Trump Might Be the End of the Bush-Obama Consensus

Say what you want about the Obama economy, but one aspect of it must be stated up front: It was the ‘Happy Time’ of crony capitalism. I know this statement departs from the glowing narrative being promoted by mainstream sources, but facts are facts. Maybe Obama’s was left-cronyism, whereas Bush pushed a right one, but no matter. Crony capitalism has done well since 2009.
It’s not hard to understand why. When an era’s political milieu is defined by Dodd-Frank, the Affordable Care Act, feeding the national security monster, climate-change-inspired central planning, Elizabeth Warren, and Bernie Sanders, then you are going to increase costs of doing business. Large, well-connected firms will benefit, as a result if only because large, well-connected firms can afford to comply. Everyone else will go out of business, become an entrepreneur, do consulting, join the gig economy, or whatever else is necessary to just get by.
Such is the conclusion of regulatory capture, and it’s no surprise. The sainted Franklin Roosevelt embarked on a similar round of unprecedented regulation during the so-called First New Deal. The large corporations of his day did very well – from 1933 to 1937 – and worked hard for his reelection. If you worked for one of these lucky organizations, you wouldn’t even know there was a Depression going on. FDR’S economy was one in which real incomes rose – a glorious thing to anyone earning an income in those days.

This post was published at Ludwig von Mises Institute on December 26, 2016.

The Fallacies of Bernie Sanders

Where Bernie Went Wrong: And Why His Remedies Will Just Make Crony Capitalism Worse. By Hunter Lewis. Axios Press, 2016. 284 pages.
Hunter Lewis has rendered a great service with his new book. Writing from an Austrian perspective, he has given us the definitive analysis of the Bernie Sanders phenomenon. Though Sanders did not win the Democratic nomination, he accomplished something remarkable. ‘If Bernie’s campaign was primarily an exercise in moving public opinion, it was wildly successful. He carried young people by wide margins. He shifted the Democratic Party and eventually its platform in his direction.’ (p.1)
How did he do this? ‘Bernie often says out loud what others are privately thinking.’ (p.13) The middle class and the poor are not doing well, he says; and the fault lies in a ‘rigged’ system. ‘The economy becomes rigged because the rich, primarily represented by ‘greedy’ billionaires and corporations, use their wealth to subvert the political process and take command of government.’ (p.24)
Lewis finds much truth in Sanders’s accusation. In a manifestly corrupt way, for example, failed banks and businesses were ‘bailed out’ after the financial crash of 2008. ‘[Hank] Paulson, former CEO of Goldman Sachs, was one of the architects of the Wall Street bailout of 2008 which not only rescued Wall Street, but also rescued his own firm, along with all the shares he still retained in that firm.’ (p.132)

This post was published at Ludwig von Mises Institute on Nov 25, 2016.

The View From Under The Bus

As the dust settles from the recent presidential election, it’s becoming clear that a large part of the sentiment behind the vote for Trump reflects a deep dissatisfaction from middle and lower-class working families. The traditional fruits of prosperity have been rising higher and farther out of reach for them, as their ability to make a living wage has been eroding year-over-year, for decades.
They’ve now reached the point where they no longer trust the empty promises that have been sold them by a steady stream of politicians — on both side of the aisle — who have lined their own pockets with lobbyist money while overseeing a tremendous shift of society’s wealth to crony corporations and the top 1%. Trump’s victory can largely be summed up as a defiant yelp from the masses decrying: “I may not know what the solution is, but I’m damn sure more of the same ain’t it!”
Of course, we here at PeakProsperity.com are in full agreement with that righteous anger. Through borrowing way too much, bailing out rather than prosecuting bad actors, printing trillions of “thin air” dollars, a deliberate pursuit of financial repression and other schemes — the future prosperity of the “everyday American” has been stolen by those in power and those positioned closest to the trough. Mathematically, this orgy of excess needs to be balanced by severe austerity; an austerity the elites refuse to suffer but are forcing onto everybody else. No wonder the masses are pissed.
Few visuals drive this injustice home better than this one of historical bank CD interest rates. Note how they’ve been in steady collapse since the mid-1980s:

This post was published at PeakProsperity on November 22, 2016,.

