that we should be concerned about private equity's expanding power lies in the way these firms have become
increasingly adept at using financial gimmicks to line their pockets, deriving enormous wealth not from management or investing skills
but, rather, from the way the U.S. tax system works. Indeed, for an industry that's often held up as an exemplar of free-market
capitalism, private equity is surprisingly dependent on government subsidies for its profits. Financial engineering has always been
central to leveraged buyouts. In a typical deal, a private-equity firm buys a company, using some of its own money and some borrowed
money. It then tries to improve the performance of the acquired company, with an eye toward cashing out by selling it or taking it
public. The key to this strategy is debt: the model encourages firms to borrow as much as possible, since, just as with a mortgage,
the less money you put down, the bigger your potential return on investment. The rewards can be extraordinary: when Romney
was at Bain, it supposedly earned eighty-eight per cent a year for its investors. But piles of debt also increase the risk that companies
will go bust.
This approach has one obvious virtue: if a private-equity firm wants to make money, it has to improve the value of the companies
it buys. Sometimes the improvement may be more cosmetic than real, but historically private-equity firms have in principle had a
powerful incentive to make companies perform better. In the past decade, though, that calculus changed. Having already piled companies
high with debt in order to buy them, many private-equity funds had their companies borrow even more, and then used that money to
pay themselves huge "special dividends." This allowed them to recoup their initial investment while keeping the same ownership stake.
Before 2000, big special dividends were not that common. But between 2003 and 2007 private-equity funds took more than seventy
billion dollars out of their companies. These dividends created no economic value-they just redistributed money from the company
to the private-equity investors.
As a result, private-equity firms are increasingly able to profit even if the companies they run go under-an outcome made much
likelier by all the extra borrowing-and many companies have been getting picked clean. In 2004, for instance, Wasserstein & Company
bought the thriving mail-order fruit retailer Harry and David. The following year, Wasserstein and other investors took out more
than a hundred million in dividends, paid for with borrowed money-covering their original investment plus a twenty-three per cent
profit-and charged Harry and David millions in "management fees." Last year, Harry and David defaulted on its debt and dumped its
pension obligations. In other words, Wasserstein failed to improve the company's performance, failed to meet its obligations to creditors,
screwed its workers, and still made a profit. That's not exactly how capitalism is supposed to work.
The people who ran Harry and David into the ground have a defense: economic conditions changed in unforeseeable ways. But that's
precisely why loading firms with debt in order to reap short-term benefits is bad. It leaves companies unable to weather tough times,
and allows private-equity firms to make money even if things go wrong.
As if this weren't galling enough, taxpayers are left on the hook. Interest payments on all that debt are tax-deductible; when
pensions are dumped, a federal agency called the Pension Benefit Guaranty Corporation picks up the tab; and the money that the dealmakers
earn is taxed at a much lower rate than normal income would be, thanks to the so-called "carried interest" loophole. The money that
Mitt Romney made when he was at Bain Capital was compensation for his (apparently excellent) work, but, instead of being taxed as
income, it was taxed as a capital gain. It's a very cozy arrangement.
If private-equity firms are as good at remaking companies as they claim, they don't need tax loopholes to make money. If we capped
the deductibility of corporate debt, and closed the carried-interest loophole, it would not prevent private-equity firms from buying
companies or improving corporate performance. But it would reduce the incentives for financial gimmickry and save taxpayers billions
every year. Private-equity firms are excellent at gaming the rules. Time to change them.
During the entire decade of the 1980's, the policies of the Reagan Bush and Bush administrations encouraged one of the greatest
paroxysms of speculation and usury that the world has ever seen. Starting especially in the summer of 1982, a malignant and cancerous
mass of speculative paper spread through all the vital organs of the banking, credit, and financial system. Capital had long since
ceased to be used for the creation of new productive plant and equipment, and new productive manufacturing jobs; investment in transportation,
power systems, education, health services and other infrastructure declined well below thje break even level. Wall Street investors
came more and more to resemble vampires who ranged over a ghouilish landscape in search of living prey whose blood they could suck
to perpetuate their own lively form of death.
Industrial employment was out, the service sector was in. The post-industrial society meant that the production of tangible,
physical wealth, of hard commodities, within US borders was being terminated. The future would belong to parasitical legions
of lawyers, financial services experts, accountants, and clerical support personnel, but the growth in the balance of payments deficit
signalled that the game could not go on forever.
On the surface, wild speculation was the order of the day: there was the stock market boom, which underwent a crash in 1987, but
then, thanks to James Brady's drugged futures and index options markets, kept rising until the Dow had passed 3,000, although by
that time no one could remember why it was still called the industrial average. The stock market provided the right atmosphere for
a much broader speculative boom, the one in commercial and residential real estate, which kept going until almost the end of the
decade, but which then began to crash with a vengeance. When real estate began to implode, as in Texas at the middle of the 1980's
or the northeast after 1988, savings banks and commercial banks by the scores became insolvent. Thus, by the third year of the Bush
administration, a bankrupt savings and loan was being seized by federal regulators on almost every business day, and Congressman
Dingell of Michigan had to announce that Citibank, still the largest bank in the USA, was indeed "technically" bankrupt. Depositors
in Hong Kong started a run on the Citibank branch there; their US counterparts were slower to react, perhaps because deluded by the
pathetic faith that the Federal Deposit Insurance Corporation could still cover their deposits.
Even more fundamental than speculation was the absolute primacy of debt. During the Reagan and Bush years, unprecedented
federal deficits pushed the public debt of the United States into the ionosphere, with the total almost quadrupling over a little
more than ten years to approach the fantastic total of $3.25 thousand billion. In 1989, it was estimated that total debt claims in
the US economy had attained almost $25 thousand billion, and their total has increased exponentially ever since. The debt of
state and local governments, corporate debt, consumer debt –all expanded into the wild blue yonder. In the meantime, the
Great Lakes industrial region became the rust bowl, the Sun belt oil and computer booms collapsed, the great cities of the east were
rotten to the core with slums, and farmers went bankrupt more rapidly than at any other time in the memory of man.
Living standards had been in a gradual but constant decline since the days of Nixon, and it began to dawn on more
and more families who considered themselves members of the middle class that they could no longer afford their own home, nor hope
to send their children to college, all because of the prohibitive costs. The Bureau of the Census made sure in 1990 not to count
the number of those who had become homeless during the 1980's, since the real figure would be an acute political embarrassment to
George Bush: were there 5 million, or 6, as many as the total population of Sweden, or of Belgium?
New jobs were created, but most of them were dead-ends for losers at or below the mimimum wage that presupposed illiteracy on
the part of the applicant: hamburger sales and pizza home delivery were the growth areas, although a smart kid might still aspire
to become a croupier. Behind it all lurked the pervasive narcotics trade, with hundreds of billions of dollars a year in heroin,
crack, marijuana.
For the vast majority of the US population (to say nothing of the brutal immiseration in the developing countries) it was an epoch
of austerity, sacrifice, and decline, of the entropy of a society in which most people have no purpose and feel themselves becoming
redundant, both on the job market and ontologically.
But for a paper thin stratum of plutocrats and parasites, the 1980's were a time of unlimited opportunity. These were the practioners
of the monstrous financial swindles that marked the decade, the protagonists of the hostile takeovers, mergers and acquisitions,
leveraged buy-outs, greenmail and stock plays that occupied the admiration of Wall Street. These were corporate raiders like J. Hugh
Liedkte, Blaine Kerr, T. Boone Pickens, and Frank Lorenzo, Wall Street financiers like Henry Kravis and Nicholas Brady.
... ... ...
Henry Kravis's epic achievements in speculation and usury perhaps had something to do with the fact that he was a close family
friend of George Bush.
As we have seen, when Prescott Bush was arranging a job for young George Herbert Walker Bush in 1948, he contacted Ray Kravis
of Tulsa, Oklahoma, whose business included helping Brown Brothers, Harriman to evaluate the oil reserves of companies. Ray Kravis
had quickly offered George a job, but George declined it, preferring to go to work for Dresser Industries, a much larger company.
That was how George had ended up in Odessa and Midland, in the Permian basin of Texas. Ray Kravis over the years had kept in close
touch with Senator Prescott Bush and George Bush, and young Henry Kravis had been introduced to George and had hob-nobbed with him
at various Republican Party and other fund-raising events. Henry Kravis by the early 1980's was a member of the Republican Party's
elite Inner Circle.
Bush and Henry Kravis became even more closely associated during the time that Bush, ever mindful of campaign financing, was preparing
his bid for the presidency. Among political contributors, Henry Kravis was a very high roller. In 1987-88, Kravis gave over $80,000
to various senators, congressmen, Republican Political Action Committees, and the Republican National Committee. During 1988, Kravis
gave $100,000 to the GOP Team 100, which meant a "soft money" contribution to the Bush campaign. Kravis's partner George Roberts
also anted up $100,000 for the Republican Team 100. In 1989, the first year in which it was owned by KKR, RJR Nabisco also gave $100,000
to Team 100. During that year, Kravis and Roberts gave $25,000 each to the GOP.
During the 1988 primary season, Kravis was the co-chair of a lavish Bush fundraiser at the Vista Hotel in lower Manhattan at which
Henry's fellow Wall Street dealmakers and financier fatcats coughed up a total of $550,000 for Bush. Part of Kravis's symbolic recompense
was to be honored with the prestigious title of co-chairman of Bush's Inaugural Dinner in January, 1989. One year later, in January
1990, Kravis was the National Chairman of Bush's Inaugural Anniversary Dinner. This was a glittering gala held at the Kennedy Center
in Washington for a thousand members of the Republican Eagles, most of whom qualify by giving the GOP $15,000 or more. The entertainment
was organized as an "oldies night," with Chubby Checker, Tony Bennett, and B.B. King. When George Bush addressed the Eagles, he was
prodigal in his praise for Henry Kravis as one of "those who did the heavy lifting on this." [fn 5 ]
According to Jonathan Bush, George Bush's brother and the finance chiarman of the New York State Republican Party, Henry Kravis
was "very helpful to President Bush in fundraisers." According to brother Jonathan, Kravis "admired the President. And also, significantly,
on a personal level, his father, Ray, and [George Bush] were friends from way back. And that meant a lot to Henry. He wanted to be
part of that."
Henry Kravis had married the former Janey Smith of Kirksville, Missouri, who now called herself Carolyne Roehm. Carolyne Roehm
had been introduced into New York Nouvelle Society by Oscar de la Renta. She and Henry Kravis cultivated a frenetically sybaritic
lifestyle in the company of a social circle that included Bush's patron Henry Kissinger, American Express Chairman Jim Robinson and
his wife Linda, Donald and Ivana Trump, Anne Bass, corporate raider Saul Steinberg, cosmetics magnate Ronald Lauder, and Bush's finance
operative Robert Mosbacher and his wife Georgette. It was very much a Bushman crowd. Kravis and his "trophy wife" lived in a Park
Avenue apartment large enough to be a Hollywood sound stage, and also had a 270 acre estate in Weatherstone, Connecticut. The palatial
house there, which is listed in the National Historic Register, has nine fireplaces. Henry and Carolyne added a $7 million, six-building,
42,000 square foot "farm complex" for their seven horses. This was Henry Kravis, chief stoker of the bonfire of the vanities, celebrated
by Vice President Dan Quayle as the New York Republican Party Man of the Year.
It was to such an apostle of usury that George Bush turned for advice on public policy in economics and finance. According to
Kravis, Bush "writes me handwritten notes all the time and he calls me and stuff, and we talk." The talk concerned what the US government
should do in areas of immediate interest to Kravis: "We talked on corporate debt–this was going back a few years–and what that meant
to the private sector," said Kravis.
Henry Kravis certainly knows all about debt. The 1980's witnessed the triumph of debt over equity, with a tenfold increase in
total corporate debt during the decade, while production, productive capacity, and unemployment stagnated and declined. One of the
principal ways in which this debt was loaded onto a shrinking productive base was through the technique of the hostile, junk-bond
assisted leveraaged buyout, of which Henry Kravis and his firm were the leading practitioners.
The economist Franco Modigliani had written in the 1950's about the theoretical debt limits of corporations. Small scale leveraged
buyouts were pioneered by Kohlberg during the late 1970's. In its final form, the technique looked something like this: Corporate
raiders looked around for companies that would be worth more than their current stock price if they were broken up and sold off.
Using money borrowed from a number of sources, the raider would make a tender offer (once again, a la Jimmy Gammell in the Liedkte
United Gas buyout) or otherwise secure a majority of the shares. Often all outstanding shares in the company would be bought up,
taking the company private, with ownership residing in a small group of financiers. The company would end up saddled with an immense
amount of new debt, often in the form of high-yield, high-risk sunbordinated debt certificates called junk bonds. The risk on these
was high since, if the company were to go bankrupt and be auctioned off, the holders of the junk bonds would be the last to get any
compensation.
Often, the first move of the raider after seizing control of the company and forcing out its existing management would be to sell
off the parts of the firm that produced the least cash-flow, since enhanced cash flow was imperative to start paying the new debt.
Proceeds from these sales could also be used to pay down some of the initial debt, but this process inevitably meant jobs destroyed
and production diminished.
These raiding operations were justified by a fascistoid-populist demagogy that accused the existing management of incompetence,
indolence and greed. The LBO pirates professed to have the interests of the shareholders at heart, and made much of the fact that
their operations increased the value of the stock and, in the case of tender offers, gave the stockholders a better price than they
would have gotten otherwise. The litany of the corporate raider was built around his committment to "maximize shareholder value;"
workers, bondholders, the public, and management were all expendable. Ivan Boesky and others further embroidered this with a direct
apology for greed as a motor force of progress in human affairs.
An important enticement to transform stocks and equity into bonded and other debt was provided by the insanity of the US tax code,
which taxed profits distributed to shareholders, but not the debt paid on junk bonds. The ascendancy of the leveraged buyout therefore
proceeded pari passu with the demolition of the US corporate tax base, contributing in no small way to the growth of federal deficits.
Plutocrats are always adept in finding loopholes to avoid paying their taxes. Ultimately, the big profits were expected when the
companies acquired, after having been downsized to "lean and mean" dimensions, had their stock sold back to the public. KKR reserved
itself 20% of the profits on these final transactions. In the meantime Kravis and his associates collected investment banking fees,
retainer fees, directors' fees, management fees, monitoring fees, and a plethora of other charges for their services.
The leverage was accomplished by the smaller amount of equity left outstanding in comparison with the vastly increased debt. This
meant that if, after deducting the debt service, profits went up, the return to the investors could become very high. Naturally,
if losses began to appear, reverse leverage would come into play, producing astronomical amounts of red ink. Most fundamental was
that companies were being loaded with debt during the years of what the Reagan-Bush regime insisted on calling a boom. It was evident
to any sober observer that in case of a recession or a new depression, many of the companies that had succumbed to leveraged buyouts
and related forces of usury would very rapidly become insolvent. The Reagan-Bush regime was forced to argue that supply-side economics
and Bush's deregulation had abrogated the business cycle, and that there never would be any more recessions. This is why the "recession"
(in reality the exacerbation of the pre-existing depression) that George Bush was forced to acknowledge during late 1990 was so ominous
in its implications. The leveraged buyouts of the 1980's were now doomed to collapse. The handwriting on the wall was clear by September-October
of 1989, the first year of George Bush's presidency, when the $250 billion market for junk bonds collapsed just in advance of the
mini-crash of the New York Stock Exchange.
All in all, during the years between 1982 and 1988, more than 10,000 merger and acquisition deals were completed within the borders
of the USA, for a total capitlization of $1 trillion. There were in addition 3500 international mergers and acquisitions for another
$500 billion. [fn 6 ] The enforcement of antitrust laws atrophied into nothing: as one observer said of the late 1980's, "such concentrations
had not been allowed since the early days of antitrust at the beginning of the century."
George Bush's friend Henry Kravis raised money for his leveraged buyouts from a number of sources. Money came first of all from
insurance companies such as the Metropolitan Life Insurance Company of New York, which cultivated a close relation with KKR over
a number of years. Met was joined by Prudential, Aetna, and Northwest Mutual. Then there were banks like Manufacturers Hanover Trust
and Bankers Trust. All these institutions were attracted by astronomical rates of return on KKR investments, estimated at 32.2% in
1980, 41.8% in 1982, 28% in 1984, and 29.6% in 1986. By 1987, KKR prospectus boasted that they had carried out the first large LBO
of a publicly held company, the first billion-dollar LBO, the first large LBO of a public company via tender offer, and the largest
LBO in history, Beatrice Foods.
