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A Glimpse Inside The Industry That Owns Everything

Tyler Durden's picture




 

From Jason Kelly, author of The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything - an excerpt

Prologue

Standing in Legoland in Carlsbad, California in 2011, fulfilling a promise to my then eight-year-old son William, it hit me. I was strolling around a Blackstone-owned property. We'd woken up in a Homewood Suites, owned by Blackstone-backed Hilton. We'd driven to the park in a rental car from Hertz, owned by private-equity firms Carlyle and Clayton, Dubilier & Rice. Practically every time I'd opened my wallet that day, it had been to a company owned by private equity. Even on vacation, I couldn't escape.

A few months later, I had dinner with Greg Brenneman, who'd held top positions at Continental, Burger King, and Quizno's, all private-equity-owned at the time he was involved. Brenneman is now the chairman of CCMP Capital, whose investments have included 1-800-Flowers.com and Vitamin Shoppe. We talked at length about the ubiquity of PE ownership -- my J. Crew sweater, the Dollar General store in my wife's hometown in the Catskills. I started a running list on my BlackBerry that quickly grew to dozens of examples. Brand names piled up, from Toys "R" Us to Petco. The more I looked, the more I found it.

The numbers are staggering. Private-equity firms globally and collectively had almost $3 trillion in assets at the end of 2011.1 The companies they own account for about 8 percent of the U.S. gross domestic product by one estimate.2

Contemplating how they got all that money in the first place triggered another thought, a memory of a colleague mentioning that her mother was a teacher in suburban Toronto and had her retirement account in the hands of the Ontario Teachers' Pension Plan. I'd profiled that pension for Bloomberg Businessweek in early 2010 -- they were pursuing a strategy of buying companies directly, like vitamin retailer GNC. Thousands of other pensions, endowments, and government funds, from California to Singapore, were committing hundreds of billions to the likes of Blackstone and KKR. I thought of my in-laws, each with a pension. They, and millions of folks like them were, usually unknowingly, owners of dozens of companies on my ever-growing BlackBerry list.

While the business of buying and selling companies is far from new, the emergence of these players was relatively sudden. What began as a cottage industry known as bootstrapping and leveraged buyouts in the 1970s and 1980s, had blossomed in the 1990s as a handful of small players started to grow rapidly and others, eyeing a huge opportunity, hung out their own shingles. Somewhere toward the turn of the twenty-first century, the more genteel "private equity" became the chosen descriptor. The name may have changed, but the basic business model was the same: collect money, pair it with debt, and buy a company with the intent of selling it down the line for a profit.

The period from 2000 to the present changed everything. Small private partnerships accustomed to rounding up a few hundred million dollars suddenly were raising funds well in excess of $10 billion, accepting huge sums of money from pensions and endowments eager for investment returns topping 20 or 30 percent a year. Wall Street became an eager lender, developing new ways to provide the debt financing in order to get the associated fees. Big investment banks took to investing alongside their clients.

All that money meant that almost nothing was out of bounds for private equity, and 2005 to 2007 saw a spate of deals for companies deeply entrenched in the infrastructure of our everyday lives, from hospital giant HCA to credit card processor First Data to hotelier Hilton.  My own introduction was a baptism by fire; I began covering the industry in February 2007. During my first week, news leaked of the biggest-ever takeover, the leveraged buyout of power producer TXU.

What happened next was a different sort of education. Deal making came to a screeching halt with the credit freeze of 2007 and 2008 that triggered the broader global financial crisis. The private-equity managers generally hunkered down, and tried to soothe their own anxious investors pummeled by the public markets -- investors who also were worried about what they owned through their buyout funds. Unlike hedge funds, where a bad trade can mean huge losses, an ill-conceived private-equity deal can linger. When the dust settled, private-equity firms still owned all of the companies they'd bought in the boom.

Emerging from the crisis, existential questions abounded. My Legoland epiphany demonstrated just how embedded private equity was in our everyday lives. What seemed like an arcane corner of finance when I arrived was actually central to all of us and very few people actually knew who they were or what they did.

Reporting and writing about business, especially finance and especially in New York, can sometimes feel like a demented sports beat, simply keeping score and tracking rich people getting richer or marginally less rich. But in this case, that's just scratching the surface. What these guys are doing matters to all of us in some form or fashion.

Private equity by its nature and design, is secretive, a breathtakingly wealthy corner of the world where the names only occasionally escape the business pages, names like Stephen Schwarzman, David Bonderman, and David Rubenstein. The relatively small firms they've created, by virtue of what they were able to buy with those ever-growing pools gave them outsized influence as owners and employers. Blackstone, Schwarzman's firm, alone counts almost a million employees through companies it controls. They are modern day Wizards of Oz -- the men behind the private-equity curtain.

The best way to understand these men is to look at what they've created, and it's startling how much each of the largest private-equity firms are mirrors of the founders themselves. There's an egotism at the center of the whole exercise. After all, each of these men, some more willingly than others, ditched successful careers because they deeply believed they saw something that only a handful of others did. And then they went a step further. They decided to build what have become massively influential institutions meant to outlast them.

To understand what they created and what it means to have them so entrenched in our lives, I decided to follow the money to reveal through their words and actions the implications of their activities to fix actions. The trail begins in the sanitized meeting rooms of public pensions, moves to palatial suites in skyscrapers with top-of-the-world views, and on to discount stores and pizza chains and hotels, before it comes all the way back to those same vanilla pension offices and eventually to the retirement checks of teachers and firefighters and, in one of several twists, even some workers of the companies owned by private-equity firms.

Along the way, that money finds itself augmented by debt and pushed into companies that may thrive, implode, maintain, or simply fade away. The money befuddles Washington lawmakers and regulators, in a debate sharpened by the presidential candidacy of Mitt Romney. His private-equity career has brought the industry into the public consciousness in a never-before-seen way, prompting its largest players to explain themselves with at times surprising candor.

Their contemplation stems not only from a bright spotlight but from their own personal situations. Having created unbelievable amounts of wealth for themselves, they're mulling their own legacies, in terms of the empires they've built and what they'll ultimately do with their riches.

With all the talk of retirement, it's easy to forget the relative youth of the industry. I've come to think of private equity as a teenager with a lot of potential, but still struggling with adolescent tendencies -- at times unresponsive, rash, selfish, and fluctuating between arrogance and self- doubt. By virtue of some hard work and a lot of luck, it's ended up in a position to potentially be an upstanding member of society. To ignore it or wish it away is foolhardy. It's here and the influence is growing. And whether it's the price of your morning cup of coffee, your bed sheets on a business trip, or the size of your retirement check in the mailbox, you're involved.

1. Paul Hodkinson, "Logjam Gives Buyout Firms $1.2 Trillion Hangover," Financial News, March 19, 2012. http://media.e?nancialnews.com/story/ 2012-03-19/logjam-gives-buyout-?rms-hangover 

2. Katie Gilbert, "New Green Portfolio Program Could Change Private Equity," Institutional Investor, September 6, 2011. www.institutionalinvestor.com/Article/2895315/New-Green-Portfolio-Program-Could-Change-Private-Equity.html

. . .

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Sat, 10/06/2012 - 21:57 | 2863835 steveo77
steveo77's picture

Just type these words into Google

 

police fatally shoot october 2012

 

now try setpember 2012, August

 

get the idea?

