Posted on 12/04/2019 6:07:44 PM PST by Hojczyk
Instead the model is ruthless economic efficiency: 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. It has happened around the country. It has made a small number of people phenomenally rich. One of them is a New York-based Hedge Fund manager called Paul Singer, who according to Forbes has amassed a personal fortune of more than $3 billion dollars.
Singer made a lot of his money by purchasing sovereign debt from financially-distressed countries, usually at a massive discount. Once a country’s economy regained some stability, Singer would bombard its government with lawsuits, until he made his money back with interest. The practice is called vulture capitalism — feeding off the carcass of a dying nation. In some ways, it’s not so different from what Singer and his firm, Elliott Management, have done in this country. Over the past couple of decades,
Elliott has made billions by buying large stakes in American companies, firing workers, driving up short-term share prices, and in some cases, taking government bailouts. Bloomberg News has described Singer as “the world’s most feared investor,” which tells you a lot. No one’s even pretending Paul Singer’s tactics are good for anyone but Paul Singer and his fund.
(Excerpt) Read more at realclearpolitics.com ...
It’s economic violence. Remember who said that? Aren’t we a little late?
We are fro the rule of law. Did they break any?
I don’t care about other countries.
Here, if you don’t want others to buy into your company, don’t go public.
More adventures of the Rat/RINO uniparty. This is why Trump ran for POTUS and why the plutocracy that owns the R/R uniparty and the media are so hellbent to destroy him. He is risking everything, billions in wealth, his families safety, what are we doing?
Greed is good.
Love, G. Gecko
I’d love to see a requirement that when a large corp takes over a smaller one, the larger corp becomes responsible for the pension. Too many takeovers for the sole purpose of raiding the pension funds, and then closing the smaller company in bankruptcy.
More laws? Who has pensions nowadays?
Mitt Romney and Bain Capital is another good example of people who have made fortunes by buying up functioning businesses, destroying them and selling off the pieces.
But you don’t have to be an outsider to profit from putting short term profits above long term health of the company. The GE that Jack Welch inherited was the envy of the world with manufacturing operations scattered across the US building unique heavy electric equipment. Jack Welch and Jeffrey Immelt spent nearly 40 years hollowing out GE’s core businesses until the chickens came home to roost. And they got to write books about what great CEO’s they were while they did it.
You miss the point. Cablelas was started and built as a family owned business that grew where it was planted - in Sidney Nebraska. Owners eventually do want to retire and cash out, and after Dick Cabela and family did so, THEN the activist investor Singer bought 11% of the stock and demanded changes that devastated the town.
Get it now?
Having said that, I'll point out that this should be a warning to all of us about the dangers of publicly-traded companies that operate under onerous SEC regulations.
The Board of Directors in one of these companies has a fiduciary duty to look out for the best interests of the investors -- not the workers, not the customers, and not anyone else.
As I posted on an earlier thread on this same topic today ... I've always had a philosophy in business that is aimed at protecting me from the kind of sh!t described here. My philosophy is this: Never let anyone else get control of the company. Does it limit my options for growth? It sure does. But my goal is to NEVER be in a position where I'm forced to make any business decisions against my will.
I’ll only disagree to the extent that Welch did strategically manage the company, pruning off dead branches like the consumer products business that was a perpetual loser and maximizing non-manufacturing business like GE Capital and NBC. Immelt on the other had was an unmitigated disaster, whatever playbook he was following was made up the day before and showed no strategy other than quarter-over-quarter results that enabled him to keep his job far far too long.
Just how does someone collect on “sovereign debt” one has purchased at a discount? Understanding the “buying the debt paper” but... WHO enforces the payment of the sovereign debt?
By what means? By enforcing the inability for a nation to borrow money? Is that how? Who they borrow from says— “hey we’ll loan you this money only as long as you pay what you already own”?
America’s monetary soviet central planning agency, the Federal Reserve, has been making debt available at very cheap rates to America’s most connected crony-capitalist bankers for a couple decades now.
It happens anyway. Lots of rich crooks out there that will steal a company and tear it apart. I was watching a documentary about business moguls of the USA on a history channel. J.P. Morgan wanted a monopoly on electricity. He had already screwed owners of rail lines in order to take them over, did the same with steel plants, and then wanted to do it with electricity.
He funded Thomas Edison and then took over. Then he used underhanded tactics on Tesla and Westinghouse to drive them broke, threatening to sue Westinghouse if they didn't turn over patents on AC motors and power generation. J.P. Morgan stole the patents and created General Electric. This was all done without buying into Westinghouse. What's happening now with tycoons grabbing companies and tearing them apart has been going on for a long time. See the movie "Pretty Woman" for an example.
What I don't like, is the loss of plants and jobs here in the USA, and China getting the benefit. That needs to stop.
When you base history on movies and TV shows you get that kind of attitude.
Anyone who wants to know the difference between Bill Kristol globalist Republicans and Trump "Republicans" must watch this video.
When I was manager of a small electronics factory In North Carolina I trained my workers well and developed their skills. They were talented and hard working.
I went to the owner of the company and asked if we could give them a raise from $10 per hour to $12 per hour. They were worth it because they were so productive. Some of them were single moms, struggling to meet ends meet. His answer? Tell them to get Food Stamps.
There is your Bush league Republican in a nutshell — asking the Federal Government to subsidize your workers.
We used printed circuit boards in our product. We actually had a printed circuit board manufacturer in our town. Wow! How's that for luck. We could get our cirucuit boards made here and circulate money in our local economy. So what did the owner do? He had them manufactured in China.
The contempt globalist Republcans have for the average working American, boggles the mind.
The was happening during the mergers and acquisitions mania beginning in the 1970s. A neighborhood kid, 5 years senior, got into it and did well for himself. It was at the start of my political thought growth.
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