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Monday, December 19, 2011

Mitt Romney Continues to Make Mad Money Off of Bain Capital

Posted by on Mon, Dec 19, 2011 at 12:55 PM

You should read this New York Times story about Mitt Romney's Bain Capital retirement scheme:

In what would be the final deal of his private equity career, he negotiated a retirement agreement with his former partners that has paid him a share of Bain’s profits ever since, bringing the Romney family millions of dollars in income each year and bolstering the fortune that has helped finance Mr. Romney’s political aspirations.

The arrangement allowed Mr. Romney to pursue his career in public life while enjoying much of the financial upside of being a Bain partner as the company grew into a global investing behemoth.

This is important, because it makes Bain Capital a live issue for Mitt Romney in this campaign, not something he did in the past. Bain makes a lot of its money by liquidating businesses and laying off employees of businesses they acquire, and Mitt Romney makes his fortune from Bain. If Occupy Wall Street continues to be a force through the general election, this could permanently tie Romney to everything that the 99% hates about the 1%.

 

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11
@10, nowhiners, negative, it is an all too common troll practise (and chatbot practise) to waste everyone's time by constantly demanding links.

Especially when they subjects have been "out there" forever and in incredible quantity, and with the existence of fifty quite excellent search engines.

When a troll says they can't find something when they Google it, you know it's best not to respond...
Posted by sgt_doom on December 20, 2011 at 10:35 AM · Report this
10
@8 Thanks for providing something specific regarding the net impact of PE firms. I'll take a look. Lazy-brained troll is unfair - the onus is on the OP to cite something to support their claim.
Posted by nowhiners on December 20, 2011 at 7:58 AM · Report this
9
Important here also to make the crucial statement that the high cost of healthcare in the USA is a subset of the economic meltdown (as is the high cost of college, and related financial events, etc.).

The hedge fund ultra-leveraged speculation (although any speculation is financially damaging) across all areas of the healthcare sector, along with private equity leveraged buyouts (by Bain, Blackstone Group, and many of those thousands of other private equity firms) across the healthcare sector, has greatly increased the costs from an external context.

Just look at the $680 billion in structured loans the top ten banks gave to the PE firms between 2005-2007, then look at the activity by these PE firms as well as related healthcare hedge funds (around 90 or so at that time).

The numerical correlations are absolute!
Posted by sgt_doom on December 19, 2011 at 6:29 PM · Report this
8
When lazy-brained trolls say, "please show the data" they can very well look it up themselves as there's been no shortage of studies done against the economic raping and pillaging done by those private equity leveraged buyout thieving outfits. Just look at SEIU's study on PE firms, as well as the Danish tax study on what the buyout of TDC did to Denmark's tax base, and why Germany outlawed such LBOs; as I said, too many studies to bother mention for the trolls.

Bain makes a lot of its money by liquidating businesses and laying off employees of businesses they acquire, and Mitt Romney makes his fortune from Bain.

More importantly, it should be mentioned how those leveraged buyouts (LBOs) are done, as well as mentioning that many of those layoffs also incorporate the offshoring of those jobs elsewhere, and along with the offshoring of jobs goes a piece of the GDP.

Typically, the PE firms like Bain, Blackstone Group, Carlyle Group et al., put down 10% or less while borrowing 90% or more, from banks, using the target purchase/company as their collateral. (Imagine telling the bank you required a loan for an auto or house, and you were going to use that auto or home as your collateral!!!!!)

The majority of those loans taken out by the PE banksters are structured finance-type loans, meaning securitized financial instruments, i.e., credit deratives, are involved, in other words, they are taking out loans -- debt -- based upon debt (and who knows just how mutil-layered said debt is?).

The private equity banksters (Bain, Blackstone, Carlyle, KKR, etc.) take out further loans against said target company (realize the target company has already been saddled with the original purchase loan) in order to pay the PE banksters a nice salary and bonus for having thoughfully -- and continuously -- saddled the target purchase with more and more debt.

If this doesn't sound bad enough, there are frequently, if not always, far more horrible ramifications: (1) tax avoidance as typically the financing and payouts to the PE fund investors and managers is done through an offshore finance center (an SPV, special purpose vehicle, etc.), and then when the company looks really, really bad, it turns out it frequently isn't (and this is the gravely subtle point few realize or understand) difficult to unload said debt-riddled company, headed for bankruptcy, as naked credit default swaps have been bought against its demise, adding considerable further "legal" -- albeit unethical and thieving, profits to the Private Equity gangstas and their confederates involved in these financial schemes.

Yup, there's a whole bunch of underlying circuitous background layers taking place, which destroys the tax base of whatever locale, country, etc., said leveraged buyouts take place, while destroying commerce, jobs, and further dismantling the economy.

The chief tools for dismantling an economy, while enriching the fraudsters, are hedge funds (ultra-leveraged speculation with no oversight involving mass tax avoidance/evasion), and private equity leveraged buyouts, along with jobs offshoring.
More...
Posted by sgt_doom on December 19, 2011 at 6:24 PM · Report this
Phoebe in Wallingford 7
@3: So what? I lost a job in 2010 due to corporate restructring and Bain was not involved.
Posted by Phoebe in Wallingford on December 19, 2011 at 3:14 PM · Report this
Will in Seattle 6
Which part of Outsourcing == Lost US Jobs don't you GET, @5?
Posted by Will in Seattle http://www.facebook.com/WillSeattle on December 19, 2011 at 3:02 PM · Report this
5
So you're saying Bain is a NET destroyer of jobs? Please show the data. It makes headlines when a company restructures then fires a large group all at once. Individual hirings due to injections of capital from companies like Bain are incorrectly ignored.
Posted by nowhiners on December 19, 2011 at 1:47 PM · Report this
OuterCow 4
As long as there's still time to remind everyone where Goldman Sachs Presents Barack Obama got most of his financial advisors from, I guess that's cool.
Posted by OuterCow on December 19, 2011 at 1:44 PM · Report this
Fnarf 3
See, this is how the 1% got that way, by the sweat of their brow. Or, perhaps, by having millions of dollars roll in every year for doing nothing, nothing, nothing at all.

@1, tell that to the thousands of former employees of KB Toys or Clear Channel, who were laid off after Bain bought them. That's what Bain DOES: buy companies, ditch thousands of employees, sell on.
Posted by Fnarf http://www.facebook.com/fnarf on December 19, 2011 at 1:42 PM · Report this
2
I'm curious, how will Occupy Wall Street be a force in the general election when they don't support elections and no politician will directly acknowledge them?
Posted by sisyphusgal on December 19, 2011 at 1:35 PM · Report this
Phoebe in Wallingford 1
Bain also makes money from its successful business clients that grew its employees.
Posted by Phoebe in Wallingford on December 19, 2011 at 1:32 PM · Report this

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