CRE

CRE

On Mitt Romney's Defense Of Bain Capital And The Private Equity Industry - Here Are Some Facts

Lately, Bain founder and GOP presidential candidate Mitt Romney has found himself in a spirited defense of the private equity industry, doing all he can to spin decades of data which confirm, without failure, that PE Leveraged Buy Outs are nothing but "efficiency maximizing" transactions whose only goal is the "maximization" of EBITDA in the pursuit of dividend recap deals, IPOs or outright sales, while loading up the company with untenable amounts of leverage. All this with a 3-5 year investment horizon, which ignores the long-term viability of a company and seeks to streamline (read fire as many as possible) operations as quickly as possible in the goal of maximizing short-term returns. We wish him luck in his endeavor. As for the other side of the equation, we recreate a post we penned back in November 2009 which analyzes just how effective the mega-LBOs have been for the economy, and the workers involved. In other words - the facts. In a nutshell, here they are: "The Disastrous Performance Of Private Equity: Of The Top 10 LBOs, 6 Are In Distress, 4 Have Defaulted." Read on for the full details.

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The Economy Is In Jeopardy

This white paper is a thorough analysis of the current economic situation and what are the most likely outcomes. The result is that the U.S. will be joining the rest of the world in an economic decline. This is not a new recession but a continuation of the existing one. Many of the data reports from the government, especially GDP, are grossly misleading and paint a hopeful but false picture of what is happening. We give our forecast for the next six months.

Guest Post: MF Global - A Fractal In A Frying Pan

Gerald Celente, in an interview with Russia Today, claims he cannot access his PM trading account or get answers to his inquiries. It turns out Lind-Waldock, who he originally had the account with, was subsequently bought out by the now bankrupting MF Global. Understandably distraught, Celente asserts, “They took my money out of my account, six figures, and they have it. They closed out two of my positions, and I cannot get any answers, and I can’t get my money.” Celente got many of us thinking—“If a guy like him can be refused access to his money, then who is safe?” Some argue he should not have been buying “paper gold.” Celente states that he was buying PM futures and taking delivery. “Max Keiser” the “Silver Bears” “Turd Fergusen” and more, have encouraged us to buy silver and “Bust the Comex.” Many of us here on Zero Hedge have fantasized in the comments section about someone wealthy enough to lay a few billion on the Comex for PMs and then stand for delivery. Celente, it is arguable, was doing this not only for himself but perhaps for Joe and Josephine Average who do not have the ammunition to fight this fight. But as I got to thinking, I realized all of the above misses a valuable take away lesson. It is not simply the case that MF Global is a “first domino to fall” or a “canary in the coal mine” or a “harbinger of collapse.” MF Global is a fractal in a frying pan.