Then came the state pension funds, who were also anxious to share in these very large returns. The first to begin investing with
KKR was Oregon, which shovelled money to KKR like there was no tomorrow. Other states that joined in were Washington, Utah, Minnesota,
Michigan, New York, Wisconsin, Illinois, Iowa, Massachusetts, and Montana. The decisions to committ funds were typically made by
state boards. An example is Minnesota: here the State Board of Investment is made up of the Governor, the state Treasurer, the state
auditor, the Secretary of State, and the Attorney General, currently Skip Humphrey. Some of these funds are so heavily committed
to KKR that if any of the highly-leveraged deals should go sour in the current "recession," pensions for many retired state workers
in those states would soon cease to exist. In that eventuality, which for many working people has already occurred, the victims should
remember George Bush, the political godfather of Henry Kravis and KKR.
KKR had one other very important source of capital for its deals: this was the now-defunct Wall Strreet investment firm of Drexel,
Burnham, Lambert, and its California-based junk bond king, Michael Milken. Drexel and Milken were the most important single customers
KKR had. (Drexel had its own Harriman link: it had merged with Harriman Ripley & Co. of New York in 1966.) During the period of close
working alliance between KKR and Drexel, Milken's junk-bond operation raised an estimated $20 billion of funds for KKR. Junk bonds
were high-risk, high-yield, junior debt securities that Milken floated. He started off with junk bonds issued by fly-by-night insurance
companies owned by financiers seeking to emerge from the penumbra of Meyer Lansky. These included Carl Lindner and his Great American;
Saul Steinberg and his Reliance Insurance Co., Meshulam Riklis and his Rapid American group; Laurence Tisch and CNA; Nelson Peltz;
Victor Posner; Carl Icahn; Thomas Spiegel and his Columbia Savings and Loan; and Fred Carr, a financial gunslinger of the 1960's
and his First Executive Corp. insurance firm. Later, the circle of Milken's customers would expand to include commercial banks, savings
and loans, mutual funds, upscale insurance companies and others who could not resist the high yields. These robbery barons of modern
usury were dubbed "Milken's monsters" by one of their number, Meshulam Riklis.
All of these personages pranced at Milken's annual meetings in Beverley Hills, which were followed by evenings of sumptuous entertainment.
These became known as "the predators' ball," and attracted such people as T. Boone Pickens, Icahn, Irwin Jacobs, Sir James Goldsmith,
Oscar Wyatt, Saul Steinberg, Boesky, Lindner, the Canadian Belzberg family, Ron Perelman, and other such figures.
First Executive Corp. was the first great bankruptcy among the insurance companies in early 1991, giving the depression of the
1990's a dimension that the economic-financial conflagration of the 1930's did not possess. First Executive Life succumbed to losses
on its junk bond portfolio, and it will be the first of many insurance companies to find bankrutpcy via this route. Shortly thereafter,
Mutual Benefit Life Insurance Company of New Jersey was seized by state regulators. Mutual Benefit was also the victim of combined
real estate and junk bond losses, and more retirement plans were threatened with annihlitation. Those whose pensions are lost must
recall the junk bond united front that reached from Milken to Kravis to Bush.
Spiegel's Columbia S&L is a classic case of a thrift institution that went wild in its acquisition of Milken's high-yield junk.
At one time this instutution had about $10 billion of junk in its portfolio. Columbia S&L was seized by federal regulators during
the early months of 1990. Although many savings and loan bankruptcies have been caused by real estate speculation, many must also
be attributed to a failed quest for a junk bonanza.
Milken's silent partner was Ivan Boesky, the arbitrageur who went beyond program trading to become a silent partner in advancing
Milken's stockjobbing: sometimes Milkenm would have Boesky begin to acquire the stock of a certain company so as to signal to the
market that it was in play, setting off a stampede of buyers when this suited Milken's strategy.
The Beatrice LBO illustrates how necessary Milken's role was to the overall strategy of Bush backer Kravis. Beatrice was the biggest
LBO up to the time it was completed in January-February 1986, with a price tag of $8.2 billion. As part of this deal, Kravis gave
Milken warrants for five million shares of stock in the new Beatrice corporation. These warrants could be used in the future to buy
Beatrice shares at a small fraction of the market price. One result of this would be a dilution of the equity of the other investors.
Milken kept the warrants for his own account, rather than offer them to his junk bond buyers in order to get a better price for the
Beatrice junk bonds. Later in the same year, KKR bought out Safeway grocery stores for $4.1 billion, of which a large part came from
Milken.
After 1986, Kravis and Roberts were gripped by financial megalomania. Between 1987 and 1989, they acquired 8 additional companies
with an aggregate price tag of $43.9 billion. These new victims included Owens-Illinois glass, Duracell, Stop and Shop food markets,
and, in the landmark transaction of the 1980's, RJR Nabisco. RJR Nabisco was the product of a number of earlier mergers: National
Bisucuit Company had merged with Standard Brands to form Nabisco Brands, and this in turn merged with R.J. Reynolds Tobacco to create
RJR Nabisco. It is important to recall that R.J. Reynolds was the concern traditionally controlled by the family of Bush's personal
White House lawyer, C. Boyden "Boy" Gray.
The battle for control of RJR Nabisco was lost by RJR Nabisco chairman Ross Johnson, Peter Cohen of Sherason Lehman Hutton and
the notorious John Gutfruend of Salomon Brothers. KKR opposed this group, and a third offer for RJR came from First Boston. The Johnson
offer and the KKR were about the same, but a cover story in the Luce-Skull and Bones Time Magazine in early December, 1988 targetted
Johnson as the greedy party. The attraction of RJR Nabisco, one of the twenty largest US corporations, was an immense cash flow supplied
especially by its cigarette sales, where profit margins were enormous. The crucial phases of the fight corresponded with the presidential
election of 1988: Bush won the White House, so it was no surprise that Kravis won RJR with a bid of about $109 per share compared
to a stock price of about $55 per share before the company was put into play, giving the prebuyout shareholders a capital gain of
more than $13.3 billion. How much of that went to Boy Gray of the Bush White House?
The RJR Nabisco swindle generated senior bank debt of about $15 billion. The came $5 billion of subordinate debt, with the largest
offering of junk bonds ever made. Then came an echelon of even more junior debt with payment in securities and junk bonds that payed
interest not in cash, but in other junk bonds. But even with all the wizardry of KKR, there could have been no deal without Milken
and his junk bonds. The banks could not muster the cash required to complete the financing; KKR required bridge loans. Merrill Lynch
and Drexel were in the running to provide an extra $5 billion of bridge financing. Drexel got Milken's monsters and many others to
buy short-term junk notes with an interest rate that would increase the longer the owner refrained from cashing in the note. Drexel's
"increasing rate notes" easily brought in the entire $5 billion required.
In November of 1986, Ivan Boesky pleaded guilty to one felony count of manipulating securities, and his testimony led to the indictment
of Milken in March, 1989, some months after the RJR Nabisco deal had been sewn up. In order to protect more important financial players,
Milken was allowed to plead guilty in April 1990 a five counts of insider trading, for which he agreed to pay a fine of $600 million.
On February 13, 1990, Drexel Burnham Lambert had declared itself bankrupt and gone into liquidation, much to the distress of junk
bond holders everywhere who saw the firm as a junk bond buyer of last resort.
By this time, many of the great LBOs had begun to collapse. Robert Campeau's retail sales empire of Allied and Federated stores
blew up in the fall of 1989, bring down almosty $10 billion of LBO debt. Revco, Freuhauf, Southland (Seven-Eleven stores), Resorts
International, and many other LBOs went into chapter eleven proceedings. As for KKR's deals, they also began to implode: SCI-TV,
a spin-off of Storer Broadcasting, announced that it could not service its $1.3 billion of debt, and forced the holders of $500 million
in junk bonds to settle for new stocks and bonds worth between 20 and 70 cents on the dollar. Hillsborogh Holdings, a subsidiary
of Jim Walker, went bankrupt, and Seamans Furniture put through a forced restructuring of its debt.
It was clear at the time of the RJR Nabisco LBO that the totality of the company's large cash flow would be necessary to maintain
payments of $25 billion of debt. That will take a lot of animal crackers and Winstons. If RJR Nabisco had been a foreign country,
it would have ranked among the top 15 debtor nations, coming in between Peru and the Phillipines. Within a short time after the LBO,
RJR Nabisco proved unable to maintain payments. KKR was forced to inject several billion dollars of new equity, take out new bank
loans, and dunning its clients for an extra $1.7 billion. RJR Nabisco by the early autumn of 1991 was a time bomb ticking away near
the center of a ruined US economy. If citizens are bright enough to follow the line that leads back from Milken to Kravis to Bush,
RJR and similar horror stories could politically demolish George Bush.
In September 1987, Senator William Proxmire submitted a bill which aimed at restricting takeovers. Two weeks later, Rep. Rostenkowski
of Illinois offered a bill to limit the tax deductability of the interest on takeover debt. The LBO gang in Wall Street was horrified,
even though it was clear that the Reagan-Bush team would oppose such legislation using every trick in the book. Later, LBO ideologues
blamed the Congress for causing the crash of October, 1987.
Kravis has always been adamant in opposing any restrictions on the kind of insanity we have briefly reviewed. "I'm very much of
a free-market person," says Kravis. I don't want interference. My life…you've listened to my life story, I don't want interference!
The best thing to happen to people and this country is a free market system, and I'm very concerned, if we don't keep the right people
in office, that we're not going to have this free-market environment. And we should have it!" [fn 7]
This corresponds exactly to Bush's policy. During the 1988 campaign, Bush presented his views on hostile takeovers, using the
forum provided by his old friend T. Boone Pickens' USA Advocate, a monthly newsletter published by the United Shareholders Association,
which Pickens runs. In the October, 1988 issue of this publication, Bush made clear that he was not worried about leveraged buyouts.
Rather, what concerned Bush was the need to prevent corporations from adopting defenses to deter such attempted hostile takeovers.
Bush indicated he wanted to ban poison pill defenses, which often take the form of a new class of stock in a company that lets its
holders buy stock in the successor company at rock-bottom prices after a buyout. Poison pills were invented by New York lawyer Marty
Lipton, and did not deter raider Sir James Goldsmith from seizing control of Crown Zellerbach in the mid-1980's, although Goldsmith's
costs were increased.
Bush also railed against "golden parachutes," which provide lucrative settlements for top executives who are ousted as the result
of a takeover:
I am frankly a bit skeptical about claims that these so-called 'defensive' tactics are necessary to encourage long-term investment.
Studies suggest that prices of stock reflect information that is publicly available. Sometimes it seems that managers use these
tactics to save themselves from the competitive pressures of the market for corporate control, not to protect the interests of
the shareholders.
Bush was clearly hostile to any federal restrictions on hostile takeovers. If anything, he was closer to those who demanded that
the federal government stop the states from passing laws that interfere with LBO activity. For that notorious corporate raider and
disciple of Chairman Mao Liedtke, T. Boone Pickens, the message was clear:
I know that Vice President Bush is a free enterpriser. I don't think there is any doubt if you look at what Vice President Bush
has said and what Gov. Dukakis has said that Bush is pro-stockholder. I would say Dukakis is pro-management. *
The expectations of Pickens and his ilk were not disappointed by the Bush cabinet that took office in January, 1989. The new Secretary
of the Treasury, Bush crony Nicholas Brady, was only a supporter of leveraged buyouts; he had been one of the leading practitioners
of the mergers and acquisitions game during his days in Wall Street as a partner of the Harriman-allied investment firm of Dillon
Read.
The family of Nicholas Brady has been allied for most of this century with the Bush-Walker clan. During his Wall Street career
at Dillon, Read, Brady, like Bush, cultivated the self-image of the patrician banker, becoming a member of the New York Jockey Club
and racing his own thorougbred horses at the New York tracks once presided over by George Herbert Walker and Prescott Bush. Brady,
like Bush, is a member of the Bohemian Club of San Francisco and attended the Bohemian Grove every summer. Inside the Bohemian Grove
oligarchic pantheon, Brady enjoys the special distinction of presiding over the prestigious Mandalay Camp (or cabin complex), the
one habitually attended by Henry Kissinger, and sometimes frequented by Gerald Ford. When Senator Harrison Williams of New Jersey
was driven out of office by the FBI's "Abscam" entrapment operation, Brady was appointed to fill out the remainder of the term to
which Williams had been elected. Brady is also reportedly a victim of dyslexia.
At the Regency in Lower Manhattan, Brady rubbed elbows each morning at breakfast with Joe Flom and the rest of the the Skadden
Arps crowd, Arthur F. Long of D.F. King and Co., Marty Lipton, Arthur Liman, Felix Rohatyn, Boesky's friend Marty Siegel, and Joe
Perella of First Boston.
Brady's LBO experience goes back to the 1985 battle for control of Unocal, the former Union Oil Company. T. Boone Pickens and
Mesa Petroleum attempted a hostile takeover of Unocal through a complex "two-tiered" tender offer by which those shareholders willing
to help Pickens to a majority stake in Unocal would receive cash payment for their stocks, but those forced to sell to Pickens after
he had gone over the top would be compelled to accept junk securities. In order to defend against this two-tier, front-loaded hostile
tender offer, Unocal management called in Brady's Dillon Read together with Goldman Sachs.
Working with Goldman Sachs, Brady helped to devise a new form of anti-takoever defense for Unocal: it was in effect a self-inflicted
leveraged buyout, a self-tender for a large portion of Unocal's stock which the company offered to buy back at a higher price than
the one stipulated in the Pickens tender offer, although Unocal would refuse to accept any of the shares held by Pickens. Pickens
tried to overturn this selective self-tender in the courts of Delaware, but he was defeated.
The self-tender sponsored by Brady's investment bankers was actually a usurious chicken game: Unocal's tender offer to buy 80
million shares at an astronomical $72 per share in comparison with the $54 offered by Pickens. This meant $5.8 billion in new high-interest
junk-bond debt for Unocal, in another triumph of debt over equity. The premiss was that if Pickens insisted on going ahead, he might
very well take over Unocal, but the new debt burden would mean that the company would soon go bankrupt and Pickens would lose all
his money. In this case, the Unocal management advised by Nick Brady was more than willing to gamble with the existence of their
entire company, and thus with the livelihoods of thousands of workers and their families, to ward off the advances of Pickens. In
the end, this device would load Unocal with a crushing $3.6 billion of high-interest debt as a result of the plan advocated by Brady's
firm.
Nick Brady got the job he presently occupies by heading up a study of the October, 1987 stock market crash, the results of which
Brady announced on a cold Friday afternoon in January, 1988, just after the New York stock market had taken another 150 point dive.
The study of the October, 1988 "market break" was produced by a group of Wall Street and Treasury insiders billed as the "Presidential
Task Force on Market Mechanisms." At the center of the report's attention was the relation between the New York Stock Exchange, American
Stock Exchange, and NASDAC over-the-counter stock trading, on the one hand, and the future, options, and index trading carried on
at the Chicago Board of Trade, Chicago Board Options Exchange, and Chicago Mercantile Exchange. The Brady group examined the impact
of program trading, index arbitrage and portfolio insurance strategies on the behavior of the markets that led to the crash. The
Brady report recommended the centralization of all market oversight in a single federal agency, the unification of clearing systems,
consistent margins, and the installation of circuit breaker mechanisms. That, at least, was the public content of the report.
The real purpose of the Brady report was to create a series of drugged and manipulated markets using funds from the Federal Reserve
and other sources. The Brady group realized that if the Chicago futures price of a stock or stock index could be artifically inflated,
this would be of great assistance in propping up the value of the underlying stock in New York. The Brady group focussed on the Major
Market Index of 20 stock futures traded on the Chicago Board of Trade, which roughly corresponded to the principal stocks of the
Dow Jones Industrial Average. As long as the MMI was trading at a higher price than the DJIA, the program traders and index arbitrageurs
would tend to sell the MMI and buy the underlying stock in New York in order to lock in their stockjobbing profits. The great advantage
of this system was first of all that some tens of millions of dollars in Chicago could generate some hundreds of millions of dollars
of demand in New York. In addition, the margin requirements for borrowing money for use to buy futures in Chicago were much less
stringent than the requirements for margin buying of stocks in New York. Liquidity for this operation could be drawn from banks and
other institutions loyal to the Bush-Baker-Brady power cartel, with full backup and assistance from the district banks of the Federal
Reserve.
The Brady "drugged market" mechanisms, with the refinements they have acquired since 1988, are a key factor behind the Dow Jones
Industrials' seeming defiance of the law of gravity in attainting a new all time high well above the 3000 mark during 1991.
Brady's exercise was nothing new: during the collapse of the Earl of Oxford's South Sea bubble in 1720, the South Sea Company
attempted to support the astronomically inflated price of its shares by becoming a buyer of its own stock until its cash and credit
reserves were exhausted. Such maneuvers can indeed delay the onset of the final collapse for some period of time, but they guarantee
that when the panic, crash and bankruptcy finally become overwhelming, the aggregate damage to society will be far greater than if
the crash had been allowed to occur according to its own spontaneous dynamic. For this reason, a large part of the fearful price
that is being exacted from the American people as the depression unfolds in its full fury is a result of the Bush-Brady measures
to postpone the inevitable reckoning beyond the 1988 election.