Why We’re Ungovernable, Part 15: Glenn Greenwald Explains The Election

The world’s elites, because they live in a system created by themselves for themselves, tend to see events like Brexit and President Trump as aberrations rather than symptoms of a fatal disease. They’re wrong of course, and the great Glenn Greenwald has posted an essay (Democrats, Trump, and the Ongoing, Dangerous Refusal to Learn the Lesson of Brexit) that explains why. Here are a few excerpts:
Put simply, Democrats knowingly chose to nominate a deeply unpopular, extremely vulnerable, scandal-plagued candidate, who – for very good reason – was widely perceived to be a protector and beneficiary of all the worst components of status quo elite corruption. It’s astonishing that those of us who tried frantically to warn Democrats that nominating Hillary Clinton was a huge and scary gamble, that all empirical evidence showed that she could lose to anyone and that Bernie Sanders would be a much stronger candidate especially in this climate – are now the ones being blamed: by the very same people who insisted on ignoring all that data and nominating her anyway.
But that’s just basic blame-shifting and self-preservation. Far more significant is what this shows about the mentality of the Democratic Party. Just think about who they nominated: someone who – when she wasn’t dining with Saudi monarchs and being feted in Davos by tyrants who gave million-dollar checks – spent the last several years piggishly running around to Wall Street banks and major corporations cashing in with $250,000 fees for 45-minute secret speeches even though she had already become unimaginably rich with book advances while her husband already made tens of millions playing these same games. She did all that without the slightest apparent concern for how that would feed into all the perceptions and resentments of her and the Democratic Party as corrupt, status-quo-protecting, aristocratic tools of the rich and powerful: exactly the worst possible behavior for this post-2008-economic-crisis era of globalism and destroyed industries.

This post was published at DollarCollapse on NOVEMBER 9, 2016.

EMAILS PROVE CHELSEA USED CLINTON FOUNDATION MONEY TO PAY FOR HER LAVISH $3 MILLION WEDDING

The Wikileaks emails continue to be a treasure trove of Clinton Foundation corruption, and that includes daughter Chelsea.
In this latest revelation dated January 4, 2012, former top Bill Clinton aide and Clinton Foundation board member Doug Band warns Podesta, ‘Once we go down this road’ in regard to Chelsea looking a little too deeply into the goings on at the foundation, after admitting a few bombshells about where the money really goes.
Apparently the 501c3 was used not only to pay for Chelsea’s lavish $3 million wedding, but also for her ‘life for a decade,’ and that’s in addition to Chelsea skirting taxes on money from Bill and Hillary:

This post was published at The Daily Sheeple on NOVEMBER 7, 2016.

