Dear KAG: 20220706 Open Thread

I am sorry but Ronaldus Maximus HELPED SCREW OVER THE USA!

First,  Nixon was the President who gave us the EPA by executive order, OSHA, opened the US market to strengthen Mao’s Communist China, and broke the Bretton Woods agreement leading to massive devaluation of the dollar.

(From my old notes).

As VeritasVincit said on the other TreeHouse

VeritasVincit says:

May 21, 2018 at 12:11 am  

Reagan was allowed [to live] because of a commitment from him to allow the CFR to hand pick his Administration. Reagan had more CFR members in his administration than anybody before him. Most of this stuff was well documented in a magazine sized book by a woman in Atlanta, Ga. in 1995. The book, “In Their Own Words” by Cyndee Parker is out of print now but I still have my well used and very marked up copy.

For anyone who is willing to do the work, here is an unbelievable research site.

http://freedom-school.com/reading-material/

𝗥𝗲𝗮𝗴𝗮𝗻’𝘀 𝗔𝗱𝗺𝗶𝗻𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝘄𝗮𝘀 𝘁𝗵𝗲 𝗘𝗿𝗮 𝗼𝗳 𝘁𝗵𝗲 𝗛𝗼𝘀𝘁𝗶𝗹𝗲 𝗧𝗮𝗸𝗲𝗼𝘃𝗲𝗿 𝗮𝗸𝗮 𝗟𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝗯𝘂𝘆𝗼𝘂𝘁𝘀.

First you have to understand what a “Leveraged buyout” IS.

A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or “bootstrap” transaction) occurs when an investor, typically financial sponsor, acquires a controlling interest in a company’s equity and where a significant percentage of the purchase price is financed through leverage (borrowing). The assets of the acquired company are used as collateral for the borrowed capital, sometimes with assets of the acquiring company. Typically, leveraged buyout uses a combination of various debt instruments from bank and debt capital markets…

The leveraged buyout boom of the 1980s was conceived by a number of corporate financiers, most notably Jerome Kohlberg, Jr. and later his protégé Henry Kravis. Working for Bear Stearns at the time, Kohlberg and Kravis, along with Kravis’ cousin George Roberts, began a series of what they described as “bootstrap” investments…

en.wikipedia.org…

Notice the PROPERTY used for COLLATERAL of these loans was NOT owned by the Corporate Raiders! THIS is nothing more than THEFT and FRAUD! It would be like me looking at the 500 acres owned free and clear by a couple of retirees and I go to the bank and get a mortgage using that land as collateral.

This is not moral or ethical and given what happened during the Great Depression, I would be very surprised if laws were not enacted to prevent it.

Where the heck was CONGRESS. Where the heck were the COURTS when this was going on??? If you want to do one single thing to help America get back on her feet, then Declare Leveraged Buyouts ILLEGAL. They are certainly immoral and very destructive to the country.

So what did the US government do about this highly unethical practices???

…In January 1982, former US Secretary of the Treasury William Simon and a group of investors acquired Gibson Greetings, a producer of greeting cards, for $80 million, of which only $1 million was rumored to have been contributed by the investors. By mid-1983, just sixteen months after the original deal, Gibson completed a $290 million IPO and Simon made approximately $66 million.[9] The success of the Gibson Greetings investment attracted the attention of the wider media to the nascent boom in leveraged buyouts.[10] Between 1979 and 1989, it was estimated that there were over 2,000 leveraged buyouts valued in excess of $250 billion…..

en.wikipedia.org…

A US Secretary of the Treasury started the sellout of our economy. Reagan through his laissez faire attitude did nothing to stop it.

…Both economic and regulatory factors combined to spur the explosion in large takeovers and, in turn, large LBOs. The three regulatory factors were the Reagan administration’s relatively laissez-faire policies on antitrust and securities laws, which allowed mergers the government would have challenged in earlier years; the 1982 Supreme Court decision striking down state antitakeover laws (which were resurrected with great effectiveness in the late eighties); and deregulation of many industries, which prompted restructurings and mergers. The main economic factor was the development of the original-issue high-yield debt instrument. The so-called “junk bond” innovation, pioneered by Michael Milken of Drexel Burnham, provided many hostile bidders and LBO firms with the enormous amounts of capital needed to finance multi-billion-dollar deals….http://www.econlib.org...