Sat, 10/06/2012 - 22:09 | 2863847 Western
Western's picture

Yet the sheeple are continuing to drink the coolaid that there are average citizen psychopaths (non-police, non-govt) roaming the streets waiting for new people to kill. CSI, Miami Vice, NCIS.. I wonder how many shows are on TV currently that show citizens killing citizens. I could whip up a police killing citizen show/sitcom/film script within a few hours, of course an anti-terrorism liquidation team will break down my door within seconds of hitting CTRL-P. Why would my door get unconstitutionally busted down? Because judges are a captured organ within national borders...

 

If you don't know your rights, you don't have any rights. Anyone telling you otherwise is a _____________________ .

Sat, 10/06/2012 - 23:53 | 2863978 NewThor
NewThor's picture

So they own the Louisiana methane sink hole, the BP spill (bleeding again) and crafted H.R. bill 6566?

ok. makes sense.

Sun, 10/07/2012 - 00:08 | 2864002 markmotive
Sun, 10/07/2012 - 06:46 | 2864183 GetZeeGold
GetZeeGold's picture

 

 

Capitalism - we haven't seen that spirit here since nineteen sixty-nine.

 

Welcome to the hotel California...Jerry Moonbeam is STILL in charge. Not much changes around this place.

 

Sun, 10/07/2012 - 07:51 | 2864231 imaginalis
imaginalis's picture

"You can check-out anytime you like, but you can never leave."

The Eagle's were singing about the psychiatric hospital near Camarillo. Known as The Hotel California.

The building was converted into a library for the Channel Islands University

Sun, 10/07/2012 - 09:25 | 2864528 Thomas
Thomas's picture

This was all described (foreshadowed) in lurid detail in Kevin Phillips' "American Theocracy'. The financialization of the economy is the death rattle of an empire.

Sun, 10/07/2012 - 16:01 | 2865445 BigJim
BigJim's picture

"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." 

– Sir Josiah Stamp, Director of the Bank of England... (Said to be from an informal talk at the University of Texas in the 1920s, but as yet unverified.)[3]

Sun, 10/07/2012 - 14:32 | 2865282 A Nanny Moose
A Nanny Moose's picture

CSUCI! Affectionately know to locals as C-Sucky. Nice campus if you are a single unemployed mother looking to borrow money for that nursing degree.

That "Hotel California" is about former Camarillo State, started somewhere in the rumor mill. From Wikipedia:

Don Henley called it "our interpretation of the high life in Los Angeles

Sorry for the threadjacking.

Sun, 10/07/2012 - 20:57 | 2866331 oddball
oddball's picture

Fuckin' C-sucky.  I hear they have a good mathematics department.

Sun, 10/07/2012 - 08:19 | 2864261 Monedas
Monedas's picture

Capitalism gone wrong is Socialism !

Sun, 10/07/2012 - 08:23 | 2864267 GetZeeGold
GetZeeGold's picture

 

 

Tell him what he's won Don Pardo.

http://www.youtube.com/watch?v=pkyqoiciL-k

 

Sun, 10/07/2012 - 11:16 | 2864626 falak pema
falak pema's picture

like a nun gone wrong who gets shagged by her confessor is atheism; you're being a brain dead priest who only believes all evil comes from the opposite of his own intimate beliefs; not factual reality. 

Ideology is like super glue, it clots the neurones.

Sun, 10/07/2012 - 15:02 | 2865346 rayduh4life
rayduh4life's picture

Actually at best it's facism. 

Sun, 10/07/2012 - 10:10 | 2864566 CH1
CH1's picture

This, my friends, is Capitalism gone wrong.

No, my friend. That is Fascism. BIG difference.

Sun, 10/07/2012 - 00:09 | 2863979 markmotive
markmotive's picture

We're living in a world of ever-shrinking freedom and opportunity.

 

 

Sun, 10/07/2012 - 07:17 | 2864207 Gully Foyle
Gully Foyle's picture

markmotive

That is bullshit.

Freedom and opportunity have always been what an individual can claim and maintain.

See your future be your future.

No one stops someone from succeeding except the person trying.


Sun, 10/07/2012 - 08:11 | 2864251 mercy
mercy's picture

Such well-sounding ideology.

 

Nevertheless naive.

Sun, 10/07/2012 - 08:54 | 2864486 Gully Foyle
Gully Foyle's picture

mercy

I'm glad you have chosen to be a whiney little bitch.

Meanwhile crack dealers are creating their own future with much more will power than you have.

And they are poor, uneducated, and have a much more limited socio-economic background than you.

It's people like you that make ZH the new happy place for losers and unsuccessful piss and moaners.

Why bother to think your way around a problem when it's much easier to blame everything and everyone else for your failure.

Sun, 10/07/2012 - 11:11 | 2864607 LawsofPhysics
LawsofPhysics's picture

I'd hardly hold up a crack dealer as an example of "successful opportunities". Gully.

Be very fucking careful what you wish for.

I have run a bususness for 20+ years.  I can't afford to pay a lobbyist like Monsato, but we are supposed to compete on the same terms while Monsanto buys washington and trys to sue me because their bullshit hybrid seeds get carried by the fucking wind onto my crops?!?!?

wake the fuck up you ignorant shit.  In what fucking universe is that a "fair market"?  I repeat, Monasanto can sue me because I can't control Nature?!?!?!

What the fuck Gully?  Wake the fuck up!!!!!!!!!

The kleptocracy owns washington and then says if you don't rescue are bankrupt ideas and bailout our failed business models they will "fire everybody".  They are holding the fucking worker hostage you dumb shit.  If they can't do that they do what Monsanto does in order to "stay competitive".  Go ahead fire everybody, guess what, costs come down assets values come down and the banks (holding those assets) are suddenly no longer solvent, they die, we start over, this would be a real fucking market dipshit.

Let the bad business models fucking die already, end lobbying, execute the perpertrators of fraud.  Are you fucking kidding me, your example of successful free markets is a crack dealer? LMFAO!!!  Yeah a pot grower-dealer is a good example to then, now how many of those guys are in jail again?

Ha ha ha ha ha!  God you are a stupid fuck.

Sun, 10/07/2012 - 11:37 | 2864647 Ima anal sphincter
Ima anal sphincter's picture

Let the bad business models fucking die already, end lobbying, execute the perpertrators of fraud.

+100 Excelent

Sun, 10/07/2012 - 11:19 | 2864631 monkeyboy
monkeyboy's picture

Ha! Response of the day from Gully Foyle.

Re: Crack dealers what are the benefits like? A decent 401 plan? Sounds like a great future ahead ;)

Sun, 10/07/2012 - 19:17 | 2866170 20-20 Hindsight
20-20 Hindsight's picture

Do you think that putting your entire text in bold makes your drivel seem more relevant?

Sun, 10/07/2012 - 10:08 | 2864563 saturn
saturn's picture

You must be a politician..

Sun, 10/07/2012 - 00:54 | 2864037 Oh regional Indian
Oh regional Indian's picture

This is so not new or News.

I wrote this back in 2008: 

• We always speak of six-sigma as a statistically improbable outcome in anynormal distribution. I firmly believe, we don’t live under the same bellcurve that all our assumptions are based on. We live in a four or even five sigma world from our current code assumption set. Worthy of pondering.
v Macro economic trends: The US Dollar is under severe, sustained pressure. If true impact of “Real” inflation is accounted for, the canary has already fledthe coal mine. 