One important case study of the impact of Bush's Task Force on Regulatory Relief is the meat-packing industry. In February 1981,
when Reagan gave Bush "line" authority for deregulation, he promulgated Executive Order 12291, which established the principle that
federal regulations "be based upon adequate evidence that their potential benefits to society are greater than their potential costs
to society." In practice, that meant that Bush threw health and safety standards out the window in order to ingratiate himself with
entrepreneurs. In March 1981, Bush wrote to businessmen and invited them to enumerate the 10 areas they wanted to see deregulated,
with specific recommendations on what they wanted done. By the end of the year Bush's office issued a self-congratulatory report
boasting of a "significant reduction in the cost of federal regulation." In the meatpacking industry, this translated into production
line speedup as jobs were eliminated, with a cavalier attitude towards safety precautions. At the same time the Occupational Safety
and Health Administration sharply reduced inspections, often arriving only after disabling or lethal accidents had already occured.
In 1980 there were 280 OSHA inspections in meat packing plants, but in 1988 there were only 176. This, in an industry in which the
rate of personal injury is 173 persons per working day, three times the average of all remaining US factories. [fn 8]
Bush used his Regulatory Relief Task Force as a way to curry favor with various business groups whose support he wanted for his
future plans to assume the presidency in his own right. According to one study made midway through the Reagan years, Bush converted
his own office "into a convenient back door for corporate lobbyists" and "a hidden court of last resort for special interest groups
that have lost their arguments in Congress, in the federal courts, or in the regulatory process." "Case by case, the vice president's
office got involved in some mean and petty issues that directly affect people's health and lives, from the dumping of toxic pollutants
to government warnings concerning potentially harmful drugs." [fn 9]
There were also reports of serious abuses by Bush, especially in the area of conflicts of interest. In one case, Bush intervened
in March, 1981 in favor of Eli Lilly & Co., a company of which he had been a director in 1977-79. Bush had owned $145,000 of stock
in Eli Lilly until January, 1981, after which it was placed in a blind trust, meaning that Bush allegedly had no way of knowing whether
his trust still owned shares in the firm or not. The Treasury Department had wanted to make the terms of a tax break for US pharmaceutical
firms operating in Puerto Rico more stringent, but Vice President Bush had contacted the Treasury to urge that "technical" changes
be made in the planned restriction of the tax break. By April 14 Bush was feeling some heat, and he wrote a second letter to Treasury
Secretary Don Regan asking that his first request be withdrawn because Bush was now "uncomfortable about the appearance of my active
personal involvement in the details of a tax matter directly affecting a company with which I once had a close association." [fn
10] Bush's continuing interest in Eli Lilly is underlined by the fact that the Pulliam family of Indiana, the family clan of Bush's
later running mate Dan Quayle, owned a very large portion of the Eli Lilly shares. Bush's choice of Quayle was but a re-affirmation
of a pre-exisiting financial and political alliance with the Pulliam interests, which also include a newspaper chain.
The long-term results of the deregulation campaign that Bush used to burnish his image are suggested by the September, 1991 fire
in a chicken-processing plant operated by Imperial Food Products in Hamlet, North Carolina, in which 25 persons died. One obvious
cause of this tragedy was an almost total lack of adequate state and federal inspection, which might have identified the fire hazards
that had built up over a period of years. This fire led during October, 1991 to the bankruptcy of the Imperial Food Products Company,
which could not obtain financing to roll over its short-term and long-term debt obligations. 225 workers at the Hamlet plant lost
their jobs, as did 200 workers at the company's other plant in Cumming, Georgia.
Bush's idea of ideal labor-management practices and corporate leadership in general appears to have been embodied by Frank Lorenzo,
the most celebrated and hated banquerotteur of US air transport. Before his downfall in early 1990, Lorenzo combined Texas Air, Continental
Airlines, New York Air, People Express, and Eastern Airlines into one holding, and then presided over its bankruptcy. Now Eastern
has been liquidated, and the other components are likely to follow suit. Along the way to this debacle, Lorenzo won the sympathy
of the Reagan-Bush crowd through his union-busting tactics: he had thrown Continental Airlines into bankruptcy court and used the
bankruptcy statutes to break all union contracts, and to break the unions themselves as well. Continental pilots had been stripped
of seniority, benefits, and bargaining rights, and had been subjected to a massive pay cut under threat of being turned out into
the street. In 1985, the average yearly wage of a pilot was $87,000 at TWA, but less than $30,000 at Continental. The hourly cost
of a flight crew for a DC-10 at American Airlines was $703, while at Continental it was only $194. It is an interesting commentary
on such wage gouging that Lorenzo neverthless managed to bankrupt Continental by the end of the decade.
George Bush has been on record as a dedicated union-buster going back to 1963-64, and he has always been very friendly with Lorenzo.
When Bush became president, this went beyond the personal sphere and became a revolving door between the Texas Air group and the
Bush Administration. During 1989, the Airline Pilots' Association issued a list of some 30 cases in which Texas Air officials had
transferred to jobs in the Bush regime and vice versa. By the end of 1989, Bush's top Congressional lobbyist was Frderick D. McClure,
who had been a vice president and chief lobbyist for Texas Air. McClure had traded jobs with Rebecca Range, who had worked as a public
liasion for Reagan until she moved over to the post of lead Congressional lobbyist for Texas Air. John Robson, Bush's deputy Secretary
of the Treasury, was a former member of the Continental Airlines board of directors. Elliott Seiden, once a top antritrust lawyer
for the Justice Department, switched to being an attorney for Texas Air. [fn 11]
When questioned by Jack Anderson, McClure and Robson claimed that they recused themselves from any matters involving Texas Air.
But McClure signed a letter to Congress announcing Bush's opposition to any government investigation of the circumstances surrounding
the Eastern Airlines strike in early 1989. Bush himself has always stonewalled in favor of Lorenzo. During the early months of the
landmark Eastern Airlines strike, in which pilots, flight attendants, and machinists all walked out to block Lorenzo's plan to downsize
the airline and bust the unions, the Congress attempted to set up a panel to investigate the dispute, but Bush was adamant in favor
of Lorenzo and vetoed any government probes. [fn 12]
Lorenzo's activities were decisive in the wrecking of US airline transportation during the Reagan-Bush era. When Carl Icahn was
in the process of taking over TWA, he was able to argue that the need to compete in many of the same markets in which Lorenzo's airlines
were active made mandatory that the TWA work force accept similar sacrifices and wage cuts. The cost-cutting criteria pioneered with
such ruthless aggressivity by Lorenzo have had the long-term of effect of reducing safety margins and increasing the risk the travelling
public must confront in any decision to board an airliner operating under US jurisdiction. Eastern has disappeared, and Continental
has been joined in bankruptcy by Midway, America West, while Pan American sold off a large part of its operations to Delta while
teetering on the verge of liquidation. Icahn's TWA is bankrupt in every sense except the final technicalities. Northwest, having
been taken through the wringer of an LBO by Albert Cecchi, is now busy lining up subsidies from the state of Minnesota and other
sources as a way to stay afloat. It is widely believed that when the dust settles, only Delta, American, and perhaps United will
remain among the large nationwide carriers. At that point hundreds of localities will be served by only one airline, and that airline
will proceed to raise its fares without any fear of price competition or any other form of competition. With that, air travel will
float beyond the reach of much of the American middle class, and the final fruits of airline deregulation will be manifest. In the
meantime, it must be feared that the erosion of safety margins will exact a growing toll of human lives in airline accidents. If
such tragedies occur, the bereaved relatives will perhaps recall George Bush's friend Frank Lorenzo.
And how, the reader may ask, was George Bush doing financially while surrounded by so many billions in junk bonds? Bush had always
pontificated that he had led the fight for full public disclosure of personal financial interests by elected officials. He never
tired of repeating that "in 1967, as a freshman member of the House of Representatives, I led the fight for full financial disclosure."
But after he was elected to the vice presidency, Bush stopped disclosing his investments in detail. He stated his net worth, which
had risen to $2.1 million by the time of the 1984 election, representing an increase of some $300,000 over the previous five years.
Bush justified his refusal to disclose his investments in detail by saying that he didn't know himself just what securities he held,
since his portfolio was now in the blind trust mentioned above. The blind trust was administered by W.S. Farish & Co. of Houston,
owned by Bush's close crony William Stamps Farish III of Beeville, Texas, the descendant of the Standard Oil executive who had backed
Heinrich Himmler and the Waffen SS. [fn 13]
1. Walter Pincus and Bob Woodward, "Doing Well With help From Family, Freinds," Washington Post, August 11, 1988.
2. Houston Chronicle, February 21, 1963. See clippings available in Texas Historical Society, Houston.
3. Thomas Petzinger, Oil and Honor (New York, 1987), pp. 244-245.
4. See Washington Post, February 5, 1989.
5. For the relation between George Bush and Henry Kravis, see Sarah Bartlett, The Money Machine: How KKR Manufactured Power &
Profits (New York, 1991), pp. 258-259 and 267-270.
6. Roy C. Smith, The Money Wars (New York, 1990), p. 106.
7. Bartlett, pp. 269-270.
8. Washington Post, September 29, 1988.
9. Judy Mann, "Bush's Top Achievement," Washington Post, November 2, 1988.
10. William Greider, Rolling Stone, April 12, 1984.
11. "Bush Denies Influencing Drug Firm Tax Proposal," Washington Post, May 20, 1981.
12. Jack Anderson and Dale Van Atta, "The Bush-Lorenzo Connections," Washington Post, December 21, 1989.
13. James Ridgway, The Tax Records of Reagan and Bush, Texas Observer, September 28, 1984.
[Aug 31, 2010] Mega Private Equity Deal in 2010: Some Fundamentals in Place By
Static
Chaos
Submitted by Static Chaos on 08/21/2010 19:45 -0500
With Merger and Acquisition really picking up steam in the last month, the question arises whether private equity will be able
to complete a major move in the remainder of 2010. This past week Intel acquired software security firm McAfee for $7.7 billion in
an all cash deal and the prior week BHP offered $40 Billion to take over Potash Corp. from shareholders.
In contrast, the latest deal involving private equity -- Blackstone acquiring Dynergy for $543 million--is a far cry from the
heyday of private equity deals back in 2006, when deals such as Harrah`s Entertainment, Hospital Corp. of America, Clear Channel
Communications, Kinder Morgan, and Freescale Semiconductor each worth more than $17 Billion dollars took place. In 2007, Blackstone
acquiring Equity Office Properties Trust for $38.9 billion, and TXU went for a $42 Billion three way deal with Goldman Sachs, Kohlberg
Kravis Roberts, and TPG.
So, all this M&A activity begs the question--where the heck is private equity? Can they still compete with large companies sitting
on a pile of cash?
I understand the financing travails and the freezing up of the credit markets in 2008, but this is late 2010 and supposedly private
equity has all this money from investors that they have been unable to utilize for deals over the last three years. In short, what
could private equity be waiting for?
There are some great bargains out there in undervalued companies that have huge cash flows, little debt, large cash stockpiles,
and there is a low cost of capital right now for financing deals. Do you need an engraved invitation to the ever-present M&A party?
If you cannot complete a major deal now, then when will you be able to do a major deal?
The cost of capital is only going to go up in the future, in a major way. Frankly, it seems that the private equity community
is like the proverbial deer in headlights, and still stuck in the malaise, fear, and uncertainty of the past three years that they
are slow to react to the changing landscape of deal making. And this is their core business deal making.
It is apparent that the dynamics have changed in the private equity buyout game, and maybe the firms are waiting for the good
old days. But the good old days are long gone, and you have capital to deploy, so you'd better either start adapting to the new environment
or start giving your capital back to investors so they can realize a better return on their money.
There is the stigma of all those bad private equity sham deals that have occurred over the last decade that probably makes many
banks weary of private equity when they inquire about financing deals. So, yes the days of the sham deals are over where you buyout
some garbage company that has a declining business model, uncompetitive business, but little debt, and you take it private, lever
up the balance sheet with monstrous debt obligations, pay yourself a huge dividend recapping your original investment, and then taking
it back public in a better market with higher multiples. The reason this type of deal is dead is because there will always be a bag
holder, and banks have ultimately been caught in the crossfire too many times as the one picking up the pieces in the end.
Most likely, all future private equity deals will involve more of the firm`s own money in the deal. But private equity, by most
accounts, has been sitting on large amounts of capital, so the money is there for deals. Furthermore, there are plenty of legitimate
value enhancing, highly attractive deals out there, which this cash may be applied to right now, as there are great fundamentals
(outlined below) in the marketplace for the private equity model.
The valuations of many public companies are well below the average of the last 10 years.
There are many solid companies that have little debt on their books.
Many companies with strong cash flows.
The cost of capital is extremely attractive at these rates of financing, providing banks believe that private equity firms
have some skin in the game and willing to share the risk. But this should have always been the model, as shared risk inevitably
leads to high quality deals and not the sham deals where risks are absorbed by others.
The M&A cycle for the next 10 years is just starting, so the best deals are still available.
The next cycle will be highly inflationary, which means you are taking assets out of the market at the bottom of a deflationary
cycle, and bringing these same assets back to the public markets in three years in the midst of an inflationary cycle where the
value of the same assets receives a much higher multiple due to the inflation of asset prices.
Banks have recapitalized for the past three years, and they now need to start applying more of their capital base to lending
projects with higher returns, they just need the demand component to pick up, and this is where private equity firms come into
fill this void.
So, how likely is it that we have a$100 Billion private equity deal in the remainder of this year? Well, at the beginning of this
year it would have seemed impossible, but the dynamics are there for a deal to occur. Things really just have to fall into place.
With the latest rumblings of M&A activity, there is an increasing chance that we witness a Mega Private Equity deal that really shakes
up the current valuation models regarding what public companies are worth.
A case in point is a company like HP with a trailing P/E around 11, has solid growth, leader in numerous business segments within
technology, sits on a large amount of cash, and is grossly mispriced in the market place compared to a firm like Dell with a trailing
P/E around 16.
HP has many of the components necessary for a private equity mega deal, solid company with a bright future, extremely low multiple,
assets are worth more than the current market cap if sold separately, low relative debt, strong cash flows, large cash reserves,
relevant industry due to demands from corportations to increase productivity, lacks a CEO, leverageable, and most of all--very financeable
for a major deal to banks.
This is one of my candidates for a Mega Private Equity deal. What are some of the companies that you think will make for great Mega
Private Equity Deals for the remainder of 2010?
Selected Comments
williambanzai7:
Sham deal is synonymous with private equity, at least in the M&A sense.
Bartanist :
My experience with private equity is that the entire model is based on borrowing money from banks at libor +1.25% paying the
acquisition price and then financing the target company in a couple of tranches at 7% to 9% then the secondary tranche at 14%
to 17%.
The target companies are cash strapped and have to free cash through consolidation and firing all expensive people then hiring
cheap people, but the PE company has plenty of cash flow as the target company shrinks its balance sheet and expenses.
The only hitch with the PE companies is that they then want to sell the target companies before the shit hits the fan
due to a complete lack of investment during the PE company's ownership.
My guess is that the banks and others have caught onto the scam.
Monkey Craig:
PE is also reliant on few, if any, covenants and credit officers may push for these in the future if leverage levels increase
or acquisitions get sillier....a vibrant PE market was a bubble activity, think 2005 or 2006
Mitchman :
PE has a 5 to 7 year time horizon on their investments and the outlook is way too uncertain to take the risk that they will
be able to get out at a profit in that time frame.
Market Analyst :
Another potential candidate would be GS with a p/e around 8, and a current market cap around $77 Billion, and too high profile
as a public company, need to get out of the spotlight. Shareholders might want more of a dividend going forward instead of those
excessive bonuses.
Dismal Scientist :
Time to take GS private then. Am waiting for the first MBO's to come in this cycle. Not to mention a continuation of the M&A
we are seeing, which is just as well for those pesky investment banker types....
PE are playing musical chairs in Europe and Asia - those raising new funds are busily selling their portfolio to those trying
to spend some of the $500b of dry powder to fend off limited partners seeking a reduction in the fat 2% fee. Its
window dressing a la PE. But don't shed tears for the investors/limited partners, they are nothing like the long suffering retail
investors pulling out record sums from mutual funds. The LPs are exclusively the Harvards, Princeton, Yale (Swensen hah!), Calpers
and xICs - they manage money belonging to faceless organization and fly around attending LP meetings all year round. They won't
be jeopardising their relationship with the PE funds - that would be like firing themselves from their jobs; besides I know of
no LP who do not enjoy the LP meetings aka pilgrimage to Hawaii or Half Moon Bay to paly golf, or Shanghai/Macau to be "entertained".