Without intervention greed took over. (NO USE OF Sherman anti-monopoly law.)

Corporate takeovers became a prominent feature of the American business landscape during the seventies and eighties. A hostile takeover usually involves a public tender offer—a public offer of a specific price, usually at a substantial premium over the prevailing market price, good for a limited period, for a substantial percentage of the target firm’s stock. Unlike a merger, which requires the approval of the target firm’s board of directors as well as voting approval of the stockholders, a tender offer can provide voting control to the bidding firm without the approval of the target’s management and directors…..

Because it allows bidders to seek control directly from shareholders—by going “over the heads” of target management—the tender offer is the most powerful weapon available to the hostile bidder. … Although hostile bidders still need a formal merger to gain total control of the target’s assets, this is easily accomplished once the bidder has purchased a majority of voting stock.

Hostile tender offers have been around for decades, but they were rare and generally involved small target firms until the midseventies. Then came the highly controversial multibillion-dollar hostile takeovers of very recognizable public companies. By the late eighties there were dozens of multi-billion-dollar takeovers and their cousins, leveraged buyouts (LBOs). The largest acquisition ever was the $25 billion buyout of RJR Nabisco by Kolberg Kravis and Roberts in 1989. [Editor’s note: this was written in 1992.] …. http://www.econlib.org...

This is the result of the 1980’s leveraged buyout feeding frenzy.

Of mergers and acquisitions each costing $1 million or more, there were just 10 in 1970; in 1980, there were 94; in 1986, there were 346. A third of such deals in the 1980’s were hostile. The 1980’s also saw a wave of giant leveraged buyouts. Mergers, acquisitions and L.B.O.’s, which had accounted for less than 5 percent of the profits of Wall Street brokerage houses in 1978, ballooned into an estimated 50 percent of profits by 1988…

THROUGH ALL THIS, THE HISTORIC RELATIONSHIP between product and paper has been turned upside down. Investment bankers no longer think of themselves as working for the corporations with which they do business. These days, corporations seem to exist for the investment bankers…. In fact, investment banks are replacing the publicly held industrial corporations as the largest and most powerful economic institutions in America….

THERE ARE SIGNS THAT A VICIOUS spiral has begun, as each corporate player seeks to improve its standard of living at the expense of another’s.

Corporate raiders transfer to themselves, and other shareholders, part of the income of employees by forcing the latter to agree to lower wages.

January 29, 1989 http://www.nytimes.com... New York Times

America has been quietly sold off piece by piece. This is a sampling of the industries with over 50% foreign ownership, according to Source Watch http://www.sourcewatch.org...

* Sound recording industries – 97%

* Commodity contracts dealing and brokerage – 79%

* Motion picture and sound recording industries – 75%

* Metal ore mining – 65%

* Wineries and distilleries – 64%

* Database, directory, Book and other publishers – 63%

* Cement, concrete, lime, and gypsum product – 62%

* Engine, turbine and power transmission equipment – 57%

* Rubber product – 53%

* Nonmetallic mineral product manufacturing – 53%

* Plastics and rubber products manufacturing – 52%

* Other insurance related activities – 51%

* Boiler, tank, and shipping container – 50%

* Glass and glass product – 48%

* Coal mining – 48%

A real eye opener isn’t it. But it gets worse. The Department of Homeland Security says 80% of our ports are operated by Foreigners and they are buying and running US bridges and toll roads. http://www.alabamaeagle.org...

Statistics (courtesy of Bridgewater) showed in 1990,before WTO was ratified, Foreign ownership of U.S. assets amounted to 33% of U.S. GDP. By 2002 this had increased to over 70% of U.S. GDP. http://www.fame.org...

The problem is getting worse as this more recent article shows.

I’ve written on this before (and also here, and here). In the 1980s during the great takeover boom and hollowing out of the industrial heartland, many states adopted amendments to their corporate codes that codified directors’ fiduciary duties, so-called “constituency statutes”. In general, these provisions made it clear that a director need not “maximize shareholder value.” Rather, in complying with their fiduciary obligations, directors may take all sorts of things into consideration – the impact of their decisions on various constituencies, including employees, the community, the environment, the color of the sky, whatever…

When these statutes were first passed, they were heralded as way to protect jobs, etc….