• China is staggering under its own curious set of circumstances of a largepopulation set “herded” into rapid “development” mode, much like India. Mostof the “gains” are hype. Credit, cheap and plenty until recently (private equity had moved it into the right hands in preceding years), being the soledriver (flogger?) of growth.

http://squareandc.net/eng.html

 

This is how they will swallow it all back in. PE loaned the Tata's th emoney to buy Jaguar Land Rover.... and Corus Steel. Laxmi Mittal's rise has been based purely off PE. The Indian Airline industry flew off on the back of PE (now some key players are struggling and guess who is coming in to buy low???)...

 

ori

Sun, 10/07/2012 - 09:47 | 2864545 MillionDollarBogus_
MillionDollarBogus_'s picture

Last Wednesday night Romney said he would deregulate Wall Street financial institution.

If he wins, the race to the bottom accelerates.

May be a good thing.

 

Sun, 10/07/2012 - 11:06 | 2864612 LawsofPhysics
LawsofPhysics's picture

Really don't see how he can "deregulate" things any further.  So Wall Street will outright steal everyones 401k and drive interest rates to negative infinity?!?!?!?

That is all that is left, then comes world hyperinflation.

Yeah, that ought to turn out well.

Details?  Romney is a robber baron, just like Obama, they both represent a money class that would love to see a return to the dark ages.

Sun, 10/07/2012 - 14:51 | 2865328 A Nanny Moose
A Nanny Moose's picture

Really don't see how he can "deregulate" things any further.  So Wall Street will outright steal everyones 401k and drive interest rates to negative infinity?!?!?!?

Are you calling what we have, deregulated? Ummm....

Why is money in 401K's in the first place? Who requires a social security number to get a job? Who created the 401K? Who created the corporation? Who created The Fed?

Sat, 10/06/2012 - 22:02 | 2863837 moonstears
moonstears's picture

"Talking his book" (literally! literature! sounds neat, though)

Sat, 10/06/2012 - 22:01 | 2863841 Western
Western's picture

Blackstone owns everything? I thought it was GS. Who gives a fuck, they are both petty psychopaths on the road to death by pitchforks and torches. I recall Finky said "my mom depends on CALPERS" after he fucked over a number of pension funds... I lol'd for days. As if his mom doesn't leech on his personal fortune. Nobody was touched by his statement, something about psychopaths just doesn't make me feel empathic for their dilemmas.

 

Fun fact: "State" is a shortened form of the word "estate". Meaning, when you talk about a nation or state, it is simply the ESTATE (an entity's property, entitlements, and obligations) of that particular corporation. Makes sense.

Sat, 10/06/2012 - 22:15 | 2863864 conspicio
conspicio's picture

I like the the fun fact. Here's another. State is from the latin word status, meaning...uhhh...status. That's it, that's all I got.

Sat, 10/06/2012 - 23:17 | 2863939 knukles
knukles's picture

 

 

 

 

Thank the Lord these fuckers have no political influence.

Sun, 10/07/2012 - 04:42 | 2864136 albanian
albanian's picture

Stephen,David & David?

Sun, 10/07/2012 - 01:56 | 2864072 LTCM_L.P.
LTCM_L.P.'s picture

"Who gives a fuck, they are both petty psychopaths on the road to death by pitchforks and torches."

Exactly... To take back some of their clout, one could always be responsible for their own retirement and invest it themselves....god forbid; especially if your employer doesn't match. Mine doesn't and I've contributed exactly $0.00 since joining them. Also own exactly 0 shares of FB...hahahaha Doing better than their 30%/year since so see no need to pay these tool bag paper pushers inflated salaries to do something that isn't all that hard. Also nice to have immediate access to cash when needed without having to explain to someone why I need MY money.

Sat, 10/06/2012 - 22:02 | 2863843 DoChenRollingBearing
DoChenRollingBearing's picture

WE own the Korean bearing import business in Peru.  So what?

On the other hand, we built our business slowly, without much debt, over 21 years to get to where we are now.

http://tinyurl.com/9fdmgyp

Sat, 10/06/2012 - 22:49 | 2863907 john39
john39's picture

they, the cabal, control the printing presses.  they will own everything unless they are stopped.  pretty simple really.

Sat, 10/06/2012 - 23:23 | 2863945 DoChenRollingBearing
DoChenRollingBearing's picture

Well, we will see.  We are privately owned.  Our THREE biggest bearing suppliers (all manufacturers) are all privately owned (family owned, in all three cases).  The cabal IS dangerous, but, predicting the future is pretty hard...

Sun, 10/07/2012 - 07:09 | 2864200 GetZeeGold
GetZeeGold's picture

 

 

but, predicting the future is pretty hard...

 

Buy gold.

 

 

 

You're still here? It's over....go home.

 

Sun, 10/07/2012 - 12:07 | 2864711 DoChenRollingBearing
DoChenRollingBearing's picture

+1  Good advice: "Buy gold."

I already have  :)   |;.!

Sun, 10/07/2012 - 07:16 | 2864206 Urban Redneck
Urban Redneck's picture

But being privately owned, do you really care what your hypothetical market capitalization is (if you were to flip the business or take it public)? Or do you care the more about the net cash flow generated (from assets that you aren't interested in flipping for fiat)?

There seems to be a correlation between the fear of the cabal mentality and the cash is king mentality.

 

Sun, 10/07/2012 - 12:04 | 2864704 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for perceptive reply.

No, of course we can't go public nor are we shopping out our business.  So, you are right, we do not care about any hypothetical market capitlization!

We are now MAKING MONEY, after a long learning curve.  I do not (much) fear any cabal because we have so few debts and a decent business.  

And I hold the gold, hardly anyone I know gives it value.  In one or two ways, we are ready for them "to bring it on".  But, "bring it on" means the SHTF, and trust me, it would be better to solve our problems a more rational way than go through an ordeal.  But, I still do NOT see any relatively easy ways out for America.  The 1% will do fine.  The country will suffer enormous pain.

Sun, 10/07/2012 - 06:23 | 2864172 falak pema
falak pema's picture

Don't confuse small business and Oligarchy business; their models are totally different. 

One is pure business, the other is power, corruption and monopoly, or oligopoly control.

Their power threads are MIC, Money, oil, big pharma, big Agro etc. Its been a forty year construct. 

Sun, 10/07/2012 - 07:21 | 2864212 spentCartridge
spentCartridge's picture

You missed out the part about drug & gun running.

Sun, 10/07/2012 - 08:50 | 2864482 lakecity55
lakecity55's picture

Hey! If they would let us have legitimate business, we would not have to run drugs and guns.

---The CIA

The New, Open CIA:

CIA Spies R Us: Find that cheating spouse with hi-tek.

CIA Autos: Tailor-made Aston Martins.

CIA Passport Photos and Copy Shop.

Sun, 10/07/2012 - 11:05 | 2864608 falak pema
falak pema's picture

MIC = drug and gun running, govt proxy business par excellence, since Kuomingtang days after they got kicked out of Commie China and US psy-ops of those days helped them set up in golden triangle of then Indochina run by the French. Its just been one big dope fest since with the CIA involved all the way as it funded R&R, in Nam then, in Afgh/Irak subsequently, as in SOuth Central America. 