Globalization Faces Challenges

For much of the second half of the 20th Century, and even into the new millennium, ‘Globalization’ was the dominant theme used to describe the drift of the world economy. It was widely considered both natural and inevitable that the world economy would continue to integrate and that national boundaries would become less constraining to commerce and culture. And with the exception of the eternal ‘anti-globalization’ protesters, who robotically appeared at large gatherings of world leaders, the benefits of globalization were widely lauded by politicians, corporate leaders and rank and file citizens alike. But a casual glance at the world headlines of 2016 suggests that the belief in globalization has crested, and is now in retreat. What are the consequences of this change?
International trade has existed for millennia. But few modern historians would characterize the trade caravans that crossed the Himalayas and the Sahara as sources of international conflict. Rather, they are widely seen as a useful means to bring goods that were plentiful from one region to other regions where they were scarce. Along the way, routes like the Silk Road in Asia created a great number of positive secondary benefits in culture and politics. But relatively modern developments such as ocean-going sailing ships, modern navigation, and steam and diesel power, have greatly increased the size and scope of trade. Globalism was also boosted rapidly by technological advances in communications, including intercontinental jet travel, fax machines, satellite telephones, the Internet, real time money transfers and massive investment flows to international and emerging markets.
Since the end of WWII, the establishment of international reserve currencies and the rise of supranational organizations, such as the United Nations, The World Bank, and International Monetary Fund, has saddled trade with more political baggage. The rise of bi-lateral and multi-lateral trade negotiations, which are often shadowy and bureaucratic affairs conducted behind closed doors, have further eroded support for trade. Oftentimes these efforts have resulted in deals that clearly favor politically connected players and have given rise to justified accusations of cronyism. By opening larger markets and reducing costs, certain corporations have amassed shocking wealth. The benefits to workers are far more diffuse and difficult to quantify.
The Harvard Business Review of May 13, 2016 published an article by Branko Milanovic about the unequal distribution of wealth generated by globalism. Milanovic comments that, since the mid-1980s, globalism has resulted in the ‘greatest reshuffle of personal incomes since the Industrial Revolution. It’s also the first time that global inequality has declined in the past two hundred years.’ Milanovic points to two main conclusions. First, he highlights the massive percentage gain in wages in Asia, particularly among the middle classes. In some cases, percentage wage gains in the Asian middle class have eclipsed the percentage gains experienced by the top one percent in the richer Western economies.
In stark contrast, the U. S. and Western lower and middle classes have enjoyed almost no percentage wage increases, while their top one percent was the only group to experience significant income gains, based on available household surveys from 1988 to 2008. A recent unpublished paper by John E. Roemer, a political scientist at Yale, suggests that the diminishing of global inequality made possible by trade is far less potent politically than the relative increases in national inequality. In other words, the benefits of globalism are obscured while the costs are highly visible.

This post was published at Euro Pac on October 26, 2016.

How Corporations Turn $1 of Political Spending into a $760 Windfall – at Your Expense

Who gets the most corporate welfare – a.k.a. government freebies to for-profit companies – comes down to which companies do the most political spending on campaign donations and lobbying in Washington.
And it turns out those companies spending big bucks investing in Washington see huge rewards. That’s all at the expense of the American taxpayer… but we’ll get to that next.
First, we’ll show you how nothing beats – or even comes close – to gains wrought from corporate welfare…
Political Spending Yields the Biggest Returns by Far
In 2014, the Sunlight Foundation, a non-partisan nonprofit a group that wants government transparency, conducted a study of political spending over the 2007 to 2012 period. It looked at the lobbying expenditures and campaign donations of the 200 companies most politically active in the United States- and in particular, what each got in return.

This post was published at Wall Street Examiner on October 5, 2016.

It’s Time We Crush the Putrid Roach Motels of Philanthro-Crony-Capitalism, Starting with the Clinton Foundation

Philanthro-crony-capitalist corruption in the U. S. has reached levels that put Lower Slobovia to shame. Granted, the fantasy of philanthrocapitalism is appealing: take a bunch of fabulously successful entrepreneurial billionaires, grant their foundations tax-free status, and then unleash them on the world as philanthropists who will solve problems by applying the incentives of capitalism. While this sounds great in a TED talk, the ugly reality is that it was philanthrocapitalism’s criminal predatory twin, Philanthro-Crony–Capitalism, that was unleashed. To illustrate how Philanthro-Crony–Capitalismworks, let’s visit the charmingly corrupt and venal nation of Lower Slobovia. Former President Paytoplay starts a non-profit charitable foundation, which starts business right as Former President Paytoplay’s wife is appointed Secretary of State for Lower Slobovia. Since we know Lower Slobovia is corrupt, we know how this goes. Dictators, corporations, cartels, etc. who need favors from Lower Slobovia make huge “donations” to the Paytoplay Foundation, and like magic, their favors are granted by the government of Lower Slobovia.

This post was published at Charles Hugh Smith on TUESDAY, OCTOBER 04, 2016.