MichaelG :
Aren't HP pretty big on leasing? I'm just wondering if they'd be much affected by the accounting rules changes Bruce Krasting
mentioned the other day.
I'm not a CPA, but I understand that the new rules will hurt retailers which lease their facilities (think SBUX). The retailers
will have to bring their liabilities on balance sheet and this will increase debt levels. Obviously, the sophisticated bond buyers
and lenders have been reading the operating leases (disclosed in the Notes of the Audit) for years.
TGT, by the way, owns the bulk of their store locations.
Inside Casino Capitalism Barbarians at the Gate: The Fall of RJR Nabisco
By Bryan Burrough and John Helyar
Harper & Row. 528 pp. $22.95
In 1898, Adolphus Green, chairman of the National Biscuit Company, found himself faced with the task of choosing a trademark for
his newly formed baking concern. Green was a progressive businessman. He refused to employ child labor, even though it was then a
common practice, and he offered his bakery employees the option to buy stock at a discount. Green therefore thought that his trademark
should symbolize Nabisco's fundamental business values, "not merely to make dividends for the stockholders of his company, but to
enhance the general prosperity and the moral sentiment of the United States." Eventually he decided that a cross with two bars and
an oval – a medieval symbol representing the triumph of the moral and spiritual over the base and material – should grace the package
of every Nabisco product.
If they had wracked their brains for months, Bryan Burrough and John Helyar could not have come up with a more ironic metaphor
for their book. The fall of Nabisco, and its corporate partner R.J. Reynolds, is nothing less than the exact opposite of Green's
business credo, a compelling tale of corporate and Wall Street greed featuring RJR Nabisco officers who first steal shareholders
blind and then justify their epic displays of avarice by claiming to maximize shareholder value.
The event which made the RJR Nabisco story worth telling was the 1988 leveraged buyout (LBO) of the mammoth tobacco and food conglomerate,
then the 19th-largest industrial corporation in America. Battles for corporate control were common during the loosely regulated 1980s,
and the LBO was just one method for capturing the equity of a corporation. (In a typical LBO, a small group of top management and
investment bankers put 10 percent down and finance the rest of their purchase through high-interest loans or bonds. If the leveraged,
privately-owned corporation survives, the investors, which they can re-sell public shares, reach the so-called "pot of gold"; but
if the corporation cannot service its debt, everything is at risk, because the collateral is the corporation itself.
The sheer size of RJR Nabisco and the furious bidding war that erupted guaranteed unusual public scrutiny of this particular piece
of financial engineering. F. Ross Johnson, the conglomerate's flamboyant, free-spending CEO (RJR had its own corporate airline),
put his own company into play with a $75-a-share bid in October. Experienced buyout artists on Wall Street, however, immediately
realized that Johnson was trying to play two incompatible games. LBOs typically put corporations such as RJR Nabisco through a ringer
in order to pay the mammoth debt incurred after a buyout. But Johnson, desiring to keep corporate perquisites intact, "low-balled"
his offer. Other buyout investors stepped forward with competing bids, and after a six-week-long auction the buyout boutique of Kohlberg,
Kravis, Roberts & Company (KKR) emerged on top with a $109-a-share bid. The $25-billion buyout took its place as one of the defining
business events of the 1980s
Burrough and Helyar, who covered the story for The Wall Street Journal, supply a breezy, colorful, blow-by-blow account
of the "deal from hell" (as one businessman characterized a leveraged buyout). The language of Wall Street, full of incongruous "Rambo"
jargon from the Vietnam War, is itself arresting. Buyout artists, who presumably never came within 10,000 miles of wartime
Saigon, talk about "napalming" corporate perquisites or liken their strategy to "charging through the rice paddies, not stopping
for anything and taking no prisoners."
At the time, F. Ross Johnson was widely pilloried in the press as the embodiment of excess; his conflict of interest was obvious.
Yet Burrough and Helyar show that Johnson, for all his free-spending ways, was way over his head in the major leagues of greed, otherwise
known as Wall Street in the 1980s. What, after all, is more rapacious: the roughly $100 million Johnson stood to gain if his deal
worked out over five years, or the $45 million in expenses KKR demanded for waiting 60 minutes while Ross Johnson prepared a final
competing bid?
Barbarians is, in the parlance of the publishing world, a good read. At the same time, unfortunately, a disclaimer issued
by the authors proves only too true. Anyone looking for a definitive judgment of LBOs will be disappointed. Burrough and Helyar do
at least ask the pertinent question: What does all this activity have to do with building and sustaining a business?
But authors should not only pose questions; they should answer them, or at least try.
Admittedly, the single most important answer to the RJR puzzle could not be provided by Burrough and Helyar because it is not
yet known. The major test of any financial engineering is its effect on the long-term vitality of the leveraged corporation, as measured
by such key indicators as market share (and not just whether the corporation survives its debt, as the authors imply). However, a
highly-leveraged RJR Nabisco is already selling off numerous profitable parts of its business because they are no longer a
"strategic fit": Wall Street code signifying a need for cash in order to service debts and avoid bankruptcy.
If the authors were unable to predict the ultimate outcome, they still had a rare opportunity to explain how and why an LBO is
engineered. Unfortunately, their fixation on re-creating events and dialogue – which admittedly produces a fast-moving book – forced
them to accept the issues as defined by the participants themselves. There is no other way to explain the book's uncritical stance.
When, for example, the RJR Nabisco board of directors tried to decide which bid to accept, Burrough and Helyar report that several
directors sided with KKR's offer because the LBO boutique "knew the value of keeping [employees] happy." It is impossible to tell
from the book whether the directors knew this to be true or took KKR's word. Even a cursory investigation would have revealed that
KKR is notorious for showing no concern for employees below senior management after a leveraged buyout.
The triumph of gossip over substance is manifest in many other ways. Wall Street's deft manipulation of the business press is
barely touched upon, and the laissez-faire environment procured by buyout artists via their political contributions is scarcely
mentioned, crucial though it is. Nowhere are the authors' priorities more obvious than in the number of words devoted to Henry Kravis's
conspicuous consumption compared to those devoted to the details of the RJR deal. In testimony before Congress last year, no less
an authority than Treasury Secretary Nicholas Brady – himself an old Wall Street hand – noted that the substitution of tax-deductible
debt for taxable income is "the mill in which the grist of takeover premiums is ground."
In the case of RJR Nabisco, 81 percent of the $9.9 billion premium paid to shareholders was derived from tax breaks achievable
after the buyout. This singularly important fact cannot be found in the book, however; nor will a reader learn that after the buyout
the U.S. Treasury was obligated to refund RJR as much as $1 billion because of its post-buyout debt burden. In Barbarians,
more time is spent describing Kravis's ostentatious gifts to his fashion-designer wife than to the tax considerations that make or
break these deals.
Fulminations about the socially corrosive effects of greed aside, the buyout phenomenon may represent one of the biggest changes
in the way American business is conducted since the rise of the public corporation, nothing less than a transformation of managerial
into financial capitalism. The ferocious market for corporate control that emerged during the 1980s has few parallels in business
history, but there are two: the trusts that formed early in this century and the conglomerate mania that swept corporate America
during the 1960s. Both waves resulted in large social and economic costs, and there is little assurance that the corporate infatuation
with debt will not exact a similarly heavy toll.
As the economist Henry Kaufman has written, the high levels of debt associated with buyouts and other forms of corporate
restructuring create fragility in business structures and vulnerability to economic cycles. Inexorably, the shift away from
equity invites the close, even intrusive involvement of institutional investors (banks, pension funds, and insurance companies) that
provide the financing. Superficially, this moves America closer to the system that prevails in Germany and Japan, where historically
the relationship between the suppliers and users of capital is close. But Germany and Japan incur higher levels of debt for expansion
and investment, whereas equivalent American indebtedness is linked to the recent market for corporate control. That creates a brittle
structure, one that threatens to turn the U.S. government into something of an ultimate guarantor if and when things do fall about.
It is too easy to construct a scenario in which corporate indebtedness forces the federal government into the business of business.
The savings-and-loan bailout is a painfully obvious harbinger of such a development.
The many ramifications of the buyout mania deserve thoughtful treatment. Basic issues of corporate governance and accountability
ought to be openly debated and resolved if the American economy is to deliver the maximum benefit to society and not just unconscionable
rewards to a handful of bankers, all out of proportion to their social productivity. It is disappointing, but a sign of the times,
that the best book about the deal of deals fails to educate as well as it entertains.
Merchants of Debt: KKR and the Mortgaging of American Business
By George Anders
2002/09 - Beard Books
1587981254 - Paperback - Reprint - 354 pp.
US$34.95
Selected as one of the best business books of 1992 by Business Week.
With borrowed money, borrowed management, and a lot of nerve, Kohlberg Kravis Roberts acquired one Fortune 500 company after another
in the 1980s, epitomizing both the best and worst of Wall Street's stunning rise to power in the age of casino capitalism. In the
compelling book, the author explains why American business became so enchanted by debt; how KKR partners Jerome Kohlberg, Henry Kravis,
and George Roberts became billionaires; and how their takeovers affected America's economic strength. This fascinating, behind-the-scenes
account show how pride, jealousy, fear, and ambition fueled Wall Street's debt mania - with repercussions to millions of people.
From the back cover blurb:
With borrowed money, borrowed management, and a lot of nerve, Kohlberg Kravis Roberts acquired one Fortune 500 company after another
in the age of casino capitalism, KKR epitomized both the best -- and the worst -- of Wall Street's stunning rise to power in the
1980s. In this book, the author explains why American business became so enchanted by debt; how KKR partners Jerome Kohlberg, Henry
Kravis and George Roberts became billionaires, and how their takeovers affected America's economic strength. This fascination, behind-the-scenes
account shows how pride, jealousy, fear, and ambition fueled Wall Street's debt mania -- with consequences that affected millions
of people. Investors and businesspersons alike will find this expose engrossing and informative reading. This book was selected as
one of the Best Business Books of 1992 by Business Week.
Referring to an earlier version:
For more than a decade, Henry Kravis and George Roberts have been archetypes, first of Wall Street's boom years and then of its
excesses. Their story and that of their firm--the biggest, most successful, and most controversial participant in the age of leverage--illuminates
an entire era of financial maneuvering and speculative mania. Kravis and Roberts wrote their way into the history books by concocting
one giant takeover after another. Their technique: the leveraged buyout, an audacious way to acquire a company with borrowed money,
borrowed management--and a lot of nerve. Their firm, Kohlberg Kravis Roberts & Co., dominated the Wall Street scene in the late 1980s,
acquiring one Fortune 500 company after another, including Safeway, Duracell, Motel 6, and RJR Nabisco. Merchants of Debt draws on
more than 200 interviews, including recurring access to the central figures and their KKR associates, as well as court documents
and private correspondence to couch giant financial issues in human terms. The story of KKR shows how pride, jealousy, fear, and
ambition fueled Wall Street's debt mania--with consequences that affected hundreds of thousands of people. Anders addresses three
questions: Why did American business become so enchanted by debt in the 1980s? How exactly did Kravis and Roberts rise to the top
of the heap? What have buyouts, especially KKR's deals, done to America's economic strength? Here is a gripping saga that takes readers
behind closed boardroom doors to show how star-struck young bankers, ruthless deal-makers, and nervous CEOs changed one another's
lives--and the whole American economy--over a fifteen-year span.
Thayer Watkins' Summary of Merchants of Debt:
Available here.
From Turnarounds and Workouts, February 15, 2003 Review by Gail Owens Hoelscher
"For the first fourteen years of KKR's existence, the buyout firm's hallmark could be expressed in one word: debt… As KKR grew
evermore powerful, Kravis and Roberts derived their economic clout from a single fact: They could borrow more money, faster, than
anyone else," according to the chronicler of this high-flying firm. KKR acquired $60 billion worth of companies in wildly different
industries in the 1980s: Safeway Stores, Duracell, Motel 6, Stop & Shop, Avis, Tropicana, and Playtex. They made piles of money by
deducting interest expenditures from their taxes, cutting costs in their new companies and riding a long-running bull market.
The juggernaut of Kohlberg Kravis Roberts & Co. began rolling in 1976 when Jerome Kohlberg and cousins Henry Kravis and George
Roberts left Bear, Stearns with about $120,000 to spend. The three wunderkind shortly invented and dominated the leveraged buyout
as they sought investors and borrowed money to acquire Fortune 500 companies in dizzying succession. They put up very little money
of their own funds, but their partnerships made out like bandits. Consider the case of Owens-Illinois: KKR pup up only 4.7 percent
of the purchase price. The company's chairman earned $10 million within a few years, the takeover advisors got $60 million, Owens-Illinois
was left "gaunt and scaled back," and about five years later, KKR took it public at $11 a share, more than twice what the KKR partnership
had paid for it.
In this reprint of his 1992 books, George Anders tells us how they worked: "(t)ime after time, the KKR men presented a tempting
offer. The CEO could cash out his company's existing shareholders by agreeing to sell the company to a new group that would be headed
by KKR, but would include a lot of room for existing management. The new ownership group would take on a lot of debt, but aim to
pay it off quickly. If this buyout worked out as planned, the KKR men hinted, the new owners could earn five times their money over
the next five years. Presented with such a choice in the frenzied takeover climate of the 1980s, manages and corporate directors
again and again said yes… To top management a leveraged buyout was the most palatable way to ride out the merger-and-acquisition
craze."
The author includes a detailed appendix of KKR's 38 buyouts during the period 1977-1992 that presents the following on each purchase:
price paid by KKR; percentage of the purchase price paid by KKR's equity funds; length of time KKR owned the company; financial payoff
for the ownership group; and the annualized profit rate for investors over the life of the buyout. KKR used less than 9 percent of
its own funds in 18 of the 38 cases. In only four cases did KKR put up more than 30 percent of the price. KKR owned the 38 companies
for an average of about 5 years. As Anders puts it, "(a)s quickly as the KKR men had roared into a company's life, they roared off."
This behind-the-scene account shows the ambition, pride, envy and fear that characterized the debt mania largely engineered by
KKR, a mania that put millions out of work and made a very few very rich. This book is a must read in understanding what happened
to corporate America in the 1980s.
George Anders is the West Coast bureau chief of Fast Company magazine. He worked for two decades at the Wall Street Journal, and
was part of a seven-person reporting team that won the Pulitzer Prize for national reporting in 1997.
In Merchants of Debt: KKR and the Mortgaging of American Business, George Anders of The Wall Street Journal explores not just
Kohlberg Kravis Roberts & Co. but also the impact of the leveraged buyout deals it popularized. Reviewer Anthony Bianco found the
book well-researched, fair-minded, and thorough in its history of transactions.
Discussing the $26.4 billion buyout of RJR Nabisco Inc., ``Anders goes beyond what has been previously published,'' Bianco wrote,
with his convincing assertion that RJR's post-deal crises pushed KKR close to ruin. Leveraged buyouts in general Anders terms ``one
of the most profoundly undemocratic ventures the United States had ever seen.'' Their only lasting impact, he says, was to
shift wealth from the mass of corporate employees to a managerial elite allied with Wall Street.
Bianco faulted Anders for shying from sharp judgments and for failing to delve deeply into the motivations and character of KKR's
dealmakers. But Anders won unparalleled access to Henry Kravis and his cousin and partner, George Roberts, Bianco noted. Crediting
Anders with ``devastating reportage,'' Bianco said, ``His exhaustively researched book provides the closest look yet at KKR's inner
workings.''
With borrowed money, borrowed management, and great nerve, Kohlberg Kravis Roberts acquired one Fortune 500 company after another--and
changed the face of American business. Excerpted in the Wall Street Journal.
From New York Times Book Review, June 14, 1992
"[S]omething refreshing and important: a book that reckons seriously with Wall Street's innovations and achievements, even as
it chronicles its recklessness and intrigues... [A] far more enduring contribution to understanding one of the most dynamic and disturbing
periods in American business history."
From Michael Lewis, Author of Liar's Poker and The New Thing
"Excellent... One of the few books that a person can use to evaluate what happened in the financial 1980s. It should be required
reading for anyone who got rich, lost a job or watched in consternation as Wall Street's juggernaut swept the U.S. economy."
From Library Journal, June 14, 1992
Kohlberg Kravis Roberts & Co. (KKR) was founded in New York in 1976 by three . . . investment bankers, Jerry Kohlberg, George
Kravis, and George Roberts, with the simple purpose of assisting companies to participate in management-led buyouts or leveraged
buyouts (LBOs). . . . {The author} chronicles the rise of KKR during the 1980s, the 'age of debt,' and . . . {argues that} a simple
formula using borrowed money could be successfully repeated over and over again in corporate takeovers.