Santikhiri - Wikipedia, the free encyclopedia

Golden Triangle (Southeast Asia) - Wikipedia, the free encyclopedia 

Air America (airline) - Wikipedia, the free encyclopedia

Sat, 10/06/2012 - 22:02 | 2863844 illyia
illyia's picture

That is why I read ZH.

Sat, 10/06/2012 - 22:08 | 2863855 Bicycle Repairman
Bicycle Repairman's picture

Definitely a feel-good article.

Sat, 10/06/2012 - 22:10 | 2863857 yabyum
yabyum's picture

So give me the names of the companies,  I will take my buisness elsewhere. Unless I need a quick burger and a I pad.

Sat, 10/06/2012 - 22:28 | 2863884 BigDuke6
BigDuke6's picture

Growing your own produce will become a sign of defiance in the coming years

Sat, 10/06/2012 - 23:18 | 2863941 knukles
knukles's picture

Agenda 21 illegality

Sun, 10/07/2012 - 06:54 | 2864190 GetZeeGold
GetZeeGold's picture

 

 

Thw UN will save us......by killing us one at a time.

 

Go big blue!

Sun, 10/07/2012 - 08:11 | 2864254 Alpha Monkey
Alpha Monkey's picture

Why kill us when they can imprison us and use our bodies for cheap labor?

Sun, 10/07/2012 - 08:27 | 2864447 GetZeeGold
GetZeeGold's picture

 

 

No cheating.....wait for the news conference.

 

Sun, 10/07/2012 - 16:45 | 2865373 Anti Psychotic
Anti Psychotic's picture

@alphamonkey

 

I think the plan is to do both

Sat, 10/06/2012 - 22:22 | 2863874 dick cheneys ghost
dick cheneys ghost's picture

Boycott em all, I say...............Fuck em and feed em beans.........

Sun, 10/07/2012 - 06:36 | 2864178 Zero Govt
Zero Govt's picture

feed em peas ...it's Presidential decree/dictat

Sat, 10/06/2012 - 22:25 | 2863879 Mercury
Mercury's picture

Well clearly being a private equity company is more attractive than being a public equity company for many businesses of a certain capitalization.

 

Find the non-invisible hand of government in this picture.

 

 

Sat, 10/06/2012 - 22:35 | 2863892 dick cheneys ghost
dick cheneys ghost's picture
The Iron Triangle - The Carlisle Group

 

http://www.youtube.com/watch?v=x3Sb6rvVRJo&feature=related

Sat, 10/06/2012 - 23:29 | 2863927 Mercury
Mercury's picture

...they'll buy a company for a fraction of what it's really worth..."

 

Come on.  Don't you think that at the very least another evil private equity firm would want to up their bid for the same merchandise if that were the case?

 

The whole military industrial complex thing is a separate issue. If George H.W. Bush is behaving inappropriately it doesn't matter if he's doing so on behalf of Carlisle or Disney.  Also notice that ever since it became politically unfashionable to win wars, private interests have increasingly built profitable business models around losing wars.

But my above point is that when the regulations and bullshit associated with being a publicly traded company reach a certain level and when both investors and capital-seekers consider the stock market itself to be overwhelmingly manipulated by crazy machines on the inside and crazy central bankers on the outside...they start to walk away and seek alternatives.  One of those alternatives is private equity which is shadowy, non-transparent and secretive...because it's private.  But it's not private equity's fault that the public equity markets and the US capital markets in general have become such a shitshow.

Sun, 10/07/2012 - 00:55 | 2864038 RSBriggs
RSBriggs's picture

Bush hasn't been president now for almost 4 years.  Get the fuck over it.

Sun, 10/07/2012 - 04:24 | 2864129 cynicalskeptic
cynicalskeptic's picture

Carlyle Group - the home of former Presidents and the source of much of their personal fortunes.... play the game and you get to play along... and the reference was to Bush I - a well connected player in this game , not W who turns everything HE touches to lead.  BTW Clinton is part of Carlyle too... amazing what that firm is into.... 

http://en.wikipedia.org/wiki/Carlyle_Group

http://www.hereinreality.com/carlyle.html

Sun, 10/07/2012 - 06:37 | 2864179 Urban Redneck
Urban Redneck's picture

Carlyle isn't omniscient or omnipotent.  The have made some horrendous investment choices over the years.  I've seen some inexcusable unforced errors by their senior management.  It's a dysfunctional marriage of players with "political connections" or "financial experience."  They're not mutually exclusive groups but the they are completely different worlds.  If the right person isn't calling the shots, the investment play turns into a fumble or worse.

Sun, 10/07/2012 - 07:59 | 2864194 GetZeeGold
GetZeeGold's picture

 

 

Bush hasn't been president now for almost 4 years. Get the fuck over it.

 

It was Bush......infinity bitchez!!!!

Sun, 10/07/2012 - 09:55 | 2864553 Oh regional Indian
Oh regional Indian's picture

You are quite short-sighted if you really believe what you just typed.

Iraq II was launched under Bush Jr. So was Afghanistan I.

They are on-going military/humnaitarian/general fuckedupness disasters.

I suggest a visit to the Opthalmologist GZG. ;-)

ori

Sun, 10/07/2012 - 12:54 | 2865098 NeedtoSecede
NeedtoSecede's picture

Skeptic, you make it sound like there is something wrong with lead. I have found many uses for lead over the years. Especially when combined with brass and the correct amount of powder, lead can be pretty handy...

Keep stackin' it Bitchez!

Sun, 10/07/2012 - 08:01 | 2864241 imaginalis
imaginalis's picture

"But it's not private equity's fault that the public equity markets and the US capital markets in general have become such a shitshow."

Private Equity is shit from the same shitshow in a more potent form

Sun, 10/07/2012 - 02:16 | 2864086 A Nanny Moose
A Nanny Moose's picture

For one thing, P/Eq have no SOx concerns.

Sat, 10/06/2012 - 22:37 | 2863883 Insideher Trading
Insideher Trading's picture

What you did here, I saw it.

This post is the equivalent to a theatrical trailer.

But it piqued my interest. I will buy and read it.

Sat, 10/06/2012 - 22:28 | 2863885 dolph9
Sat, 10/06/2012 - 22:42 | 2863900 disabledvet
disabledvet's picture

well of course the anti-thesis...the Federal Reserve's idea of liquidity...has put the dagger through the heart of this thing too. I mean Chrysler Corporation? hahahahaha. you clowns didn't expect to just "wheel around and sell that sucker" did you? insanity that will be wonderful to write about years hence. no...we're full on JP Morgan (the man not the bank) type capitalism now. Only corporations themselves have the pools of liquidity available to "commence the expanding"...and they are doing just that. this is OLD SCHOOL capitalism where the free cash flow from operations and thorough examination through risk based analysis and potential returns determines the direction of business and ultimately the polity itself. these "industrial concerns" tell Wall Street what to do now...not the other way around as it was for the past 20 years...because standing behind them is a Government Bank...one that has created a bailout regime for the now teeny-ized Wall Street liquidity providers that will keep the Street in its place for DECADES. straight up "it appears to be a very boring world"...but don't be fooled by that lack of volume. MASSIVE amounts of capital are being deployed on projects that will take decades before returns can realized. here's an example: http://articles.marketwatch.com/2012-10-05/markets/34269835_1_oil-majors...
and who wouldn't want their Energy Socks to rise? I know i can take at least 2 minutes off my mile run time when that happens! seriously tho folks...that's real money..."and only the beginning." the decisions were made in 2008..."what's past is prologue." capital on this scale only exists in the USA...there is nothing like it on the planet...and courtesy of the mass of events over the past three years...reported ACCURATELY only here of course (Fukushima, the Arab revolt, the collapse of the EU, the waning of Wall Street, the new American Agressivism, etc...etc...) and all i can say...and do say i might add...is get ready cuz the real show is right around the corner.http://www.youtube.com/watch?v=F6TFW1F6oY0

Sun, 10/07/2012 - 06:51 | 2864188 Urban Redneck
Urban Redneck's picture

There have always been two fundamentally different types of investors making new or additional Private (non-public) equity investments, investors with SMALL piles of cash looking to turn ENLARGE that pile of cash, and investors with LARGE piles of cash looking to REDUCE their cash pile.