They Are Not Fixed! U.S. Banks Need Billions of New Capital Under New Fed Tests

Wall Street would have to come up with billions of dollars in additional capital in a proposed revamp of the Federal Reserve’s annual stress tests that could also scrap some provisions that lenders have criticized.
As the Fed has signaled for months, it is considering changes that would raise the minimum capital that the biggest banks need for a passing grade, Fed Governor Daniel Tarullo said Monday. But the Fed is also mulling concessions that Wall Street has sought, such as eliminating its assumption that lenders would continue to pay out the same level of dividends and buy back shares during periods of financial duress, he said.
The plan shows that even after a litany of new rules and capital demands imposed on the biggest banks in response to the financial crisis, regulators still aren’t satisfied that Wall Street is safe enough to endure another economic tsunami. Tarullo, the Fed’s point person on regulation, conceded that the proposal ‘would generally result in a significant increase in capital requirements’ for the largest lenders.
The overhaul tries to incorporate all the new capital requirements into the stress tests, which already represent the highest hurdle that U. S. banks must clear to show they can survive a hypothetical crisis. A particularly heavy mandate for Wall Street giants is an extra surcharge each firm has to maintain based on their size and complexity. For JPMorgan Chase & Co., that surcharge means an extra 3.5 percentage points of capital.

This post was published at David Stockmans Contra Corner by Jesse Hamilton, Bloomberg Business ‘ September 27, 2016.

88% Probability We Just Entered Recession & The Broken Monetary Mechanism That Got Us Here

My last piece ‘The Matrix Exposed’ generated a bit of a stir. And as per usual the PhD’s had some fairly colourful things to say to me regarding the notion that more money and more credit may actually stall an economy. But look I’m not trying to be offensive to anyone. I’m simply making a case that when consumer credit becomes the basis of growth, well you have a real problem. And that is a pretty reasonable argument even without the hoards of data backing it up.
But so allow me an attempt to mend some bridges. Let’s start by looking at the various existing frameworks that drive economic policy. We have Monetary policy (the banks), Fiscal policy (Congress), Microeconomic policy (Corporations). So let’s look at each.
Let’s begin with Fiscal policy. The very first issue that should jump out to everyone is that Congress has been utterly ineffective for almost 2 decades now. That is because the partisanship has become so intense that there simply seems no room for compromise in an effort to get any reasonable piece of legislation done. What we are left with is a slew of outdated fiscal policies. Perhaps most detrimental is a corporate tax rate nearly twice that of many other developed nations.
The problem with relatively (to other nations) high corporate tax rates is it means that any domestic investment, everything else equal, has a significantly longer breakeven point. Said another way, the return on domestic investment is much lower than the return on foreign capital investment (ceteris paribus). This is a very intuitive concept, easily digestible by all. The implication is that the relative level of corporate tax rates here in the US incentivize corporations to invest elsewhere.

This post was published at David Stockmans Contra Corner on September 16, 2016.

Apple Tax Grab by EU Invades IRS Airspace

On August 30th, the European Union (EU) Commission ordered the Irish government to reclaim some $14.6 billion of so-called back taxes plus interest from Apple Inc. The order challenged sovereign tax authority within the EU and well-established international tax rules. The aggressive stance of the Commission set off a furor of high level political argument among taxing authorities and multinational companies accustomed to complex but legal international tax planning. Apple’s case was big enough to place it at center stage in a simmering problem for governments in striking a balance between attracting businesses, creating jobs, generating taxes and deciding precisely what type of earnings can be taxed.
In a testament to how strange the taxing regimes have become, the Irish government has protested loudly and is reluctant to take the nearly 15 billion the EU says it is entitled. When small countries turn down such sums, it should be clear that the stakes are much higher.
With uncontrolled socialism and Keynesian monetary policies killing economic growth around the world, governments have ever greater need to wring revenue from the relatively stagnant pool of corporations and wealthy individuals. While the crackdown on personal tax havens, in Switzerland and the Channel Islands for instance, has been largely successful, corporations have become extremely adept using legal loopholes and creative international accounting to move revenues from high tax jurisdictions to countries where rates are lower. As of October, Reuters reported that U. S. based companies have some $2.1 trillion parked abroad in order to avoid high domestic taxes. Apparently Apple, the world’s largest company by market capitalization, accounts for over $180 billion of this total.
The U. S. corporate tax rate of 35 percent is widely considered to be uncompetitive and even excessive when compared with Ireland’s 12.5 percent rate (and even the 20 percent in the UK). It is an old adage that capital flows to where it is treated best. Ireland rolled out the red carpet for Apple, a decision that greatly benefited both.
Apple established a company in County Cork, Ireland in October 1980, sometime before Apple blossomed financially. Since then, Apple has become one of the largest taxpayers in the world and, according to its CEO, Tim Cook, the largest taxpayer in Ireland where it employs almost 6,000 people, mostly in high paying jobs, adding great benefit to the Irish economy both directly and by encouraging copycat corporations. (A Message to the Apple Community in Europe, 8/30/16)