This compelling book is recommended for all business collections
In my humble opinion, the instability of financial trading markets all over the world exemplifies the fact that free market
behavior is not always rational behavior. Although right-wing liberal economic types like to portray packs of investors as
some sort of "hive mind", judging the value of stock in real-time and acting accordingly, investor behaviour is typically more instinctive
and random than that. People might sell their stock in Telstra, for example, because they want to go on a holiday. If enough Telstra
shareholders want to go on a holiday at the same time, the value of Telstra shares will drop if the numbers of sellers outweighs
the numbers of interested buyers. It's a pretty dumb example but it holds true. What does such a decision have to do with the actual
value of Telstra? SFA, but markets are blind to that, and market analysts will try to rationalise the stock price movement in any
remotely credible way that they can.
And what prompted this anti-market spray? The Australian stock market
had $21 billion
wiped off it yesterday in the biggest single-day loss since the week of the 9/11 attacks. The purported reason for the loss hardly
justifies the reaction:
Local traders were anxious after a plunge on Wall Street, which was sparked by a US Federal Reserve warning that interest rates
were likely to rise and energy prices were driving inflation higher.
Anything that can devalue Australian companies by $21 billion in a single day sounds more like a corporate disaster than anything
else. It's barmy. Put simply, the global marketplace could do without the ridiculous volatility that often ensues in financial markets.
Sometimes it seems as though investors might do well to just go and put their surplus capital on red at the roulette table at
Star City instead of pumping it into the stockmarket. At least there is
a sense of immediate certainty about that sort of transaction. I'm not seriously advocating gambling as much as trying to make a
point here, but gambled monies are at the very least not subject to the often inscrutable and senseless whims of shareholders across
the country.
Unsurprisingly, given market volatility and the sense that one is gambling, not investing, when buying shares, critical theorist
Susan Strange once labelled the instability of modern financial markets
"casino capitalism". Make no mistake, investing in
financial markets these days is in many ways closer to being a form of gambling than buying property, or putting your money in the
bank.
Posted by Guy at October 6, 2005 07:44 AM
Comments
This is just the usual October correction. Its a good thing, because it allows investors to get some bargins before the market
climbs up again. We just came off a new high, it may look like a crash but the market is still very healthy. This dip is predicted
to last only a month or two, or even only a few weeks.
You have obviously never invested in the stock market. For a long-term investor it is nothing like a casino. If a stock price
goes down that is a paper loss, you do not actually loose money unless you sell the stock.
To a wise investor an event like this is an opportunity. As Nic said, this is a chance to get bargains before the market goes
up again.
The market can be irrational. But the great thing about the stock market is you can control your risk. You could invest in bank
shares, this way you'd get a relatively stable stock that pays a good dividend. Or you could invest in a speculative stock that might
go up exponentially or vanish altogether.
A smart investor has a broad portfolio of stocks across different market sectors. That way you spread your risk and don't suffer
when the market goes haywire.
Posted by:
Chris Fryer
at October 7, 2005 12:04 PM
Posted by:
Chris Fryer
at October 7, 2005 12:06 PM
"A smart investor has a broad portfolio of stocks across different market sectors. That way you spread your risk and don't
suffer when the market goes haywire."
So it's a bit like betting on a few favourites and a few long-shots at the horsetrack, right? ;) I know some gamblers who
don't think that they've lost money until they've left the gambling establishment of their choice for the day. Until then, it's just
$50 up or $50 down, and the betting continues.
I guess the point I am trying to make is that $21 billion was wiped off the supposed value of companies in a single day, and hardly
anything at all changed in a material sense.
It's like if banks decided to randomly revalue the money sitting in your savings account on a real-time basis. On a whim, a significant
proportion of your savings could disappear, without anything particularly tangible or real justifying that reduction in value.
The October correctio, as I understand it, is literally a correction - meaning those companies have been over valued in the last
year or so, and that is being rectified. As the correction results in a bid, investors and traders panic and sell like mad, and the
market dips further before levelling off and climbing again.
Theres relaly nothing to see here, but the media is beating it up something chronic.
"CASINO CAPITALISM" AND THE RISE OF THE "COMMERCIALISED" SERVICE CLASS -- AN EXAMINATION OF THE ACCOUNTANT
Institue for the Study of the Legal Profession, Law Faculty, University of Sheffield, Crookesmoor Building, Conduit Road, Sheffield,
U.K., S10 1FL
Received 24 February 1994; revised 1 May 1995; accepted 1 May 1995. ; Available online 24 April 2002.
The central contention of this paper is that a new paradigm is emerging within the area of professional or expert labour. This
process entails a shift from a "social service" evaluation mechanism to a "commercialised" mechanism.
This change is but one element in a wider range of alterations entailed in the change from a Fordist regime of accumulation
to a Flexible Accumulation regime.
The paper examines these issues with regard to the chartered accountancy profession. It analyses the socialisation processes experienced
by accountants and the evaluation criteria involved in the promotional process to partnership. The evidence for this paper was gathered
from qualitative and quantitative research undertaken in the Big Six accountancy practices in Ireland and the USA.
Drawing inspiration from the theses of the regulation school, Gerard Hanlon analyses the socialisation process in the "big six".
For accountants are, according to him, the new "controllers" of "a process of flexible accumulation", one that goes hand in
hand with a heightened international division of labour. Unfortunately, his research site remains too limited to confirm - or disconfirm
- his ambitious hypotheses.
Moreover, the transposition of neo-marxist theories leads him to underestimate the whole work of construction of social credibility
of accounting knowledge, as well as the complex play of interaction-and not only of opposition-between these "multinational service
conglomerates" and the local or national dignitaries who continue to represent the core of the field of practice.
My objective in this article is to discuss certain elements of the leveraged buyout (LBO), sometimes referred to as taking
a corporation private. In this practice, the company's management and other private investors buy out (hence "buyout") all the other
shareholders, almost entirely with borrowed funds (hence "leveraged").
I am mindful, however, of the sage journalistic advice that suggests that the writer should capture the interest of the readers
very early on by establishing the essentiality of the topic, its impact, or, at the very least, sharing provocative examples that
highlight its salience. In no particular order, try these:
Related Results: bribing management in taking private
A recent special report by Fortune (1989) educates us with regard to "How Ross Johnson Blew the Buyout." F. Ross Johnson, of course,
was the CEO of RJR Nabisco who put his company into play by proposing to take it private via the leveraged buyout. Among other things,
it has been suggested that his bid (initially $75 per share, ultimately $109 by Kohlberg, Kravis, and Roberts [KKR]) was preposterously
low. The compensation package for Johnson and a few (very few) managerial colleagues was judged by most observers to be outrageously
high. Beyond that, certain of Johnson's strategies (for lack of a better word) led to a fair amount of enmity between himself
and the special committee of outside directors enchartered to decide the final fate and ultimate ownership of RJR.
There is apparently some substance to these reports. At a minimum, there is an unusual amount of consistency among many observers
that the RJR leveraged buyout did illustrate some excesses that can be associated with such a play. Perhaps, but permit me a quibble.
If we rely on these reports in their entirety, we might be led to believe that F. Ross Johnson lost. He lost his job, presumably
one of great status and reward, as the CEO of a Fortune 500 company. He lost to KKR, for it is KKR who now own and operate RJR. He
may have lost some reputation. The word "greed" crops up repeatedly in some descriptions of this LBO.Beyond
that, his professional competence has been questioned. It has been alleged, for example, that he was totally outmaneuvered by KKR.
Taken in the aggregate, a grim picture and humiliating loss.
Maybe. Maybe not. We may want to consider one other factor before we decide whether or not Mr. Johnson "lost." It turns out that
Mr. Johnson set another record of sorts with his departure from RJR -- the largest golden parachute in history. A recent Business
Week (1989) reports that F. Ross Johnson, former CEO of RJR, walked away from this embarrassing loss with "separation pay" of more
than $53 million.
I will be among the very first to concede that wealth, as well as winning or losing, is in the proverbial eye of the beholder.
I must say, however, that I find it difficult to brand anyone a "loser" who after the fray walks away with $53.8 million. That
really does sound like a safe landing. Mr. Johnson deliberately put the company in play; nearly all observers feel that he
lost. Even so, it has to be reported that the consolation prize in this tournament is most impressive.
A Bribe?
Rand V. Araskog, Chairperson of ITT Corporation, has recently written a book, The ITT Wars: A CEO Speaks Out on Takeovers. Araskog
reports that in 1983, Jay Pritzker and Philip Anschutz were interested in gaining control of ITT through a leveraged buyout. The
actual financial details are of little consequence here. Suffice it to say that the "deal" would have involved several transactions.
Among other things, ITT's senior management would be given a 10 percent stake in the new company. This stake would have garnered
Araskog some $30 million or so. Araskog explains in this book that he perceived this $30 million windfall to be little more
than a gargantuan bribe.
Just A Family Affair
Richard P. Simmons took a specialty steel unit of what is now Allegheny International private in 1980. To his credit, this company
has done very well. Two years ago, this same company was once again taken public. Stock was sold and has also done well.
CEO Simmons requested that the board of directors approve an investment of corporate money into a LBO fund. There is nothing manifestly
wrong with that. LBO funds are designed to allow companies (like KKR) to raise money to take companies private. Obviously, one invests
in such a fund in the hope that these ventures will be profitable and provide an attractive return on the investment. Mr. Simmons
evidently believed that corporate funds invested in such a vehicle was a prudent use of these assets.
So far, so good. This LBO fund has three general partners. The problem is that one of these three partners is Brian Simmons,
the son of Richard P. Simmons, CEO of Allegheny Ludlum.
THE LBO AND ETHICS
That there may be some potential for ethical issues to arise in LBO transactions will come as no surprise to anyone. Certainly,
I do not presume to suggest that the prior examples are representative of all LBO transactions. Indeed, I fervently hope that only
a modest few would have the character of those cited. Still, since 1981 (the LBO was relatively infrequent prior to that) more than
1,550 public companies have gone private, nearly as many as are listed on the New York Stock Exchange. I will argue that there are
a number of factors common to every one of these LBO transactions that are most troubling. In fact, they raise the issue of whether
current management of any publicly traded company should be party to an LBO. These issues include, but are not limited to:
An Obvious Conflict of Interest
What is the Incentive for an LBO?
The Ultimate in Inside Information
The Quality of Privileged Information
Full Disclosure
Life After the LBO
The Final Irony: Going Public Again
An Obvious Conflict of Interest
The CEO of a publicly traded corporation has a fiduciary responsibility to shareholders. This responsibility is rather simply
described: It requires that the interests of the stockholder be considered prior to, ahead of, and superior to the self-interest
of the manager at all times and in all circumstances. Clearly, that sets an omnibus and challenging standard.
Obviously, it is in the interest of the shareholders to have the value of their common stock at as high a level as possible. This
is particularly evident when the stockholder may have some immediate interest in selling the stock. Just as obviously, it is in the
interests of the potential buyer of the stock to have the price set somewhat lower. Most of us would be inclined to purchase stock
when we believe that the stock is undervalued, when we think we are getting a "good buy." The value of this stock is going to increase.
Accordingly, we'll buy some of it at its currently undervalued price.
More specifically for these purposes, CEOs as managers should seek to place as high a value as possible on the common stock of
the corporation. CEOs, as rational individuals, who are acting in their capacity as principals in an LBO, can have no such
incentive. On the contrary, it is in their obvious interests to have the common stock valued somewhat lower.
What Is The Incentive For An LBO?
Why would any manager be interested in being involved in a LBO? Maybe, in one of the great
understatements in recent memory, they believe there may be a few dollars in it. Maybe, more benignly, they believe that the company
could be run a bit more efficiently. Suppose that an officer (or group of officers) of the corporation believes that certain assets
could be redeployed, divisions divested, products launched, and so forth. Is there not a mature argument that these individuals are
legally, as well as ethically, bound to identify and execute these strategies for the benefit of the stockholders?
It would seem that there are any number of dynamics that underscore such concerns. One, when is the last time that the board of
directors accepted the first offer and conditions when a management group proposed a buyout? On the contrary, it is commonplace that
the board finds the first offer to be insufficient (the RJR event is a classic case, among hundreds of others). In other words,
the management group typically provides a low-ball offer, much the same that you might do when making an offer on a new home. The
obvious difference in that you do not have a fiduciary responsibility to the seller of the home.
It is also considered to be textbook procedure for the board of directors to immediately market the corporation to all suitors
when faced with a LBO offer. The object of this is to invite "competition," to be certain that a "fair" price is put on the assets
and so forth. What do you suppose this exercise is all about? Is it possible that there are some folks who are not altogether confident
that the current management would act in the absolute best interests of their constituency short of these strategies?
Moreover, it is considered de rigueur to appoint a group of outside directors (because they are purportedly independent, a questionable
assumption) to review and make the final recommendation concerning the management proposal. Why do we do this? Do we do it because
we can count on the LBO group to provide us with a "fair" price from the onset?
Also, it is typical to solicit the opinion of investment banks to determine the "fair market" price of such a transaction. Once
again, why is this necessary? Do we not trust the very managers who serve as fiduciaries of the shareholders? There must be some
doubt in someone's mind.
We can all agree that some notion of the "fair price" of the company should be set. What is less clear is that the management
involved in the bid should set it. Moreover, it is not as though this number can be independently and easily arrived at to the satisfaction
of all observers. On the contrary, in one bidding war for Stokely Van Camp, three different investment advisors provided an opinion,
sometimes referred to as a fairness letter, to three prospective buyers, all at different values ranging from a low of $50 to a high
of $75 per share. If it is true that this "true value" is apparently subject to some debate, many would be quite disturbed if individuals
with rather substantial self-interests are serious parties to establishing the price.
The Ultimate in Inside Information
The most cursory examination of the leading business and financial periodicals over the past several years would suggest some near
crisis regarding inside information. Fundamentally, it is a violation of federal securities law for insiders (for example, company
officers, members of the board) to profit from any transaction inspired by certain knowledge not available to stockholders generally.
Suppose, for example, that a CEO knew that on Tuesday he would report the lowest dividend in the company's history. When this information
is public, it would probably result in at least a short-term reduction in the value of the company's common stock. This CEO could
not, then, legally sell shares in his company short on Monday. In short selling, of course, you hope that the price of the stock
will fall.
The CEO has made a good bet, too good. He is almost certain that the price will fall. The problem is he knows that because
he is privy to information not generally available to others. Under SEC rule 10b-5, he cannot act in this manner: It is patently
illegal. If prosecuted, he would at a minimum forfeit any and all profits derived as a function of this transaction. Beyond that,
he would be subject to criminal penalties as well.
If trading on inside information for a few thousand shares (one share, for that matter) is in violation of federal securities
law, then how can the LBO be conducted in anything resembling good faith? Who on the planet has more pertinent information about
the strengths, weaknesses, threats, and opportunities facing an organization that its management?
More directly, if it is illegal to profit on the basis of "inside" information with just a few shares of the company's stock, how
can we profit on the basis of the ultimate stock purchase, the company in its entirety? Frankly, I find it incredible that the standing
management of a company does not have access to information available neither to its stockholders nor, most certainly, to the public
at large.
The Quality of Privileged Information
One of the chief arguments often used in defense of the LBO is that there is no monopoly of the right to offer to buy. It is true
that management-led groups, or groups with substantive management interests, can propose an LBO. It is also argued that excesses
in this area are unlikely. Suppose, for example, that the management-involved group makes an offer below a reasonable estimate of
the market value for a company. It is only reasonable to expect that some other suitor would enter the bidding, provide a more responsible
bid and carry the day. In fact, it has been suggested:
Once anyone initiates an LBO, the directors should put the company up for auction. And they should make sure that all serious
bidders have access to all the information needed to make an offer (Business Week December 1988, p. 30).
It seems that there are two pertinent issues here. One concerns whether it is indeed possible for any other bidder to have
the quality of information available to it that is enjoyed by the management-involved team. Once again, who could possibly
have the wealth of information available to the current management team? It is hard to contemplate a scenario wherein the management
team would not have a substantive edge with regard to the quality of information.
Beyond that, however, we may face an interesting catch-22. As the prior quote indicates, it is sensible to put the company to auction
(presumably to encourage some competition and a check on the reasonableness of the management offer) and provide access to all the
information needed to make the offer (possibly to reduce the management information edge.) Surely, much of the information that would
be "needed to make an [informed?] offer" would be proprietary. Before suitors could make an informed bid, wouldn't they need information
regarding state of development of new products, pending lawsuits and settlements, illness of key executives, and so forth? After
all, the current executives are privy to this information.