Sun, 10/07/2012 - 07:43 | 2864223 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

little bit more to it than that...

http://avalon.law.yale.edu/18th_century/bank-tj.asp

Here is a wonderful little book from the late 1800's.  I think you will find it very interesting.

http://archive.org/details/coinsfinancialsc00harvrich

 

Sun, 10/07/2012 - 12:06 | 2864709 Urban Redneck
Urban Redneck's picture

Haven't had time to read the entire thing but hard money v soft money is a different conundrum.

But even back when there was hard money the same problem existed, now it is more pronounced.

Exxon doesn't need paper (beyond expenses and paying its shareholders a dividend that keeps them happy), so excess paper is a problem that must either be continually managed or disposed of/offloaded to someone else to manage.

Most of the SWFs have huge piles of paper and it is a problem to manage, and when there is more uncertainty as to its future purchasing power or convertibility (regardless of whether the paper is cash or debt) they seek to convert the debt instrument into something else.

Mon, 10/08/2012 - 23:43 | 2869824 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

Hard money vs Soft money..is the very key to the problem.  I don't really like calling it "Soft money" because it is not "Money".  It is bank credit.

That book will leave you shaking your head when you are done with it. Look at some of the cartoons later in the book.  He shows a credit bubble (even back then). 

It was caused by bad legislation (which is the main subject of that book).

You have a large amount of bank credit (bank notes) built up on top of the assets that the credit can actually be redeemed for.

This speech is also interesting.

http://tinyurl.com/ma2dha

It is just amazing when you understand what has actually happened.

Before 1913, the USA made and exported over 50 percent of the worlds goods, there was a huge surplus in the Federal treasury, and there was no tax on labor (income tax).  The Federal govt. was funded almost entirely by taxes on imports and exports.  All bank notes were redeemable in silver or gold coin at face value. 

One of the most important things to get from that book is how the Dollar Coin and Eagle coin worked together and the importance of having public mints and assay offices so that the people can introduce new primary money into the system. All modern fractional reserve/bank credit type money we use now is introduced into the system by borrowing it.

That old book you are reading helped shape monetary policy and keep our nation strong.  It was best seller back then.  People had a far better understanding of coin, credit and circulation.  It took them until 1965 to try again.

http://www.presidency.ucsb.edu/ws/index.php?pid=27108

Notice what he says they will do with silver.

They have been doing that ever since.

I think it is possible to return to prosperity but only if we look as a nation at what made us so prosperous back then.  I also think it will require people to get educated and discern the truth.

I feel sorta like lab-rat in the current experiments that they have going. 

At least we already have the solutions to most of our problems, they are in the history books and old law books. 

 

Sat, 10/06/2012 - 22:59 | 2863918 Uncle Ream Us
Uncle Ream Us's picture

Off topic, but something readers here may want to be aware of.

It looks like movies made in Hollywood will now be censored by filthy, dirty, slimy Arabs.

Islamopproved: Hollywood Begins Hiring Muslim Clerics To Censor Movies Of Whatever They Deem Offensive To Islam
http://patdollard.com/2012/10/hollywood-begins-hiring-muslim-clerics-to-censor-movies-of-whatever-they-deem-offensive-to-islam/ 

 

Sat, 10/06/2012 - 23:03 | 2863923 moonstears
moonstears's picture

Good, no more tripe from Hollywood once these "learned" ones get to censoring? Good fuckin' riddance, serves 'em right!

Sat, 10/06/2012 - 23:22 | 2863942 knukles
knukles's picture

AWESOME

Now nobody'll watch any of the neo-liberal political propaganda manufactured there under the guise of entertainment.

Be too fucking boring.

The beast consumes itself.

Sun, 10/07/2012 - 08:44 | 2864472 lakecity55
lakecity55's picture

ISLAMOWOOD!

Sun, 10/07/2012 - 08:55 | 2864485 GetZeeGold
GetZeeGold's picture

 

 

Muh muh muh.....my Sharia!

 

Sat, 10/06/2012 - 23:14 | 2863935 Dingusdongus
Dingusdongus's picture

There goes my 'Florence of Arabia' desert porn series.
Never mind. Time to start pitching my Goy of Sex ideas.

Sat, 10/06/2012 - 23:29 | 2863943 moonstears
moonstears's picture

Wait till one of these Moolah Fuckin' "clerics" says: "Well just no Israel mentioned, or filmed, or well, Jews, or wailing wall, or dome of the rock photographed." The Jewish tinseltown "elites"(I hear that there are some Jewish guys in high places there?) will go ape-shit! No more funny movies about Israel's black ops spy types, I guess. No more Adam Sandler, or Ben Stiller contracts? Never another Shindler's List? These execs are dipshits.

Sun, 10/07/2012 - 08:42 | 2864470 lakecity55
lakecity55's picture

Achmed: we have decided to run all heathen jews out of hollywood.

All movies are now only muslim-approved.

No more sex, funny homosexual characters, all women must have burka.

Each movie must have a christian or jewish villain, and a leftist who has seen the light of Islam.

Thank you.

Sun, 10/07/2012 - 08:08 | 2864248 Alpha Monkey
Alpha Monkey's picture

I'm glad they are being put into the fold.  If you watch "This Film is not yet Rated", when they climb to the top of the MPAA (the agency that applies ratings to movies... and sensors content they don't like through the use of their ratings) there are two more religeous leaders at the top, a catholic and protestant clergy member.  Don't worry, I'm sure muslim extremist values sit right there with their woman hating and gay hating christian brothers. 

Besides, divide and conquer is almost too easy!!!  Keep sucking the hatred the force down your throat like the good fear slave that you are. 

Sat, 10/06/2012 - 23:01 | 2863920 ebworthen
ebworthen's picture

Where did I leave that 50 feet of hempen rope?

Sun, 10/07/2012 - 06:34 | 2864177 Zero Govt
Zero Govt's picture

in your drawer marked 'Payback Time'

Sun, 10/07/2012 - 01:09 | 2863924 socalbeach
socalbeach's picture

According to a real estate presentation I went to last weekend, private equity firms are buying up residential real estate in the Inland Empire area of S. CA hand over fist. A couple quick searches turned up these,

 

Private Equity’s Foreclosures for Rentals Net 8%: Mortgages 

"Waypoint, a private-equity real-estate fund with $150 million in assets, is pioneering a new approach to making money from the housing crash... Waypoint, which owns 1,100 houses and is buying five more a day, is betting that converting foreclosures into rentals is a better way to make a profit..."

