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- Thread starter trendlover
- Start date
Like I said, this is going to be frustrating.
Who paid the pensions for the GM and Chrysler workers? Obama? The tooth fairy? Or the US taxpayers? Is that fair? Why should I have to pay taxes to pay the above-market benefits of some UAW drones, who were largely responsible for driving their employers into bankruptcy?
As for Delphi, they had a bankruptcy proceeding which went through a bankruptcy court, which heard the interests of the various parties and approved whatever happened. When that happens the employees are screwed. so are all the other creditors. Who's crying for them? No one.
The only reason The Nation even ran this story is that they are trying to smear Romney through guilt by association. He invested some money in a blind trust which put some of it into a hedge fund when then got involved in Delphi and totally outplayed Obama and his crowd. So somehow that means Romney is a bastard and unfit to be president. Like I said, this will be frustrating.
What do you think happens whne a company goes bankrupt? The workers get hurt. It's not the bondholders responsibility to make it all OK for them. Obama could have bailed out Delphi too, or his favored group could have outbid the bond holders for Delphi. Then they could have showered more taxpayer money on the Delphi workers. I wonder why they didn't. Maybe because they weren't all UAW.
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What? You have to explain more please.
Leap. Your best jump is 3 inches max. Supposing your dream candidate gets in the White House. What do you think Mitt will do for you? He sees you as the 47%. He wouldn't shake your hand without feeling disgusted. You are as alien to him as you are to Obama. You will still be in the same shithole you are now but your only only comfort will come from the idea that a nigger pinko isn't in the White House. Is that the most you want out of life?
I don't want to be one-sided here. I do believe there are a lot of excesses in private equity that need correcting. I think most of the problems are in PE. Hedge funds which invest in distressed debt are getting into a situation that is already bad or terminal. They are just taking on a brutal neotiating job that the original holders of the bonds are not suited to handle.
Here's an example I find troubling:
10:14 Beneficent Ben enriched private equity with his QE nonsense, and did zilch for the economy and employment....history will judge him harshly
KKR, TPG and Goldman Sachs Capital Partners, which took the former TXU private five years ago in the largest leveraged buyout in history, have paid themselves $528.3 million in fees, even as it teeters toward a near-term bankruptcy or restructuring. The payments consist of a $300 million charge for advising on the buyout, annual management fees totaling $171 million and as much as $57.3 million for consulting on debt deals, the company now called Energy Future Holdings said in regulatory filings. The private-equity firmsâ fees are as much as 25 times greater than average, based on data from Dechert and researcher Preqin.
From Alchemy of Trading blog
Here's an example I find troubling:
10:14 Beneficent Ben enriched private equity with his QE nonsense, and did zilch for the economy and employment....history will judge him harshly
KKR, TPG and Goldman Sachs Capital Partners, which took the former TXU private five years ago in the largest leveraged buyout in history, have paid themselves $528.3 million in fees, even as it teeters toward a near-term bankruptcy or restructuring. The payments consist of a $300 million charge for advising on the buyout, annual management fees totaling $171 million and as much as $57.3 million for consulting on debt deals, the company now called Energy Future Holdings said in regulatory filings. The private-equity firmsâ fees are as much as 25 times greater than average, based on data from Dechert and researcher Preqin.
From Alchemy of Trading blog
"Private equity practitioners, including most famously Mitt Romney, often depict their sector as the epitome of private enterprise. These claims are false. Private equity firms not only depend directly and substantially on government support, they have also actively cultivated links to the state.
snip
But most members of the public do not know that close to half the investment capital in private equity funds is contributed directly by government entities.
snip
Far from being a sort of steroids for weakened investment portfolios there is substantial academic evidence that private equity net returns consistently underperform lower risk public market alternatives. As we will discuss at some length, the industry uses methodologies for calculating their returns that result in much higher reported returns than studies that are based on actual cash flows. There are many important implications of this finding, one of which is that private equity managers may receive as compensation more than 100 percent of any net returns they generate relative to lower risk alternatives.
Ultimately, these findings raise hugely important questions about whether the result may be extractive and socially destructive. Potentially overstated private equity returns are used to justify enormous state commitments to private equity investments. PE firms engage in large scale cost cutting, including many examples where they have reduced private sector worker pay, pensions, and health care benefits, all in the name of âproductivity increases.â Their power to exert these changes depends on the government, not only for capital, but also because interest on acquisition debt remains tax deductible, although the intent of those sections of the tax code was of course to facilitate borrowing for investment, and almost certainly did not anticipate its use for financial engineering, liquidation via underinvestment, or rent extraction.
Unlike Americaâs high growth, low unemployment period of the 1950 and 1960s, the benefits of these sorts of âproductivity increasesâ appear not to have been shared with workers, despite the claims of some private equity managers that the public benefits via their pension fund investments. Rather, it appears that they accrue mainly to the buyout fund managers. If the claim doesnât hold up of high returns for governmental investors, there appears to be no justification at all for the collateral damage of job losses, underinvestment in portfolio companies, and economy-wide distortions, not only of capital allocation but even of policy priorities as a result of the industryâs attempts to justify itself.
The public should be concerned about so much capital winding up in the hands of so few players,
Read more at http://www.nakedcapitalism.com/2012...sponsored-enterprise.html#Q53Egb93R5vzs8jo.99
snip
But most members of the public do not know that close to half the investment capital in private equity funds is contributed directly by government entities.
snip
Far from being a sort of steroids for weakened investment portfolios there is substantial academic evidence that private equity net returns consistently underperform lower risk public market alternatives. As we will discuss at some length, the industry uses methodologies for calculating their returns that result in much higher reported returns than studies that are based on actual cash flows. There are many important implications of this finding, one of which is that private equity managers may receive as compensation more than 100 percent of any net returns they generate relative to lower risk alternatives.
Ultimately, these findings raise hugely important questions about whether the result may be extractive and socially destructive. Potentially overstated private equity returns are used to justify enormous state commitments to private equity investments. PE firms engage in large scale cost cutting, including many examples where they have reduced private sector worker pay, pensions, and health care benefits, all in the name of âproductivity increases.â Their power to exert these changes depends on the government, not only for capital, but also because interest on acquisition debt remains tax deductible, although the intent of those sections of the tax code was of course to facilitate borrowing for investment, and almost certainly did not anticipate its use for financial engineering, liquidation via underinvestment, or rent extraction.
Unlike Americaâs high growth, low unemployment period of the 1950 and 1960s, the benefits of these sorts of âproductivity increasesâ appear not to have been shared with workers, despite the claims of some private equity managers that the public benefits via their pension fund investments. Rather, it appears that they accrue mainly to the buyout fund managers. If the claim doesnât hold up of high returns for governmental investors, there appears to be no justification at all for the collateral damage of job losses, underinvestment in portfolio companies, and economy-wide distortions, not only of capital allocation but even of policy priorities as a result of the industryâs attempts to justify itself.
The public should be concerned about so much capital winding up in the hands of so few players,
Read more at http://www.nakedcapitalism.com/2012...sponsored-enterprise.html#Q53Egb93R5vzs8jo.99
Nice cut n paste ..
So whats your point?
If it's that private equity is not a good investment I won't argue with you there.