It is not immediately clear that the interests of the stockholders are
met by divulging this information to "outsiders" irrespective of the LBO. Would such information be considered "inside information"
by SEC standards? Would the bidding companies, then, be constrained from relying on this information for purposes of profit? I think
that there is an excellent argument that such companies would be so constrained. If, however, it would be illegal for such a company
to profit by such information, how could we allow the current officers of the corporation to profit by the same information?
Full Disclosure
Management-involved groups cannot take a publicly traded company private at their own initiative. Among
other things, they will need the "permission" of the shareholders. Naturally, this is accomplished through the proxy process. Benjamin
Stein, a lawyer and economist, has raised a fascinating question regarding this issue. Essentially, the proxy material to a stockholder
must include full disclosure of any material fact involving the action. In theory, the stockholder reads the proxy material, becomes
acquainted with the major aspects of it, and votes either to approve the LBO or otherwise. The Supreme Court has ruled that there
must be such full disclosure of any fact "if there is a substantial likelihood that a reasonable stockholder would consider it important
in deciding how to vote."
This leads Mr. Stein to a persuasive point:
But insiders never disclose the crucial fact that they plan to make vastly more from the corporate assets than they pay the stockholders
for them. I am a stockholder in a few companies in a small way, and I hope I am reasonable. I consider it extremely important if
management plans to make $50 from something it paid me $1 for, and it would assuredly make a difference in how I voted (Stein 1985,
p. 170).
Why would CEOs and other highranking officers of prestigious firms risk their security and their reputations if the opportunity
for reward was not correspondingly great? Do you think that such information should be disclosed to the stockholders to better inform
their vote?
Let's assume that by whatever means the LBO has been approved. What now? The period after the LBO raises even more troubling issues.
Life After the LBO
Not all LBOs are successful, as Revco and Freuhauf could attest. Even so, it has recently been recently reported that the profit
margins for LBO companies were 40 percent higher than their industries' median two years after the buyout. It would seem reasonable,
then, to conclude that many of these LBOs do very well. As might be expected, there has been some speculation about why this might
be the case.
Consider this. Tadd Seitz ran a profitable division of ITT. This company was divested in an LBO by ITT in 1986. Mr. Seitz continued
to run the new company. According to some, when under the control of ITT, is overhead was too high, inventories too large, and management
a bit relaxed with respect to wooing new clientele. These, and other "problems" were addressed and the company has prospered. That,
however, is not the issue. The better question is why wait until the company was private to make these rather elementary moves.
Why were these strategies not employed for the benefit of the initial shareholders?
This is by no means an uncommon scenario. Time after time LBO companies divest poorly performing subunits, drastically reduce
administrative overhead, pare the workforce, renegotiate contracts, and moderate executive perquisites (for example, executive jets,
first class accommodations), among a host of other initiatives. E. E. Bergsman of McKinsey & Co. adds some interesting perspective
to this: "These LBOs are so immensely successful because they are better managed" (Business Week June 1988).
Notes
1. Reported by Thomas L. Friedman, The Lexus and the Olive Tree (New York: Farrar Staus Giroux, 1999)
p.101.
2. John B. Cobb, Jr., (ed), (Claremont, CA: Mobilization for the Human Family, 2000)
3. Karl Polanyi, The Great Transformation. The Political and Economic Origins of Our Time (Boston: Beacon
Press, 1957/1944)
4. Denys Hay (ed), The Age of the Renaissance (New York: McGraw-Hill, 1967) p.22.
5. Heikki Patomaki, Democratising Globalization (London: Zed Books, 2001) p.40.
6. Peter Garber, Famous First Bubbles: The Fundamentals of Early Manias (Cambridge, MA: MIT Press, 2000).
The quotation is from Charles Mackay, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds (London: Bentley, 1841) p.142.
7. For a summary of the vast literature on pre-World War I foreign lending, see Albert Fishlow, "Lessons
from the Past: Capital Markets in the 19th Century and the Interwar Period," in M. Kahler (ed), The Politics of International
Debt (Ithaca: Cornell, 1985).
12. John Kenneth Galbraith, The Great Crash, 1929 (Boston: Houghton Mifflin, 1954), p.16.
13. For a helpful summary of the British and American plans at Bretton Woods, see Raymond F. Mikesell,
The Bretton Woods Debates: A Memoir (Princeton: IFC Essays in International Finance no.192, 1994)
14. Jacques J. Polak, The Changing Nature of IMF Conditionality (Princeton: IFS Essays in International
Finance, no. 184, 1991.
15. Robert Triffin, Gold and the Dollar Crisis (New Haven: Yale University Press, 1961.
16. The IET taxed foreign borrowings in the U.S. with the intention of reducing the acquisition of
dollars by foreigners; the U.S. government thought the dollar "overhang" was getting too large.
17. This section draws upon Heikki Patomaki, Democratizing Globalization: The Leverage of the Tobin
Tax, (New York: Zed Books, 2001), chap. 2.
18. The prices a company charges itself for goods or services purchased from one of its entities and
sold by another. Multinational corporations with business operations in many different countries try to charge prices that minimize
their overall tax liabilities.
19. Roughly, a consensus between the U.S. Treasury, the IMF, the World Bank, and the business community
about the policies most likely to achieve free trade and rapid growth: fiscal austerity, privatization, deregulation, and free movement
of financial capital.
20. International Organization of Securities Commissions, the Joint Forum on Financial Conglomerates,
the International Swaps and Derivatives Association, and the Institute of International Finance..
21. See, for example, Amartya Sen, Development as Freedom. (New York: Alfred A. Knopf, 1999); Lance
Taylor (ed), External Liberalization, Economic Performance and Social Policy.(New York: Oxford University Press, 2000); Dani Rodrik,
The New Global Economy and the Developing Countries: Making Openness Work. (Washington: Overseas Development Council, 1999); Enrique
Ganuza, Lance Taylor, and Rob Vos (eds), Economic Liberalization and Income Distribution in Latin America and the Caribbean. (New York:
United Nations Development Programme, 2000).
22. United Nations Development Programme, Human Development Report. New York: Oxford University Press,
2000.
23. David Felix, "Asia and the Crisis of Financial Globalization," in Dean Baker et al., (eds) Globalization
and Progressive Economic Policy (Cambridge, U.K: Cambridge University Press, 1998) pp.163-91.
24. Jeffrey D. Sachs, "Alternative Approaches to Financial Crises in Emerging Markets," in Miles Kahler
(ed), Capital Flows and Financial Crises (Ithaca, N.Y: Cornell University Press, 1998)
25. The Mystery of Capital, (New York: Basic Books, 2000) p.207.
26. "The Revival of the Liberal Creed: the IMF, the World Bank, and Inequality in a Globalized Economy,"
in Dean Baker op cit., pp. 37-63.
27. See his Underwriting Democracy (New York: The Free Press, 1991), part 3, and his On Globalization
(New York: Public Affairs, 2002) ch. 4.
28. For additional details, see K. S. Jomo (ed), Malaysian Eclipse: Economic Crisis and Recovery, (New
York: Zed Books, 2001)
29. For more information, see Kavaljit Singh, Taming Global Financial Flows New York: Zed Books, 2000)
pp. 158-78. See also Carmen & Vincent Reinhart, "Some Lessons for Policy Makers Who Deal with the Mixed Blessing of Capital Inflows,"
Miles Kahler (ed), Capital Flows and Financial Crises (Ithaca: Cornell, 1998) pp. 93-124.
30. Given in 1972 at Princeton University and published subsequently as "A Proposal for International
Monetary Reform," Eastern Economic Journal 4 (July-October, 1978) pp 153-9.
31. Mahbub ul Haq et al (eds), The Tobin Tax: Coping with Financial Volatility (New York: Oxford University
Press, 1996) passim.
32. Jeffrey Sachs, "Alternative Approaches to Financial Crises in Emerging Markets," in Kahler, op.
cit., pp. 256-59.
33. George Soros, On Globalization, op cit, ch. 4.
Published in: Casino capitalism? Insider trading in Australia
/ R Tomasic
Canberra : Australian Institute of Criminology, 1991
ISBN 0 642 15877 0
(Australian studies in law, crime and justice series) ; pp 69-78
You can succeed by relying on fundamentals but inside information beats fundamentals.
(A Sydney broker)
The reasons for the apparent proliferation of insider trading both in Australia and overseas are manifold. The recent rash of
insider trading activity is often attributed to the level of greed which is said to drive the securities industry. This factor should
not be discounted, but it is clear that other factors are also at work not the least of which has been the unprecedented range of
opportunities for insider trading in recent years. The relationship between crime and opportunity is well established within the
criminological literature but little has been written about how this relationship arises in the context of insider trading, a crime
theoretically punishable theoretically until recently by five years gaol and/or a $20,000 fine in the case of individuals and a fine
of $50,000 in the case of corporations.
Likely insider trading situations
Almost exclusively, brokers said that insider trading would take place in the market for shares and not in the options market.
The range of opinions about the types of shares involved was very wide. On one view, it would depend on "what was flavour of the
month". The most commonly identified risk groups were mining, speculative, exploration and gold shares. Various explanations were
put forward as to why mining stocks attract insider trading. One broker said that insider trading is most likely to occur in this
broad area because "there are all sorts of people on the site". Other reasons were that this is "where there are things like drilling
reports" and "a leak from a geologist could create insider trading". Also, "drillers and assayers know and word filters through".
As the mining boom of the late 1960s and early 1970s showed, there is ample scope for mine site workers to insider trade or to act
as agents for brokers and others in transmitting the latest data.
Among the less specific opinions was one that insider trading is more likely in new, up and coming super stocks which involve
newer players". It was said to occur "in less professional areas where there are more opportunistic stocks". A Melbourne broker said
that it is more likely in relation to "smaller less frequently researched stocks, rather than larger [company securities]". An obvious
point often referred to is that for insider trading to be successful, it is necessary to move the price and in this respect gold
mining stocks were described as the most reactive to any information. Where the companies have lower capitalisation insider trading
will have greater effect on prices and it is easier to move prices of these stocks. Shares in entrepreneurial mining companies, described
as Western Australian cowboy companies, and perhaps in high technology companies, are said to be tightly capitalised and likely to
move quickly on a rumour. The number of people in a company was also said to be a factor as "insider trading tends to occur more
in smaller companies controlled by one or two people" or in second board stock "which is more tightly held by a small group of people".
There was no consensus amongst brokers about whether insider trading is more or less likely in second board stock. But despite
their differences on this point most brokers shared an uncomplimentary opinion of second board companies. However, the financial
advisers agreed uniformly that the area of the market where insider trading is most likely to occur seems to be in the lower quality
stocks, such as the speculative, mining and second board stocks. An interesting observation was that originally insider trading was
limited to tightly held stock, but in the last two years vast amounts of money have been available and this leads to more insider
trading. Cross directorships, trading on rumours, stocks that respond to good news, and stocks whom players are share trading to
enlarge their business profits, were seen as situations which led to insider trading. There was no common view among Stock Exchange
officials on this matter.
The general view among the market observers was that insider trading is more likely to happen in lower quality stock. One observation
was that insider trading occurs across the whole spectrum but another was that "it is less likely in trading bank stock. It happens
on a bulk scale in speculative stock. The second board is an invitation to misbehaviour". A journalist said that "insider trading
occurs even in reputable companies and share dividend schemes using options are the likely methods". The views about the second board
were as conflicting here as they were amongst other groups. On the one hand "the second board is not deep enough", and on the other,
"insider trading occurs in the second board, but not exclusively".
It was rare to find lawyers saying that insider trading was likely to be found in industrial or blue chip securities. The nearest
exceptions to this occurred when they were speaking of takeover stocks generally, although it seemed likely that "insider trading
will occur in relation to anything which is volatile". Generally, the lawyers considered that insider trading would be most likely
to occur in relation to speculative, volatile, mining, second board, or lower quality securities, or in respect of securities in
smaller companies where there was a high level of ownership by a relatively small number of shareholders. To this extent, their expectations
were similar to those of the brokers. The regulatory community saw speculative, mining, takeover, high technology and low price/high
volume stock as the most likely areas. Gold stocks in particular were often identified. Many of the regulators took the view that
insider trading was prevalent "over the whole range of market activity".
It seems likely that insider trading occurs throughout the whole of the Australian securities market, but it is more likely to
occur in certain specific areas than in others. The market's evaluation of particular classes of securities, such as mining and exploration
stock during the late 1960s mining boom, and high technology and takeover stocks in the early 1980s, gave rise to insider trading
which suggests strongly that insider trading is often a matter of opportunity. The extent of insider trading can also be influenced
by the volatility of the stock in question and the degree to which the ownership of securities is tightly held amongst a relatively
narrow group of shareholders. This is not to suggest that insider trading does not occur in relation to the "blue chip" securities
of large public companies, but it is more likely to be successful in moving market prices in lower quality stocks. The likelihood
of insider trading occurring in large Australian public companies should not be discounted, especially in takeover situations.
Opportunities for insider trading
Insider Trading has been described as an opportunistic crime. It is carried out when an opportunity presents itself and by persons
who take advantage of the opportunity. The difficulties of quantifying the extent of insider trading and perhaps in detecting it,
might be due to the opportunistic and random nature of the practice. It was therefore of particular interest to find out what opportunities
existed for insider trading. The first questions on this topic asked interviewees about the frequency of conflicts of interest arising
from access to price sensitive information. The brokers reported that conflicts of interest were a constant factor in the industry
or, at least, that they were very common. They were said to arise especially when a broker is engaged in corporate advisory work.
It was claimed that these conflicts were usually resolved properly. In the context of conflicts it is useful to refer to comments
with respect to the treatment of information gathered in the course of research, especially information provided to brokers by listed
companies. A Melbourne broker explained that in his firm, "any research undertaken by the firm goes back to the company first". The
same practice is followed by another Melbourne firm where "the research information is kept secret until it is checked with the company
and then it is published".
It was of interest to establish whether there is any house trading by brokers on the information collected by them in the course
of research. Several brokers explained the position in their firms and at the same time described the process of gathering information.
A Sydney broker responded, "some companies refuse to see brokers; they rely on section 128 to avoid them. Others, with less market
status, are anxious to see them to build up the share price. Of those who talk, it is amazing what they say, but some companies do
not tell the truth. There is a great deal of monitoring of companies these days. Here, there is no house trading but some institutional
analysts are not prevented from trading". Another perspective on the practice was obtained from a senior broker who said that "market
research is done in the hope that it picks up price sensitive information. This is only ever done on a formal basis; it does not
disclose inside information. The information is ultimately used by the firm to disseminate to its clients. The firm does not trade
on this information but we will pass it on early to institutions. Trading on research information is common elsewhere, especially
in those stocks where a small amount could move the price".
Another explanation of how research information is dealt with was provided by a broker who responded that "research obtains price
sensitive information but how often is it inside? At presentations the companies should be more guarded. Information that is not
generally available to the public comes out. The information then goes to clients. In this firm advisers would not go out and buy
shares; the house would buy shares and disclose to clients that it is selling as a principal. It is more likely in small firms for
brokers to trade on research information". An enigmatic statement was that "companies are always giving information but it is not
insider trading. The research reports go to clients. Trading by the house before advising clients could go on but the information
could be wrong or your interpretation wrong. Profit forecasts do not affect prices much".
Another insight into industry practices came from a Sydney broker who asked, "how often is information from research price sensitive?"
He pointed out that "high level executives do not give much away" and asked, "is it inside information or smart analysis?" In his
firm, "there is no house trading on this information - it goes to the client first. It would be stupid to breach trust. Not many
brokers have the same degree of self-control. This firm is always aware of surveillance and the potential danger to its business".
Perhaps the frankest exposition of the treatment of information gathered from companies came from a broker who told us that he sees
companies "at least once a week and gets superior information. Some managements talk freely and you get price sensitive information
from them. With research information we either trade for the house or send it to institutions. We trade in big companies only if
it is inside information from leaks from banks or advisers. It will be a problem with screen trading. All companies try to bull the
price of their shares". When financial advisers were asked about the frequency of conflicts of interest, the overwhelming view was
that it was a common event. There was little comment about the way in which such conflicts were resolved but it was interesting to
note that the accountants made similar replies to the effect that, "professionals don't find it a problem". The merchant bankers
suggested that they can handle conflicts better than brokers.
The response to this question from the Stock Exchange officials suggested that they are not close enough to the daily workings
of the market to be able to comment accurately. On the subject of the use of research, one official felt able to tell us that "in
section 128 terms, brokers do engage in insider trading but some of the information could be found out by individuals". He admitted
having "some difficulty with the practice of trading first before passing on the information to clients. It is unwise and unethical".