This post was published at Euro Pac on September 15, 2016.

Clinton’s Pay-to-Play Is the Natural Consequence of Big Government

Hillary Clinton has been taking heat for her relationship with the Clinton Foundation. Did individuals and firms making large donations to the Foundation, or paying large speaking or consulting fees to Bill Clinton, get preferred access to Ms. Clinton as Secretary of State? Is there a revolving door between the Clinton campaign and the Foundation’s fundraising staff? Are these relationships the subject of the emails she deleted from her private server?
These questions point to a more basic issue about the role of money in politics. What, exactly, do large corporations get in exchange for their campaign contributions? Ms. Clinton gave 92 speeches between 2013 and 2015 that netted her $21.6 million, including $1.8 million for just 8 speeches to large banks. (CNN provides eye-opening details about her speaking requirements – the $225,000 fee is just the tip of the iceberg.) Ms. Clinton is hardly known for her business acumen; her infamous cattle-futures trades are widely recognized as a political payoff, and her views on corporate governance have been ridiculed by experts. Her opinions on world politics are already in the public domain, so I doubt that Goldman Sachs was getting $200K worth of unique insight into global affairs. Bill Clinton, with zero experience in higher-education administration, bagged $17 million to be honorary chancellor of an obscure for-profit university. Why are these companies throwing their money away?
Most people assume that campaign contributions, speaking and consulting fees and lucrative board positions for former and future politicians, and similar payments are pure graft, the kinds of pay-to-play arrangements common under crony capitalism. And some of these transfers surely do buy access and even specific policy outcomes. There are several problems with the common assumption, however. First, research on campaign contributions finds that the expected rate of return on these payments is quite high and yet, given the potential gains, the contribution amounts are remarkably small. Second, there is little systematic evidence that policies are, on average, greatly influenced by such contributions, leading some to suggest that this form of payment to politicians and political parties is mainly consumption, not investment.

This post was published at Ludwig von Mises Institute on August 26, 2016.

11 COMMON SYMPTOMS OF THE GLOBAL DEPOPULATION SLOW KILL

‘Maintain humanity under 500,000,000 in perpetual balance with nature.’ – The Georgia Guidestones
The full-spectrum global attack on human health is quite obvious to see for anyone who is paying attention and in search of wellness. So many of the factors that are negatively influencing public heath could easily be prevented or removed from society, yet the decisions of the ruling class continue to ensure that our food supply is toxic, that our environment is compromised, and that our exposure to chemicals and industrial waste is total. Why?
With the stroke of a pen carcinogenic poisons like Monsanto’s Roundup could be banned. Industrial disasters like Fukushima or the Deepwater Horizon could easily get the attention they deserve from world powers, but the will to intervene on behalf of human and environmental health is zero, while the will to intervene militarily in corporate and political affairs is guaranteed.
People are suffering more than ever from a host of chronic conditions and illnesses that can wreck even the healthiest and strongest of us. To be sick is the new normal, and to be healthy is outstanding and unusual.
Concerned citizens are battling grass roots struggles on all fronts, yet, at the top levels of society the corruption, gross negligence, and seeming incompetence continue unabated, ensuring that important decisions always favor the health of corporations and special interests.
With such obvious disregard for life, it would be naive to presume that our national and global leadership have our best interests at heart, and also to assume that any of this could be accidental. And when we look at comments and statements from some of the world’s most influential people, a dark philosophy is uncovered, and a shocking agenda todepopulate planet earth is revealed. See for yourself:

This post was published at The Daily Sheeple on AUGUST 22, 2016.