 

Private Equity Bets Billions on Foreclosures

"Private equity firms including Colony Capital, Blackstone Group (BX), KKR (KKR), and Och-Ziff Capital Management Group (OZM) are rushing to make similar bets. They plan to spend at least $7.2 billion to snatch up undervalued single-family homes and then rent them out."

Sun, 10/07/2012 - 06:58 | 2864192 Urban Redneck
Urban Redneck's picture

Stupid Group Think is a VD endemic to Wall Street whores, you would think they might have learned from watching Carlyle get fucked by that line of thinking.  Oh wait, it's only OPM/AUM, not their own skin in the game...

Sat, 10/06/2012 - 23:04 | 2863925 CrazyCooter
CrazyCooter's picture

I have read ZH almost three years now. To confess, Mish was my starting point, but I am just too much of a dork to avoid anything but ZH.

I figured out a lot of shit and politically I am biased very much towards fiscal conservatism.

That landed me in the state convention this cycle.

I still blog about revenue policies in my state (going to grind out part 1 of 5 it seems like tomorrow when I finally have time).

I can not see how the US will have its same role in 5 years. We are like the UK; in the glory days.

The story in my state is the 65B gas pipeline ... to sell LNG to Asia. If the US was preeminent, then we would need that energy for ourselves.

Regards,

Cooter

Sat, 10/06/2012 - 23:26 | 2863950 ebworthen
ebworthen's picture

Yup, we are being sold out.

Those Harpies and Warlocks of Wall Street care not.

Sun, 10/07/2012 - 07:12 | 2864203 GetZeeGold
GetZeeGold's picture

 

 

I can not see how the US will have its same role in 5 years. We are like the UK; in the glory days.

 

More like Georgia......the Russian one. Bad news...the South will not rise again....gonna have to head hard east.

http://www.youtube.com/watch?v=PxyISsA0Oh0

Sun, 10/07/2012 - 08:43 | 2864471 negative rates
Sun, 10/07/2012 - 00:10 | 2864006 DoChenRollingBearing
DoChenRollingBearing's picture

@ Cooter

Keep us informed!  + 1

Sat, 10/06/2012 - 23:35 | 2863958 aerojet
aerojet's picture

I wouldn't worry too much--PE will fall on its face.  They're doing this because it is the last game in town, but that's a bad thing.  I always figured when a public company is taken back private that it's just a way to quietly hide the collapse.  By the way, Best Buy is next on the PE block.

Sat, 10/06/2012 - 23:40 | 2863964 Muppet
Muppet's picture

Private equity is doing as much to collapse public markets as public markets are to ruin themselves.  I don't see the problem... getting rid of public markets is an obvious trend.   Private equity is just one symptom, not a cause.   I forsee bonds and private equity.... why not do anyway with stock since it is rigged.   The markets have ruined themselves.

Sun, 10/07/2012 - 11:10 | 2864617 LawsofPhysics
LawsofPhysics's picture

Of course.  Private equity has unloaded all their debt on the public ledger.  Socialization of PRIVATE losses through bailouts.  When was the last the owners and management of a company had to pay back the creditors with their own wealth when that went company went bankrupt?  1950 something?

Sun, 10/07/2012 - 00:15 | 2863974 Precious
Precious's picture

What makes these pinheads better investors than anyone else? 

Why should they be able to run these various businesses with any kind of competitive advantage?

Simple.  They have access to capital.  

They avoid fucking their secretaries.

They avoid getting busted for DIUs.

They don't hire their wife and children.

They went to the right schools or at least some school.

They know the right people at the pension funds or at least somebody with money, even or especially if it's named Mommy or Daddy. 

They've been taught by lawyers how to downsize a company without getting sued.

They can afford to hire MBAs and buy them a laptop with spreadsheet software.

That's what they do.  And they're not even very good at it.  

But they are better than the British who invented this kind of management shit because at least they don't drink fucking tea with their little finger sticking out.  They still act like Ivy League fags, except with worse haircuts and likewise Americanized by don't ask, don't tell.

Welcome to the new land of opportunity, peanut gallery.

Sun, 10/07/2012 - 00:06 | 2863997 q99x2
q99x2's picture

Well written. Maybe after the collapse someone will read his book to see how people believed the world used to work.

Sun, 10/07/2012 - 00:07 | 2864000 adr
adr's picture

Private equity firms buy public corporations near death due to the impossibility of maintaining growth forever. They throw a few million dollars into them and wait a few years so they can take the company public again. What was bought for pocket change becomes a couple hundred milion dollars worth of shares traded on the stock market again.

Toys R Us, Burger King, and hundreds of others. Existing only to gorw the pocketbooks of those who profit off the legalized theft the market has become. The 2000s saw the abosulte rise of the professional IPO scam. The late 90s was amatuer hour.

Like everything in life, the truth is it is nothing but a scam.

I wouldn't call it private equity if the money is backed by debt and the only purpose of buying the business is to complete an IPO for profit later. Private is staying private so you only have to answer for yourself, and must exist off real profit, not the hope of ever increasing revenue.

Sun, 10/07/2012 - 00:35 | 2864029 williambanzai7
williambanzai7's picture

You got it, it's using OPM to flip companies back and forth.....public, private.....public, private.

He who rakes the most fees wins.

Sun, 10/07/2012 - 00:32 | 2864027 Akrunner907
Akrunner907's picture

The author is a wee-bit paranoid.

Sun, 10/07/2012 - 06:32 | 2864176 Zero Govt
Zero Govt's picture

the author is a wee bit bland ...even the books reviews on Amazon are bland, one mentions a "lack of substance" in the book

Sun, 10/07/2012 - 00:38 | 2864031 anonnn
anonnn's picture

1.Get some like-minded, indecent pals and put up some $.

2. Locate a business with some assets, modest income history and little-or-no debt.  It will be the "mark" to be subsequently looted. Looted big-time with maximum cleverness and leverage.

3. Buy out the business.

4. Using maximum leverage to collateralize the assets,  go to lenders with a "story" and  have the solvent business take on a maximum debt load basd on the "story" of expansion, increased community jobs and benefits, etc. Whip up  employee morale with rumors of promotions. 

5. Proceed to loot the company via huge salaries, bonuses, expense accounts and myriad other clever-strokes to accrue enormous benefits to the principles. 

6.When the business hs been fully hollowed-out, declare bankruptcy.

7. Rinse and repeat.

Iit is all so easy that anyone can do it. Accounting firms have a long history of cooperating.  For their own benefit.

However most people, given the opportunity, would not do it . It is simply not decent.

Only the indecent . The reader knows some.

Sun, 10/07/2012 - 00:55 | 2864039 francis_sawyer
francis_sawyer's picture

You left out the part about where Nicholas Van Orton's brother throws him a birthday party where he ends up jumping off a 50 story building into the festival lobby full of guests through breakaway glass...

Sun, 10/07/2012 - 09:03 | 2864496 francis_sawyer
francis_sawyer's picture

 "You could print pictures of me

wearing nipple rings and butt-fucking

Captain Kangaroo... all anyone would

wonder was whether the stock was up,

or down."

~ Nicholas Van Orton

Sun, 10/07/2012 - 01:00 | 2864040 walküre
walküre's picture

Could be the game in town if Romney should get elected against all odds?

He and his buddies crash the markets, buy public companies on the cheap with all their parked cash and then wait a few years before taking them public again.