From what the market observers reported, it seems that conflict of interest is ever present. When asked about the treatment of price
sensitive information gathered during market research, the answers provided were varied. One observer reported that he was "not able
to say how often price sensitive information is given out by companies". Another of the group was of the opinion that "brokers obtain
price sensitive information but it is not devastatingly inside information. They probably trade on it and then pass it on to the
client. Small investors are not treated as well. Some brokers are subsidiaries of the companies whose shares they are ramping". A
more emphatic response was that "research is used before it is made public". But even stronger was the explanation that "analysts
quite often get price sensitive information; boards tell them what they want to tell them; circulars are speculation, puffery, to
get the price up. Larger companies are better scrutinised and much cleaner in insider trading terms. I would not be surprised if
there is house trading nor if there was passing on to affiliates. This is consistent with the ethical standards in the broking world".
An authoritative explanation came from the ex-broker who reported that "talks with companies are directed at getting sensitive information.
A skilful broker will get it wittingly or unwittingly. Brokers do house trade on it. They buy shares to provide them to persons who
are acting on their recommendation".
The lawyers were able to appreciate the issue of conflicts better than other groups in the study. Their views were that conflicts
of interest are a particular problem for persons in company management who trade in shares. Brokers were also identified as a group
for whom conflict situations were common and several lawyers pointed out that brokers tend not to be able to manage such situations
well. While the regulators considered that conflicts were not likely to arise in CACS, they tended to the view that conflicts would
be common in the private sector for merchant bankers, advisers and within companies. One assessment was that "such conflict is probably
quite frequent, it depends on the opportunities which arise".
Insider trading and corporate control
A view is sometimes put that traders deliberately build up their holdings in order to obtain price sensitive information to assist
them in their trading. The almost universal view amongst brokers was that traders would not seek a place on the board solely as a
method of obtaining price sensitive information. The main reasons for such a view were that "it is an expensive way of doing it;
a long way for a quick trade" as one broker put it. Once on the board, "your hands are tied" said another broker. Those who did not
dismiss the possibility said that "it could happen" and that "it is not common but it certainly happens" or that it might happen
"in smaller companies".
The qualifications to some responses provide insights into the process of obtaining information. A Melbourne broker responded
that "boards do not necessarily know everything; the information flow is controlled by CEOs and accountants. It is not an efficient
way of obtaining information". A Sydney broker explained that "a lot of information is wrong. Banks get better information than brokers;
auditors get better information; lower level people get information probably before the directors do". The ease of obtaining price
sensitive information was referred to by one broker when he responded that "some brokers might take this approach but it is too expensive.
Non-brokers can obtain information and do research without going on to the board" Just how easy this was, was demonstrated by the
comment that "brokers can go to the company and get information".
This question also yielded some insights into how insider trading is conducted. A Sydney broker responded that "most is unplanned,
it depends on information falling into your lap". According to a Perth broker "it is easier to insider trade off the board [of directors]"
and according to another "it is sometimes better not to go on to the board". A Perth broker expressed the opinion that "going on
to the board does not give rise to an insider trading problem, it is more a long-term propositions.
Most of the financial advisers thought that it was not common to build up holdings in a company merely in an effort to obtain
access to price sensitive information. Going onto the board was either a very expensive way of obtaining information or a means of
achieving other goals such as the control of the company. The majority view of the ASX officials was that this does not happen, "[b]ut,
a person would be dumb not to use a position on the board or to ignore information".
The market observers had similar views to other groups. A wide range of views were provided by them. It was said to be "quite
common" or "routine", that "it happens in second board and lower main board companies" and that "it often occurs". A different view
was that "it is done mainly to get control and participate in the company". Another observer repeated the point that "it is a very
expensive way of doing it. The board is the last place to do it". One of them responded that "they don't really need to, they can
use contacts as Boesky did".
Some lawyers shared the view that "some people who have got on to major company boards have only paid lip service to insider trading
controls", but the more common view was that it would be a very expensive way of trying to obtain price sensitive information and
that "there are usually better ways of getting price sensitive information". The regulators likewise felt that getting onto the board
for this purpose would be rare because, as one regulator observed, "persons who insider trade can obtain the inside information without
being on the board". Once on the board, additional constraints upon the traders are seen to operate - "... once a person is on the
board he is an insider and the risks of being caught increase".
Is price sensitive information necessary for success?
For the most part, brokers believed that it was possible to succeed without access to price sensitive information and that success
comes from relying on fundamentals. A Sydney broker thought that "price sensitive information is just a help. It is not vital". Another
of his colleagues went so far as to say that "it is probably better not to rely on it". One surprising view was that "inside information
is not important at all" to success in the stock market. Price sensitive information was, however, generally seen as valuable, particularly
as fundamentals are of more long term importance. Price sensitive information is seen to be very important for making short term
profits but over the long haul, success is seen to be based on the fundamentals. Access to price sensitive information, but not necessarily
inside information, will enhance the prospects of success. For quick profits, it appears necessary to have access to price sensitive
information.
The almost unanimous view of the financial advisers was similar to that of the broke price sensitive information is not necessary
for success. Good research, astuteness, and relying on the fundamentals were mentioned as the factors for success. It was pointed
out by some that price sensitive information is not necessarily inside information and that if a person has access to such information
the chances of success are greater. Likewise, the most common view of the market observers was that success is possible without price
sensitive information and that the approach of relying on fundamentals was the best method for success. The view that price sensitive
information was not essential was also held by most of the lawyers.
The general view amongst Stock Exchange officials, predictably, was that success is possible without price sensitive information.
One view was that "you can succeed without it. The Stock Exchange runs not on facts but on fashion - there is always good value stock
that is ignored. Success does not depend on insider trading". The regulators' majority view was that it was possible to succeed without
access to price sensitive information, but some had serious qualifications and there were a good proportion who doubted the possibility
of success without it, especially in the long term.
Market conditions and insider trading
The overwhelming view within the broking group was that insider trading was more likely to occur during periods when the market
is very active in a bull market and when there are takeovers. Most brokers felt that takeovers were more likely to occur during bullish
market conditions. A bull market was said to be the most likely time for insider trading to occur because, "there is more activity"
and "more people are interested". A development of this theme was that in a bullish period, the level of activity means a lower chance
of detection. Special events, such as "during periods when there are takeovers and discoveries, special breakthroughs or sudden developments"
were seen as likely to contribute to the level of insider trading. A comment consistent with the majority view was that insider trading
"will occur in any market, but it can be pin-pointed more in a bear or drifting market".
The financial advisers said that active markets and periods during which takeovers and major reconstructions were taking place
were more likely to sustain insider trading. One fund manager thought that it was more likely to occur in "a bear market where assets
have been undervalued". A merchant banker summarised the conditions in which insider trading is likely to be found as follows: "in
a bull market, when there is good news, and in a bear market, when there is bad news". The Stock Exchange officials were once again
unable to express a single community view. "It is more likely in an illiquid market" said one. Another replied that "I cannot say
whether it would be a bull or bear market". Insider trading appears likely to be most prevalent during periods of heightened market
activity, such as ill a bull market, takeover situations and in situations where major discoveries or innovations were known to have
occurred. It was also evident however that insider trading could occur in a bear market, when there was bad news about to break.
The level of volatility in the market could also be important in encouraging persons to insider trade. Volatility in prices is a
critical factor in undertaking a successful insider trading operation.
Takeovers and insider trading
It has often been said, and other research tends to show, that there is a distinct relationship between takeover activity and
the level of insider trading. Participants in the study were asked whether they could think of takeovers where they suspected that
insider trading had taken place. Most brokers at least suspected that insider trading is associated with takeover activity. According
to one, "takeovers are a great example of insider trading. The majority of cases involve leaks. This is the easiest form of insider
trading to prove". Takeovers are regarded as the special events that are likely to move prices and create the climate for insider
trading. The basis for this widely held suspicion is the movement in prices prior to the announcement. One broker considered it "interesting
that share prices lift pre-takeover". An explanation commonly referred to was the fact that in just about every takeover, there are
so many people involved. It is very rare that the price does not move and part of that movement comes from insider trading". According
to a Sydney broker, "some merchant banks leak, especially on West Australian deals". Of course, it is possible that share prices
move upward in the pre-takeover period because takeover targets are often identified in the course of market analysis and because
prices tend to move on rumours of takeovers An interesting feature of this phase of the interviews was that even though participants
were not asked to do so, it was not uncommon for them to name specific takeovers where they thought that there had been insider trading
and, in fact, discuss chapter and verse the insider trading that took place.
Financial advisers said that there is a link between takeovers and insider trading. Some said that they knew of specific cases
while others suspected that there was a link. This question inspired a mixed reaction from the ASX officials. Some quite clearly
doubted that there was such a link, but one replied that "in takeovers it is hard to believe that there is no insider trading". The
observer group most strongly suspected that insider trading took place during takeovers. One respondent said that "it is frequent
and it is demonstrated on graphs". An even more emphatic response was "hell yes-just look at the price movements and turnover a month
to two weeks prior to a takeover. The leaks are in the targets - [from their] clerks, lawyers, CACS, bankers and accountants". On
the subject of leaks, another view was that "the leaks vary. Sometimes they come from the board but more often well below the board
in the advisory groups where there is terrible chicanery". One person who has been associated with many spectacular takeovers reported
that it was common for members of the advisory team to be encouraged by directors to engage in share trading. The attitude of lawyers
to this link was probably best summarised by a Sydney lawyer who explained that, "you often wonder about some large takeovers. Insider
trading need not only occur in small corporations, but associate and warehousing questions are more common in takeovers". The regulators
on balance believed that there was a relationship, although there was once again a problem of hard evidence of insider trading being
available. It seems clear that there is often a connection between insider trading activity and takeovers. Those closest to the market,
such as brokers and merchant bankers, were particularly certain of the existence of this relationship and most other groups on balance
also saw a link. Only the ASX officials seemed to question the existence of this linkage. Their views need to be treated with caution
in this regard in view of the preponderance of industry opinion to the contrary.
Takeovers were pin-pointed as likely insider trading situations due to the profits which could be made by buying shares ahead
of a takeover and because of the long chain of advisers and other persons who are involved in preparing the takeover.
Insider trading as a crime - how serious?
One might speculate whether, if insider trading is not regarded as a serious matter by people within the securities market, it
is tolerated more than if it were seen to be serious. It was found that insider trading is generally not regarded by brokers to be
serious or as significant as other forms of market conduct. A Melbourne broker responded that he could "think of many more examples
of forms of abuse other than insider trading". The more significant forms of conduct were market rigging, which is "more serious
and easier to do"; manipulation by false rumours; corporate fraud; churning of clients; staff malpractices; linked advisers; ramping;
warehousing, and "other rorts such as loans to directors, and asset purchases by directors in smaller listed companies. The public
is being ripped off left right and centre by these rorts". Perhaps the comment that best reflected the brokers' view was that "within
the industry we are laid back about insider trading. Warehousing, circumventing the Takeovers Code and the actions of the big players
are serious matters. Insider trading is one of a number of imperfections in the market".
Only one of the financial advisers was prepared to describe insider trading as a serious problem but a number shared the view
that "in terms of its frequency, insider trading is a small matter but it has the potential to destroy the market". None of the Stock
Exchange officials ranked insider trading highly as a problem. One described it as "no more serious than other abuses". On the scale
of market abuses one official observed that "insider trading is comparatively minor. Ramping is much more serious for shareholders
than insider trading, as many shareholders are likely to suffer. Insider trading gets undue attention because of the public perception.
We are very concerned about unenforced legislation or poorly written legislations. The lawyers generally did not rank insider trading
as the most important form of market abuse but they acknowledged that it was often a difficult assessment to make. One explained
in these terms, "it is hard to say how important insider trading is. Honesty is an important thing about securities markets. Emphasis
should be placed upon making people tell the truth. Insider trading is in this category".
It appears that the industry view of insider trading was that it was not as quantitatively serious as other examples of market
abuse but that it was perhaps potentially more serious. Some of the evidence that emerged from the round of post1987 corporate collapses
supports the view that there are forms of illegal and undesirable activity which are more common. Indeed, the example set by the
high profile business identities could encourage insider trading. If it is not regarded as a serious matter in the range of things
that happen in the market, where the opportunity arises to engage in insider trading, why not take it? When account is taken of the
risks of being prosecuted, the attraction of insider trading is even greater.
Conclusions
The opportunities for insider trading in Australia have been, and continue to be, extensive. This is not simply a matter of greed
but the result of a complex web of values, market conditions and professional or peer group tolerance of insider trading. As the
Chief Manager of the AMP's Investment Operations Research Division said in evidence before the Griffiths Committee, "(t)he people
who would have the clearest idea of what is happening are the people in the broking firms who are taking the orders. Of course, they
have to be careful that they do not spoil any good business that they have by dobbing anybody in" (Griffiths Committee, Hansard,
p. 207).
The frequency and extent to which conflicts of interests occur within the securities industry are such that many cannot handle
these conflicts well. This was particularly said of brokers, especially those who do not have a great deal of background and training
in the industry. Price sensitive information gained on a selective basis from corporations seems to be widely used for principal
trading especially by brokers and financial advisers, who not infrequently trade in this way before making such information public
or releasing it to clients. This is an institutionalised opportunity for insider trading. Insider trading is not likely to be the
main motivation for those seeking positions on the company boards. There is considerable pressure within the securities industry
to obtain access to price sensitive information as mere good market analysis is often not enough to attract clients. Spectacular
gains and quick profits are more easily achieved by insider trading but over the longer term the fundamentals are the more reliable
route to success.
One of the more blatant opportunities for insider trading arises from the readiness of companies to selectively divulge price
sensitive information about their corporation to brokers, institutions and large shareholders. Often there may be good reasons from
the company executives' point of view for doing this, but it is nevertheless grossly unfair and is contrary to the notions of a properly
informed market. It has been all too convenient for brokers and others who receive such information to argue that the availability
of this information does not guarantee a profit or that this information is often misleading or that it is research. Attempts to
explain efforts at obtaining such information as the product of good research, are merely rationalisations. There is room for greater
control of the release of corporate information to ensure that all investors are given an equal opportunity to take advantage of
the market opportunities which this information creates.
The market operates upon the basis of the comforting myth that success comes from market analysis; so long as your market analysis
is correct or you study the fundamentals, you will be able to succeed. Brokers clearly have an interest in perpetuating this abstract,
theoretical view of markets. Whilst it is true that this method is likely to bring success in the longer term, particularly with
blue chip stock, most interviewees acknowledged that resort to inside information is superior to reliance upon fundamentals, particularly
in the shorter term. In an over-analysed and competitive market, the temptation for financial intermediaries to obtain inside information
is enormously attractive. Ironically, it is industry insiders, those who are arguably in the best positions to undertake analysis
of fundamentals, who rely most upon inside information, rumour and herd instincts. Perhaps this is inevitable to a certain degree,
but it seems that too much reliance may be being placed upon such short-cut methods for the market to be healthy and for the public
to have confidence in it. Many in the industry seem to share this view. More timely disclosure of price sensitive information would
reduce the premium value of that information and would reduce both the opportunity for and the scope of insider trading. Such disclosure
would, as well, contribute positively to greater market efficiency.
It is no surprise to find that situational factors in the market such as technological and mineral discoveries and company takeovers
provide major opportunities for insider trading. A bull market, especially where share prices are highly volatile and there is a
great deal of activity, provides many easy opportunities for insider trading. Finally, the apparent tolerance of insider trading
and peer group support for insider traders who have not been convicted are important factors in enlarging the opportunities for insider
trading. When this is associated with the perception of many market professionals that insider trading is not necessarily the most
serious problem facing the market, the risks for insider traders seem to be much reduced. Although insider traders would not concede
the point, insider trading is a more significant issue than most other forms of market abuse, because of the potentially devastating
effects on market confidence and market participation of perceived widespread insider trading.
In my humble opinion, the instability of financial trading markets all over the world exemplifies the fact that free market behaviour
is not always rational behaviour. Although right-wing liberal economic types like to portray packs of investors as some sort of "hive
mind", judging the value of stock in real-time and acting accordingly, investor behaviour is typically more instinctive and random
than that. People might sell their stock in Telstra, for example, because they want to go on a holiday. If enough Telstra shareholders
want to go on a holiday at the same time, the value of Telstra shares will drop if the numbers of sellers outweighs the numbers of
interested buyers. It's a pretty dumb example but it holds true. What does such a decision have to do with the actual value of Telstra?
SFA, but markets are blind to that, and market analysts will try to rationalise the stock price movement in any remotely credible
way that they can.
And what prompted this anti-market spray? The Australian stock market
had $21 billion
wiped off it yesterday in the biggest single-day loss since the week of the 9/11 attacks. The purported reason for the loss hardly
justifies the reaction:
Local traders were anxious after a plunge on Wall Street, which was sparked by a US Federal Reserve warning that interest rates
were likely to rise and energy prices were driving inflation higher.