Our Society Is Sick, Our Economy Exploitive and our Politics Corrupt

Any society that tolerates this systemic exploitation and corruption as “business as usual” is not just sick–it’s hopeless.
In noting that our society is sick, our economy exploitive and our politics corrupt, I’m not saying anything you didn’t already know. Everyone who isn’t being paid to deny the obvious in public (while fuming helplessly about the phony cheerleading in private) knows that our society is a layer-cake of pathologies, our economy little more than institutionalized racketeering and our politics a corrupt auction-house of pay-for-play, influence-peddling, money-grubbing and brazen pandering for votes.
The fantasy promoted by do-gooders and PR hacks alike is that this corrupt system can be reformed with a few minor policy tweaks. If you want a brief but thorough explanation of Why Our Status Quo Failed and Is Beyond Reform, please take a look at my book (link above).
If you want an example of how the status quo has failed and is beyond reform, it’s instructive to examine the pharmaceutical industry, which includes biotech corporations, specialty pharmaceutical firms and the global corporate giants known as Big Pharma.
I hope it won’t come as too great a surprise that the pharmaceutical industry isn’t about cures or helping needy people–it’s about profits. As a Big Pharma CEO reported in a brief moment of truthfulness, We’re in Business of Shareholder Profit, Not Helping the Sick
Here’s an excerpt from the article:

This post was published at Charles Hugh Smith on AUGUST 21, 2016.

Thanks, Barry! Only 37% of Borrowers Are Actually Paying Down Their Student Loans

In her speech at the Democratic National Convention, Hillary Clinton exclaimed, ‘ Bernie Sanders and I will work together to make college tuition-free for the middle class and debt-free for all!’ How she intends to do that remains something of a mystery, beyond higher taxes on ‘Wall Street, corporations, and the super-rich.’ But it’s hard to imagine the student-loan industry and the burden of student debt getting any worse for taxpayers and borrowers than it is now.
A largely overlooked report released in February by the Government Accountability Office suggests that the Obama administration’s policies have exacerbated student debt, which equals nearly a quarter of annual federal borrowing. With only 37% of borrowers actually paying down their loans, the federal student-loan program more closely resembles the payday-lending industry than a benevolent source of funds for college.
As this newspaper reported in April, ’43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1,’ and a staggering ’1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt.’ If student debt continues to skyrocket, the federal government may have to deal with as much as a $500 billion write-down when future defaults and loan-forgiveness programs are factored in.

This post was published at David Stockmans Contra Corner on August 17, 2016.

The Illusion Behind Stock Buybacks – -A Simple Test

A trader at the New York Stock Exchange in June. As shares have climbed, so have the prices companies pay to buy back their stock. Credit: Lucas Jackson/Reuter Stock investors have had one sweet summer so far watching the markets edge higher. With the Standard & Poor’s 500-stock index at record highs and nearing 2,200, what’s not to like?
Here’s something. As shares climb, so too do the prices companies are paying to repurchase their stock. And the companies doing so are legion.
Through July of this year, United States corporations authorized $391 billion in repurchases, according to an analysis by Birinyi Associates. Although 29 percent below the dollar amount of such programs last year, that’s still a big number.
The buyback beat goes on even as complaints about these deals intensify. Some critics say that top managers who preside over big stock repurchases are failing at one of their most basic tasks: allocating capital so their businesses grow.
Even worse, buybacks can be a way for executives to make a company’s earnings per share look better because the purchases reduce the amount of stock it has outstanding. And when per-share earnings are a sizable component of executive pay, the motivation to do buybacks only increases.