Under no circumstances can this game be pulled off with P/E multiples of 60 or higher.

Romney is the King of LBOs and he's got a few more aces up his sleeve. Don't think for a minute that he gives a shit about the Presidency itself. It's just a money and power grab.

The PE groups are sitting on cash that's not earning them anything and thanks Ben Bernanke, all assets are marked to myth.

 

Sun, 10/07/2012 - 08:11 | 2864253 otto skorzeny
otto skorzeny's picture

you mean sociopaths(as are most pols) aren't in it for the public good? then I have to reassess everything I have ever learned from the tee-vee.

Sun, 10/07/2012 - 02:11 | 2864083 A Nanny Moose
A Nanny Moose's picture

Take your kid hunting and camping IMO

Sun, 10/07/2012 - 07:39 | 2864220 GetZeeGold
GetZeeGold's picture

 

 

A pox on whoever just junked you....don't be too hard on them, obviously no one ever took them camping.

 

Sun, 10/07/2012 - 08:35 | 2864460 lakecity55
lakecity55's picture

Hmmm, perhaps folks should learn what I had to learn later in life, but sooner: stay out of debt.

Hard to do, when TPTB shove CCs around and give out houses to deadbeats, yes.

But, pay off your stuff, get a piece of land, and save up in PMs and items of hard value.

My best friend collects and rebuilds classic bikes. He just resold a BSA for a quick grand more than he had in it.

He has a shop full of classic bikes, and he has a waiting list. All cash. He puts the profits into property and PMs.

Sun, 10/07/2012 - 02:49 | 2864101 blindman
Sun, 10/07/2012 - 04:09 | 2864124 falak pema
falak pema's picture

Ah, finally we are getting to the heart of the matter, not discussing the evils of pseudo-science sleight of hand to fix the economic conundrum; of Mises's contribution to humanity vs Keynesianism, sophism of sterile nature par excellence.

We are taking a stroll into very heartland of Oligarchy USa, incarnated by Carlyle and all the others; where power really lies and what this whole Reaganomics/Thatcherist-NWO shooting match has been all about.

Welcome home Pax Americana, land of Oligarchy power behind the tinsel curtain of false democracy and crony republican power. 

Welcome home to those who dictate the strategy of the FED and QEn to pauperise the 99% and to protect the sanctuarised assets of the 0.1%, all stacked in Caymanista never-never land. 

Sun, 10/07/2012 - 07:04 | 2864195 Urban Redneck
Urban Redneck's picture

Carlyle ain't all that.

Sun, 10/07/2012 - 11:25 | 2864259 falak pema
falak pema's picture

its started as the Bush's and Bin Laden's private fund, Saud- Oil Oligarch's grand alliance...now its run by a Sarko brother.

Sun, 10/07/2012 - 13:11 | 2865131 Urban Redneck
Urban Redneck's picture

No it didn't.

Carlucci went to work for Carlyle after he left DoD and later brought in Baker, who later brought in Bush.  The Bin Ladens are rich Yemeni trash in Saudi Arabia.  But Bin Laden Construction was a key subcontractor to Bechtel for the huge projects that were commenced throughout the 70's (incidentally when George Shultz was an executive at Bechtel, along with some Saudis).

Sun, 10/07/2012 - 16:03 | 2865446 falak pema
falak pema's picture

Bechtel was to the oil contractor's lobby in the 60-70s what Halliburton became under Cheney. Both Weinberger and Schultz worked for Bechtel, scion of Bohemian Grove and sponsor of both Tricky Dicky and Ronald as Governor of Cal. 

Amongst the civil sub contractors of Saudi oil mega projects, Bin Ladens were in the top three and had all the right connections to Sauds. That's very, very big money over 30 years. So Carlyle was a major Oil lobby conduit, for which Baker was top lawyer.

Sun, 10/07/2012 - 06:29 | 2864144 NuYawkFrankie
NuYawkFrankie's picture

P.E. = Plain Evil

 

In the main, nothing but a plague of asset-stripping, job-destroying, rent-seeking, self-aggrandising,  kleptocratic, vulture scumbags gorging on the carcass of what was once the common-wealth of the country.

And where, not coincidentally, ex Presidents, Prime Ministers, Senate Finance Commitee Chairmen etc. go to be handsomely rewarded for "Services Rendered" in rigging the game, demolishing safe-guards, looking the other way  - so that the Great-Unwashed (i.e. the rest of us) could be ripped-off and placed in peonage- in perpetuity.

Sun, 10/07/2012 - 07:57 | 2864238 GMadScientist
GMadScientist's picture

Again, do not insult the humble vulture, the only karma-free member of the animal kingdom.

Vultures provide a service, BlackBooksPodners are only useful for hollowing out good companies.

Sun, 10/07/2012 - 08:55 | 2864488 Inthemix96
Inthemix96's picture

Thats right nuyawkfrankie.

Take a look at our own venerable war criminal tony b.Liar.  Bankrupted England, imported 4 million forgieners, allowed gordon mc "one-eyed" broon to sell the gold and spoons at a record market low, de-regulated the banks to allow them to skin us plebs alive, allowed homosexuals like the disgusting prince of darkness himself mandelson to come out of nowhere and amass a personal fortune of some 20 million pounds in just 4 years after having nothing to his name previous.

Took a two-bit criminal harriet har-person and legislated men out of the work force, demonised husband and wife partnerships and marriage, de-criminalised drugs, and let all and sundry from all over the world come and abuse an NHS service on its knees.

When the time comes for pay back, mr b.Liar and his ilk might want to leave the planet with his ill gotten gains from GS.

Someone, somewhere, at sometime will find these bastards and dispense justice.  That I am certain of

 

Sun, 10/07/2012 - 06:31 | 2864175 forrestdweller
forrestdweller's picture

the people with no power or money always feel the need to make up mythical stories about the people with money and with power.

that they form a secret group with secret world wide goals, global power, or all the money.

i doubt that there really is such a groep of concentrated wealth and power with a secret agenda.

of course there is power, wealth and influency. if you have one of those, you have the other two as well.

it's just stories form the people with no money, power or influence.

Sun, 10/07/2012 - 06:48 | 2864185 francis_sawyer
francis_sawyer's picture

Yeah ~ the S&P levitates way up damn near 1,500 all on its own merits because that's where it should be based on its intrinsic valuation... MBS's are purchased to the tune of $40 billion a month as an efficient market clearing mechanism... Almost 50 million are on food stamps (wherebt the profits for that program all accrue to one entity), because starving people is what a vibrant economy produces...

It's all make believe...

Sun, 10/07/2012 - 08:45 | 2864258 GetZeeGold
GetZeeGold's picture

 

 

Yeah ~ the S&P levitates way up damn near 1,500 all on its own merits

 

No, that's just hot QE cash floating around.....and when that happens you should do what?

 

Sun, 10/07/2012 - 07:52 | 2864233 Alpha Monkey
Alpha Monkey's picture

The people in the dark make up theories for what is going on around them because they are excluded from the inside dealings.  It is the same as a scientist who looks at a phenomenon and begins spinning a web of explenation based on other phenomenons that appear to interact or have interacted with it in the past. 

To believe that those with power money and influence would not plan to retain and grow those elements is quite ludacris.  History is repleate with examples of the depravity that humans are capable of when they disconect themselves from society and place themselves above others in their mind.