Anything that can devalue Australian companies by $21 billion in a single day sounds more like a corporate disaster than anything
else. It's barmy. Put simply, the global marketplace could do without the ridiculous volatility that often ensues in financial markets.
Sometimes it seems as though investors might do well to just go and put their surplus capital on red at the roulette table at
Star City instead of pumping it into the stockmarket. At least there is
a sense of immediate certainty about that sort of transaction. I'm not seriously advocating gambling as much as trying to make a
point here, but gambled monies are at the very least not subject to the often inscrutable and senseless whims of shareholders across
the country.
Unsurprisingly, given market volatility and the sense that one is gambling, not investing, when buying shares, critical theorist
Susan Strange once labelled the instability of modern financial markets
"casino capitalism". Make no mistake, investing in
financial markets these days is in many ways closer to being a form of gambling than buying property, or putting your money in the
bank.
Posted by Guy at October 6, 2005 07:44 AM
Comments
This is just the usual October correction. Its a good thing, because it allows investors to get some bargins before the market
climbs up again. We just came off a new high, it may look like a crash but the market is still very healthy. This dip is predicted
to last only a month or two, or even only a few weeks.
You have obviously never invested in the stock market. For a long-term investor it is nothing like a casino. If a stock price
goes down that is a paper loss, you do not actually loose money unless you sell the stock.
To a wise investor an event like this is an opportunity. As Nic said, this is a chance to get bargains before the market goes
up again.
The market can be irrational. But the great thing about the stock market is you can control your risk. You could invest in bank
shares, this way you'd get a relatively stable stock that pays a good dividend. Or you could invest in a speculative stock that might
go up exponentially or vanish altogether.
A smart investor has a broad portfolio of stocks across different market sectors. That way you spread your risk and don't suffer
when the market goes haywire.
Posted by:
Chris Fryer
at October 7, 2005 12:04 PM
Posted by:
Chris Fryer
at October 7, 2005 12:06 PM
"A smart investor has a broad portfolio of stocks across different market sectors. That way you spread your risk and don't
suffer when the market goes haywire."
So it's a bit like betting on a few favourites and a few long-shots at the horsetrack, right? ;) I know some gamblers who
don't think that they've lost money until they've left the gambling establishment of their choice for the day. Until then, it's just
$50 up or $50 down, and the betting continues.
I guess the point I am trying to make is that $21 billion was wiped off the supposed value of companies in a single day, and hardly
anything at all changed in a material sense.
It's like if banks decided to randomly revalue the money sitting in your savings account on a real-time basis. On a whim, a significant
proportion of your savings could disappear, without anything particularly tangible or real justifying that reduction in value.
The October correctio, as I understand it, is literally a correction - meaning those companies have been over valued in the last
year or so, and that is being rectified. As the correction results in a bid, investors and traders panic and sell like mad, and the
market dips further before levelling off and climbing again.
Theres relaly nothing to see here, but the media is beating it up something chronic.
My objective in this article is to discuss certain elements of the leveraged buyout (LBO), sometimes referred to as taking a corporation
private. In this practice, the company's management and other private investors buy out (hence "buyout") all the other shareholders,
almost entirely with borrowed funds (hence "leveraged").
I am mindful, however, of the sage journalistic advice that suggests that the writer should capture the interest of the readers
very early on by establishing the essentiality of the topic, its impact, or, at the very least, sharing provocative examples that
highlight its salience. In no particular order, try these:
Related Results: bribing management in taking private
A recent special report by Fortune (1989) educates us with regard to "How Ross Johnson Blew the Buyout." F. Ross Johnson, of course,
was the CEO of RJR Nabisco who put his company into play by proposing to take it private via the leveraged buyout. Among other things,
it has been suggested that his bid (initially $75 per share, ultimately $109 by Kohlberg, Kravis, and Roberts [KKR]) was preposterously
low. The compensation package for Johnson and a few (very few) managerial colleagues was judged by most observers to be outrageously
high. Beyond that, certain of Johnson's strategies (for lack of a better word) led to a fair amount of enmity between himself and
the special committee of outside directors enchartered to decide the final fate and ultimate ownership of RJR.
There is apparently some substance to these reports. At a minimum, there is an unusual amount of consistency among many observers
that the RJR leveraged buyout did illustrate some excesses that can be associated with such a play. Perhaps, but permit me a quibble.
If we rely on these reports in their entirety, we might be led to believe that F. Ross Johnson lost. He lost his job, presumably
one of great status and reward, as the CEO of a Fortune 500 company. He lost to KKR, for it is KKR who now own and operate RJR. He
may have lost some reputation. The word "greed" crops up repeatedly in some descriptions of this LBO. Beyond that, his professional
competence has been questioned. It has been alleged, for example, that he was totally outmaneuvered by KKR. Taken in the aggregate,
a grim picture and humiliating loss.
Maybe. Maybe not. We may want to consider one other factor before we decide whether or not Mr. Johnson "lost." It turns out that
Mr. Johnson set another record of sorts with his departure from RJR--the largest golden parachute in history. A recent Business Week
(1989) reports that F. Ross Johnson, former CEO of RJR, walked away from this embarrassing loss with "separation pay" of more than
$53 million.
I will be among the very first to concede that wealth, as well as winning or losing, is in the proverbial eye of the beholder.
I must say, however, that I find it difficult to brand anyone a "loser" who after the fray walks away with $53.8 million. That really
does sound like a safe landing. Mr. Johnson deliberately put the company in play; nearly all observers feel that he lost. Even so,
it has to be reported that the consolation prize in this tournament is most impressive.
A Bribe?
Rand V. Araskog, Chairperson of ITT Corporation, has recently written a book, The ITT Wars: A CEO Speaks Out on Takeovers. Araskog
reports that in 1983, Jay Pritzker and Philip Anschutz were interested in gaining control of ITT through a leveraged buyout.
The actual financial details are of little consequence here. Suffice it to say that the "deal" would have involved several transactions.
Among other things, ITT's senior management would be given a 10 percent stake in the new company. This stake would have
garnered Araskog some $30 million or so. Araskog explains in this book that he perceived this $30 million windfall to be little more
than a gargantuan bribe.
Just A Family Affair
Richard P. Simmons took a specialty steel unit of what is now Allegheny International private in 1980. To his credit, this company
has done very well. Two years ago, this same company was once again taken public. Stock was sold and has also done well.
CEO Simmons requested that the board of directors approve an investment of corporate money into a LBO fund. There is nothing manifestly
wrong with that. LBO funds are designed to allow companies (like KKR) to raise money to take companies private. Obviously, one invests
in such a fund in the hope that these ventures will be profitable and provide an attractive return on the investment. Mr. Simmons
evidently believed that corporate funds invested in such a vehicle was a prudent use of these assets.
So far, so good. This LBO fund has three general partners. The problem is that one of these three partners is Brian Simmons,
the son of Richard P. Simmons, CEO of Allegheny Ludlum.
THE LBO AND ETHICS
That there may be some potential for ethical issues to arise in LBO transactions will come as no surprise to anyone. Certainly,
I do not presume to suggest that the prior examples are representative of all LBO transactions. Indeed, I fervently hope that only
a modest few would have the character of those cited. Still, since 1981 (the LBO was relatively infrequent prior to that) more than
1,550 public companies have gone private, nearly as many as are listed on the New York Stock Exchange. I will argue that there are
a number of factors common to every one of these LBO transactions that are most troubling. In fact, they raise the issue of whether
current management of any publicly traded company should be party to an LBO. These issues include, but are not limited to:
An Obvious Conflict of Interest
What is the Incentive for an LBO?
The Ultimate in Inside Information
The Quality of Privileged Information
Full Disclosure
Life After the LBO
The Final Irony: Going Public Again
An Obvious Conflict of Interest
The CEO of a publicly traded corporation has a fiduciary responsibility to shareholders. This responsibility is rather simply
described: It requires that the interests of the stockholder be considered prior to, ahead of, and superior to the self-interest
of the manager at all times and in all circumstances. Clearly, that sets an omnibus and challenging standard.
Obviously, it is in the interest of the shareholders to have the value of their common stock at as high a level as possible. This
is particularly evident when the stockholder may have some immediate interest in selling the stock. Just as obviously, it is in the
interests of the potential buyer of the stock to have the price set somewhat lower. Most of us would be inclined to purchase stock
when we believe that the stock is undervalued, when we think we are getting a "good buy." The value of this stock is going to increase.
Accordingly, we'll buy some of it at its currently undervalued price.
More specifically for these purposes, CEOs as managers should seek to place as high a value as possible on the common stock of
the corporation. CEOs, as rational individuals, who are acting in their capacity as principals in an LBO, can have no such incentive.
On the contrary, it is in their obvious interests to have the common stock valued somewhat lower.
What Is The Incentive For An LBO?
Why would any manager be interested in being involved in a LBO? Maybe, in one of the great understatements in recent memory, they
believe there may be a few dollars in it. Maybe, more benignly, they believe that the company could be run a bit more efficiently.
Suppose that an officer (or group of officers) of the corporation believes that certain assets could be redeployed, divisions divested,
products launched, and so forth. Is there not a mature argument that these individuals are legally, as well as ethically, bound to
identify and execute these strategies for the benefit of the stockholders?
It would seem that there are any number of dynamics that underscore such concerns. One, when is the last time that the board of
directors accepted the first offer and conditions when a management group proposed a buyout? On the contrary, it is commonplace that
the board finds the first offer to be insufficient (the RJR event is a classic case, among hundreds of others). In other words, the
management group typically provides a low-ball offer, much the same that you might do when making an offer on a new home. The obvious
difference in that you do not have a fiduciary responsibility to the seller of the home.
It is also considered to be textbook procedure for the board of directors to immediately market the corporation to all suitors
when faced with a LBO offer. The object of this is to invite "competition," to be certain that a "fair" price is put on the assets
and so forth. What do you suppose this exercise is all about? Is it possible that there are some folks who are not altogether confident
that the current management would act in the absolute best interests of their constituency short of these strategies?
Moreover, it is considered de rigueur to appoint a group of outside directors (because they are purportedly independent, a questionable
assumption) to review and make the final recommendation concerning the management proposal. Why do we do this? Do we do it because
we can count on the LBO group to provide us with a "fair" price from the onset?
Also, it is typical to solicit the opinion of investment banks to determine the "fair market" price of such a transaction. Once
again, why is this necessary? Do we not trust the very managers who serve as fiduciaries of the shareholders? There must be some
doubt in someone's mind.
We can all agree that some notion of the "fair price" of the company should be set. What is less clear is that the management
involved in the bid should set it. Moreover, it is not as though this number can be independently and easily arrived at to the satisfaction
of all observers. On the contrary, in one bidding war for Stokely Van Camp, three different investment advisors provided an opinion,
sometimes referred to as a fairness letter, to three prospective buyers, all at different values ranging from a low of $50 to a high
of $75 per share. If it is true that this "true value" is apparently subject to some debate, many would be quite disturbed if individuals
with rather substantial self-interests are serious parties to establishing the price.
The Ultimate in Inside Information
The most cursory examination of the leading business and financial periodicals over the past several years would suggest some
near crisis regarding inside information. Fundamentally, it is a violation of federal securities law for insiders (for example, company
officers, members of the board) to profit from any transaction inspired by certain knowledge not available to stockholders generally.
Suppose, for example, that a CEO knew that on Tuesday he would report the lowest dividend in the company's history. When this information
is public, it would probably result in at least a short-term reduction in the value of the company's common stock. This CEO could
not, then, legally sell shares in his company short on Monday. In short selling, of course, you hope that the price of the stock
will fall.
The CEO has made a good bet, too good. He is almost certain that the price will fall. The problem is he knows that because he
is privy to information not generally available to others. Under SEC rule 10b-5, he cannot act in this manner: It is patently illegal.
If prosecuted, he would at a minimum forfeit any and all profits derived as a function of this transaction. Beyond that, he would
be subject to criminal penalties as well.
If trading on inside information for a few thousand shares (one share, for that matter) is in violation of federal securities
law, then how can the LBO be conducted in anything resembling good faith? Who on the planet has more pertinent information about
the strengths, weaknesses, threats, and opportunities facing an organization that its management?
More directly, if it is illegal to profit on the basis of "inside" information with just a few shares of the company's stock,
how can we profit on the basis of the ultimate stock purchase, the company in its entirety? Frankly, I find it incredible that the
standing management of a company does not have access to information available neither to its stockholders nor, most certainly, to
the public at large.
The Quality of Privileged
Information
One of the chief arguments often used in defense of the LBO is that there is no monopoly of the right to offer to buy. It is true
that management-led groups, or groups with substantive management interests, can propose an LBO. It is also argued that excesses
in this area are unlikely. Suppose, for example, that the management-involved group makes an offer below a reasonable estimate of
the market value for a company. It is only reasonable to expect that some other suitor would enter the bidding, provide a more responsible
bid and carry the day. In fact, it has been suggested:
Once anyone initiates an LBO, the directors should put the company up for auction. And they should make sure that all serious
bidders have access to all the information needed to make an offer (Business Week December 1988, p. 30).
It seems that there are two pertinent issues here. One concerns whether it is indeed possible for any other bidder to have the
quality of information available to it that is enjoyed by the management-involved team. Once again, who could possibly have the wealth
of information available to the current management team? It is hard to contemplate a scenario wherein the management team would not
have a substantive edge with regard to the quality of information.
Beyond that, however, we may face an interesting catch-22. As the prior quote indicates, it is sensible to put the company to
auction (presumably to encourage some competition and a check on the reasonableness of the management offer) and provide access to
all the information needed to make the offer (possibly to reduce the management information edge.) Surely, much of the information
that would be "needed to make an [informed?] offer" would be proprietary. Before suitors could make an informed bid, wouldn't they
need information regarding state of development of new products, pending lawsuits and settlements, illness of key executives, and
so forth? After all, the current executives are privy to this information.
It is not immediately clear that the interests of the stockholders are met by divulging this information to "outsiders" irrespective
of the LBO. Would such information be considered "inside information" by SEC standards? Would the bidding companies, then, be constrained
from relying on this information for purposes of profit? I think that there is an excellent argument that such companies would be
so constrained. If, however, it would be illegal for such a company to profit by such information, how could we allow the current
officers of the corporation to profit by the same information?
Full Disclosure
Management-involved groups cannot take a publicly traded company private at their own initiative. Among other things, they will
need the "permission" of the shareholders. Naturally, this is accomplished through the proxy process. Benjamin Stein, a lawyer and
economist, has raised a fascinating question regarding this issue. Essentially, the proxy material to a stockholder must include
full disclosure of any material fact involving the action. In theory, the stockholder reads the proxy material, becomes acquainted
with the major aspects of it, and votes either to approve the LBO or otherwise. The Supreme Court has ruled that there must be such
full disclosure of any fact "if there is a substantial likelihood that a reasonable stockholder would consider it important in
deciding how to vote."
This leads Mr. Stein to a persuasive point:
But insiders never disclose the crucial fact that they plan to make vastly more from the corporate assets than they pay the stockholders
for them. I am a stockholder in a few companies in a small way, and I hope I am reasonable. I consider it extremely important if
management plans to make $50 from something it paid me $1 for, and it would assuredly make a difference in how I voted (Stein 1985,
p. 170).
Why would CEOs and other highranking officers of prestigious firms risk their security and their reputations if the opportunity
for reward was not correspondingly great? Do you think that such information should be disclosed to the stockholders to better inform
their vote?
Let's assume that by whatever means the LBO has been approved. What now? The period after the LBO raises even more troubling issues.
Life After the LBO
Not all LBOs are successful, as Revco and Freuhauf could attest. Even so, it has recently been recently reported that the
profit margins for LBO companies were 40 percent higher than their industries' median two years after the buyout. It would seem
reasonable, then, to conclude that many of these LBOs do very well. As might be expected, there has been some speculation about why
this might be the case.
Consider this. Tadd Seitz ran a profitable division of ITT. This company was divested in an LBO by ITT in 1986. Mr. Seitz continued
to run the new company. According to some, when under the control of ITT, is overhead was too high, inventories too large, and management
a bit relaxed with respect to wooing new clientele. These, and other "problems" were addressed and the company has prospered. That,
however, is not the issue. The better question is why wait until the company was private to make these rather elementary moves.
Why were these strategies not employed for the benefit of the initial shareholders?
This is by no means an uncommon scenario. Time after time LBO companies divest poorly performing subunits, drastically reduce
administrative overhead, pare the workforce, renegotiate contracts, and moderate executive perquisites (for example, executive jets,
first class accommodations), among a host of other initiatives. E. E. Bergsman of McKinsey & Co. adds some interesting perspective
to this: "These LBOs are so immensely successful because they are better managed" (Business Week June 1988).
See if the spirit of Bevan still had something to communicate 46 years after his death.
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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