This post was published at David Stockmans Contra Corner By Gretchen Morgenson, New York Times ‘ August 15, 2016.

The US is becoming Argentina

Although many are confused by these markets, there is a simple explanation for every strange thing going on right now: The United States is rapidly devolving into a Third World country.
We’ve got the politicians to prove it. On one side is the classic insider, handing out favors to cronies and corporate big-shots while not-so-secretly covering her tracks and lining her pockets; on the other side is the classic Strongman, full of machismo, bluster, simple sloganeering, and even a trademark hair-do/spray tan combo. Just slap some epaulets and a row of chest medals on Donald’s blazer and he could easily pass for our first Yankee Generalissimo.
But the analogy goes even deeper with monetary policy, debt, and spending. We are swimming in debt and deficits, with no other plan but “even more,” which leads eventually to an Argentina-style default. Actual economic growth is anemic, while the insiders that live in Washington D. C. and environs grow ever richer on fat contracts and sweetheart legislative deals for big corporations, written by an ever-expanding minion army of lawyers and lobbyists. It’s Third World cronyism on a grand scale.

This post was published at GoldSeek on Monday, 8 August 2016.

BofA: “45% Of The Global Bond Market Is Now Compromised By Central Bank Buying”

The market’s attention this week was focused on the Bank of England’s decision to purchase 10 billion in corporate bonds over the next 18 months. By doing so Mark Carney, like Draghi, has opened up a Pandora’s box, since ultimately corporate debt is nothing more than post-petition equity, and all it would take to make the BOE (or ECB) an activist stakeholder in an legal process is for the obligor to go bankrupt. Consider the following scenarios.
The Bank of England purchases a corporate bond of XYZ British Corporation and 2 years later, the company goes bankrupt. What will the BoE do? Will it sit in the bankruptcy table and negotiate with other creditors? Does it even have the legal authority to do so? Essentially they are gambling with the taxpayer’s money. If a large foreign company wants to take over a British corporation and the BoE happens to own their debt, how will the act? Can they sell the debt into a market that is already pricing a corporate event? Will the act as an activist investor, lobbying for one outcome? What possible connection is there between economic growth and corporate purchases?

This post was published at Zero Hedge on Aug 6, 2016.

Crony Capitalism On Parade: The Dem Convention Is One Big Corporate Bribe

To get to the Democratic National Convention, you take the subway to the AT&T Station and walk to the Wells Fargo Center. Along the way, you’ll stroll by the Comcast Xfinity Live complex, where delegates and honored guests can booze it up. You’ll also see the ‘Cars Move America’ exhibit, an actual showroom sponsored by Ford, GM, Toyota, and others. Finally, you’ll reach your seat and watch Democrats explain why we have to reduce the power of big corporations in America.
Party conventions have always been collection points for big money. But many major corporations sat out last week’s Republican gathering for fear of Trump contamination. There’s no such reticence here in Philadelphia; in fact, it feels like they’re making up for that lack of investment.
It’s hard to ferret out all the special interests at the DNC, because there’s no full public schedule. Invitations are doled out individually, and people whisper about this or that event. But enter any official hotel where a delegation is staying, or any Philadelphia landmark, and you’re likely to have a complimentary drink thrust into your hand.
As Politico’s Ben White reported on Monday, private equity firm Blackstone has a meet-and-greet on Thursday. Independence Blue Cross, the southeastern Pennsylvania arm of the large insurer, held a host-committee reception Tuesday; their chief executive is the finance chair of that host committee. The same day, Le Meridien hotel had a private event for Bloomberg LP, and the Logan Hotel hosted ‘Inspiring Women, a Luncheon Discussion.’ The sponsors included Johnson & Johnson, Walgreens, AFLAC, the Financial Services Roundtable (the industry trade lobby), and New York Life. (How many people were they serving, given the number of corporations involved?)

This post was published at David Stockmans Contra Corner on July 28, 2016.