While there may not be any single entity driving all of the forces, there may be seperate groups working to attian their own ends with similar goals in mind as those who are equally blinded by their avarice and lust for power. 

You are right, they are just stories, but so is every scientific theory... 

Sun, 10/07/2012 - 08:20 | 2864264 forrestdweller
forrestdweller's picture

sure, they make plans to get even more wealth and influence, and they make plan te stay in power or even get more power. they probably don't care that their plans make other people suffer.

but to say that there is a secret group with global plans for world domination.

but maybe that's about the same thing.

Sun, 10/07/2012 - 09:21 | 2864524 Ricky Bobby
Ricky Bobby's picture

Funny thing about myths and stories bubbling up from the underclass, sometimes they are shared to such an extent they become a movement.

Sun, 10/07/2012 - 07:24 | 2864213 BattlegroundEur...
BattlegroundEurope2011's picture

It won't be too hard to hunt these parasites down when(if) the revolution comes.

Sun, 10/07/2012 - 07:55 | 2864236 GMadScientist
GMadScientist's picture

Hint: IEDs at the gas stations where their Hummers and Range Rovers will be lined up.

Sun, 10/07/2012 - 07:53 | 2864235 GMadScientist
GMadScientist's picture

Those that can, do. Those that can't, get together with their golf buddies and LBO those who can.

Sun, 10/07/2012 - 08:07 | 2864246 Monedas
Monedas's picture

North Korean soldier defects after shooting two of his superiors !   There's the man !  There's the story !       All I hear from you guys is who's sucking chimp dicks ?

Sun, 10/07/2012 - 08:25 | 2864357 GMadScientist
GMadScientist's picture

Now that's "showing initiative".

Sun, 10/07/2012 - 08:33 | 2864457 Monedas
Monedas's picture

I'm not being dismissive .... it took me over an hour to log on .... I'm going back to bed !

Sun, 10/07/2012 - 09:01 | 2864481 GetZeeGold
GetZeeGold's picture

 

 

All I hear from you guys is who's sucking chimp dicks?

 

Dude, they're intellectuals.....what did you think they would be discussing?

 

Those guys need to meet Zhanna......she ain't no chimp. If she calls....don't keep her waiting.

http://www.youtube.com/watch?v=Xr-GX2dteNg&feature=related

 

Sun, 10/07/2012 - 09:13 | 2864514 GMadScientist
GMadScientist's picture

I told you a computer hooked up to a bicycle generator wouldn't be all that, but you wouldn't listen ya fat fuck.

Sun, 10/07/2012 - 10:10 | 2864565 Hulk
Hulk's picture

should be able to run a solid state hard drive...

Sun, 10/07/2012 - 08:57 | 2864490 Gully Foyle
Gully Foyle's picture

Monedas

Right, like you wouldn't click a link to some guy sucking off a chimp.


Sun, 10/07/2012 - 09:06 | 2864498 GetZeeGold
GetZeeGold's picture

 

 

Do you have one?

 

Someone needs some Zhanna....

http://www.youtube.com/watch?v=NvkOzQ0-fLQ&NR=1&feature=endscreen

Sun, 10/07/2012 - 09:10 | 2864510 GMadScientist
GMadScientist's picture

Send him a webcam....and a chimp.

Sun, 10/07/2012 - 10:16 | 2864570 Gully Foyle
Gully Foyle's picture

GMadScientist

Isn't that your family cam?


Sun, 10/07/2012 - 11:16 | 2864627 Monedas
Monedas's picture

Thanks for restoring my faith in you worfless fucks .... that's what I call a "gene pool" !

Sun, 10/07/2012 - 08:42 | 2864454 Floodmaster
Floodmaster's picture

Not so far from a corrupt third world country.Does every religion believe in hell?

Sun, 10/07/2012 - 09:13 | 2864513 GMadScientist
GMadScientist's picture

More importantly, does hell believe in them?

Sun, 10/07/2012 - 08:35 | 2864461 lolmao500
lolmao500's picture

America will soon need to invade another middle-east country...

http://www.washingtonpost.com/world/middle_east/kuwaiti-state-tv-says-ru...

Kuwaiti ruler dissolves parliament, setting up new elections; Islamists poised to win again

Kuwait’s ruler dissolved parliament Sunday, a step toward ending months of political gridlock and calling the second elections this year that could again swing in favor of opposition groups led by Islamist factions.

Sun, 10/07/2012 - 08:43 | 2864469 Obadiah
Obadiah's picture

dupe

Sun, 10/07/2012 - 09:12 | 2864511 GMadScientist
GMadScientist's picture

v

to cheat in a duplicitous manner

Sun, 10/07/2012 - 08:51 | 2864483 surfsup
surfsup's picture

yeah private equity is new!  Er no...    Railroads and Opium Trade is an exampl of private equity going back 150 years... 

 

Sun, 10/07/2012 - 09:46 | 2864543 falak pema
falak pema's picture

Private equity laws loosened, copyright laws extended, Libor cartel rigging neglected, rehypothecking denied, foreclosures on false signatures authorised, shadowbanking bailed out, corporate financing of candidates made without impediments/ceilings...start connecting the dots and you get the picture firming out.

Sun, 10/07/2012 - 09:16 | 2864519 lolmao500
lolmao500's picture

MUST SEE!!! ZH must post something about this... a case coming for SCOTUS at the end of the month!

http://www.marketwatch.com/story/your-right-to-resell-your-own-stuff-is-...

Your right to resell your own stuff is in peril It could become illegal to resell your iPhone 4, car or family antiques

Tucked into the U.S. Supreme Court’s busy agenda this fall is a little-known case that could upend your ability to resell everything from your grandmother’s antique furniture to your iPhone 4.

At issue in Kirtsaeng v. John Wiley & Sons is the first-sale doctrine in copyright law, which allows you to buy and then sell things like electronics, books, artwork and furniture as well as CDs and DVDs, without getting permission from the copyright holder of those products.

Under the doctrine, which the Supreme Court has recognized since 1908, you can resell your stuff without worry because the copyright holder only had control over the first sale.

Both Ammori and Bland worry that a decision in favor of the lower court would lead to some strange, even absurd consequences.

For example, it could become an incentive for manufacturers to have everything produced overseas because they would be able to control every resale.

It could also become a weighty issue for auto trade-ins and resales, considering about 40% of most U.S.-made cars carry technology and parts that were made overseas.

This is a particularly important decision for the likes of eBay and Craigslist, whose very business platform relies on the secondary marketplace. If sellers had to get permission to peddle their wares on the sites, they likely wouldn’t do it.

Moreover, a major manufacturer would likely go to eBay to get it to pull a for-sale item off the site than to the individual seller, Ammori said.

Sun, 10/07/2012 - 09:28 | 2864529 toomanyfakecons...
toomanyfakeconservatives's picture

It's Unconstitutional crap like this that is gonna lead to MASS ARRESTS. Some laywers and judges will certainly be accompanying the financial-political criminals on the prison buses... http://tinyurl.com/cd5cyjo/

Sun, 10/07/2012 - 10:16 | 2864572 dwdollar
dwdollar's picture

Stuff like this is why I'm long open hardware and black markets.

Sun, 10/07/2012 - 17:09 | 2865900 Absinthe Minded
Absinthe Minded's picture

Does this have anything to do with gold and silver? If I had any I'd be worried about it. Damn boating accident.

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