My problem with these statutes is that they strike me as a bit of a head fake. While they certainly give boards the power they need to protect local communities, etc should they so desire, they don’t actually require directors to protect those constituencies. In effect, such statutes, simply give directors another fiduciary lever to pull when negotiating with a potential acquirer. 

I’ve said this before, but you know a board might be very concerned about the impact of a potential acquisition on employees and the community when the bid is $69. At $75, the board’s concerns about the impact on the community might start to fall away. Why not move the HQ to Paris? It’s so much nicer there than Cambridge. At $85? Employees … we have employees?! 

There’s no requirement that a board share the incremental price increase with those stakeholders who will lose out when a transaction is ultimately done….. lawprofessors.typepad.com…

And what we saw under OH!Bummer/end of Bush.

‘Whitewashed Windows and Vacant Stores’

As I drive around my town, I can’t get the lyrics or somber melody out of my head. It is like witnessing old friends drop dead one by one.

Last week I went into town to buy some guitar strings. Band Central Station, a friend of 30 years, was gone. In its place? Nothing….

And, it isn’t just small enterprises. We lost a Circuit City, a Chevrolet dealership, tried-and-true franchises like Dairy Queen and Arby’s. Last week Sam’s Club announced it will close its local big box bulk store. Then came news that Wal-Mart, the parent company, intends to lay off 10,000 Sam’s Club Employees. Even the ubiquitous 99 cent stores have been cut in half….

So, the businesses that provided jobs are gone, the office and retail space sits vacant, likely in default. The windows get broken, the walls get tagged, the weeds grow, trash blows, and, with no one to stop it, nature begins the process of permanent destruction. The value of those businesses and real estate is now gone.

Each of these failed enterprises is a sad testament to the times we live in, but taken in their entirety, they foretell an even grimmer future. It will be a longtime before the jobs return…

The failure of Linen’s and Things is a prime example of how Wall Street plundered Main Street, robbing retailers, big and small, and leaving a trail of failure, unemployment and boarded up buildings behind.

Once Wall Street realized that success can only be so profitable but failure has unlimited potential, the race was on to loan money and securitize the debt.

….You might be familiar with the mall-based, teen-focused, accessories chain, Claire’s Stores. It was taken over in 2007 by Apollo Management LP for $3.1 billion. At the time, the chain had over $245 million in cash on hand. Today, the cash is gone. Struggling under the weight of $2.3 billion in debt, sales continue to decline….

Underlying all of this are the same activities that led to losses in sub-prime residential equities. Money was looking for a home, and some investors saw that cash could be leveraged out of these enterprises by buying them with someone else’s money and looting the assets.

The making of more and bigger loans was driven by the fees and bonuses Wall Street could earn by finding a home for private equity. They didn’t care about the quality of loans because, just like sub prime mortgages, these loans were being pooled into securities and sold.

As the market overheated, it became a breeding ground for fraud. A flurry of new court cases reveals the disturbing extent to which commercial mortgage borrowers may have doctored loan documents…

The counter parties who sold the default swaps, but only have fractional reserves to offset losses will have to turn to the government for further bailouts or not pay the banks. That is why AIG was bailed out in 2007. Should we do it again?

The investors in these commercial properties, pension funds, hedge funds, etc. will bear the losses, and will probably bring numerous class action law suits against the originators of the investment pools, further tying up vacant commercial property until the case makes it’s way through court.

But, as these were mostly Special Purpose Vehicles, registered in the Cayman Islands, the enormous profits are not only unrecoverable but cannot be taxed.

Everyone says it’s the economy and that we are “coming out of it” as though it were all a drug-induced haze. But, we aren’t coming out of anything, we are going deeper. Nothing has improved except Wall Street compensation. We still don’t make anything, export anything, or do anything that is creating marketplace returns sufficient for the profits of these firms.

They aren’t living off of the fruits of our excess, or adding value, they are eating the seed corn. And now we see that they have hollowed out the USA so Hillary’s 16 year plan to destroy the USA could be brought into action. POTUS Trump slowed them down and that is why Bye Me is so OBVIOUSLY ANTI-USA.
This ‘Great Reset’ is WORLD WIDE so they had to play catch-up in the USA.