The New York Times Wants More Control Over Private Equity Firms. More Fascism on Order

Abstract: The New York Times advocates strict rules for private equity firms who would buy failed banks. These ‘rules’ would require higher capital ratios and prevent selling off parts of such banks for three years and restrict loans to certain groups. Such restrictions would make the investments unwise as the rules prevent an arena of level competition with other banks. The underlying basis of this is the continuing trend toward a governmental blend of Fascism and socialism with Marxist undertones whereby the government wishes to control the use of capital even if they cannot confiscate it as they did with the banks.  They await the moment to institute a 100% inheritance tax so they can grab more loot. Our economy is busted and we are in massive debt—too much to ever recover—so the government is looking to control the banks that are going down by placing draconian rules for private equity firms that might buy these zombie banks. Our deficits will force the national debt to soar to 25 trillion soon not counting toxic assets still held by banks.  Hyperinflation is the only solution out of this mess and the government is printing money as fast as it can and will soon fulfill this prophecy.

The New York Times, aka the Walter Duranty Papers[1]^[2] is a propaganda machine that has a single focus: to form public opinion to support any far left-liberal legislation or policies that may arise from time to time and to redact and reconstruct history to show that such programs in the past have been successful and beneficial to our citizens. Much favor goes to the far left such as Cuba and some obscure but poisonous African Marxist countries and, currently, to curry the favors of Hugo Chavez and give every opportunity for another Marxist, Manuel Zelaya, to take over Honduras and reinstate the puppet. Working against both the Honduran Legislature and the Honduran Supreme count, this Marxist Manuel Zelaya was attempting to circumvent the current four year term limit and become a dictator like Hugo Chavez. President Obama, with probable desires in that direction[3] and the New York Times immediately rushed to the far left side to support their politics on the first day of his exile.[4]

This newspaper exhibits very narrow and primitive views of government in its analysis and endorsements of all legislation and government policies.  This paper is 100% behind socialized medicine of the one-payer monolithic sort, 100% behind state sponsored abortion on demand, and 100% behind the reduction in population growth in the US. They are 100% behind legalization of dope, sloth, sodomy with children or animals and want to give amnesty to illegal aliens [criminals] who steal Social Security numbers to get jobs then fail to file tax forms. The costs of healthcare cannot be contained politically without rationing and old white people are going to be the first to find out that their healthcare services has been truncated since they cost the most of all citizens as they reach the end of their lives.

The NYT also facilitates any new control thrusts into the private workings of business and calls for massive government control of private assets where possible. In today’s episode, we find the left calling for more rules and regulations [read direct government control in the standard Fascist manner] of private equity investors. They know that perhaps 1000 banks will fail in the next few years and the left want to control who buys these banks and control how they use the capital. This is Fascism at its finest.

The Times and the Quest for More Capital

“When a bank fails, the preferred course of action by the Federal Deposit Insurance Corporation is to sell it, quickly, to a healthy bank. That protects the insurance fund and, by extension, taxpayers, because a sale is considerably less costly than liquidation. But with several hundred banks poised for failure in the months to come, there may not be enough ready buyers to clear out the anticipated inventory.”[5]—Editorial New Rules for Private Equity NYT, Published: August 30, 2009  [Emphasis is mine in all quotes.]

We can all note that the reason that many banks have failed is based on the law that they were forced to give out phony mortgages under the CRA [the phony Community Communist Reinvestment Act][6][7] to unworthy buyers or illegal aliens with little or nor credit and frequently with no jobs and that this contributed to the collapse of the credit markets and precipitated dozens of bank failures. The phony mortgages were bundled and sold as ‘investments.’ Fanny Mae was the toilet where bad loans could be flushed and Franklin Del Ano Raines[8] made a cool $90,000,000 dollars off this scam. Oh, he is black and works for Obama [or did during the campaign]? Oh, yes. This was all a grand vision of Greenlining.^[9]How many illegal aliens have subprime mortgages? 5  million?? Oh, yes and they can mostly all vote. How nice. The government wants the taxpayers to pay for all of this as usual. Now, they want to count these parasites in the census.

The immediate response to the fact that mortgage loans were in default was to soak the taxpayer and ‘adjust’ the principle and interest payments [31% of income] downward to keep dead beats, dopers and many others in their ‘homes.’ This was egalitarian.  This is a psychosis. The base theory here is that when markets rise the government receives tax monies and subsidizes housing for the ‘poor.’ When markets decline the government is expected to make up the difference for those who can not or will not make mortgage payments by taxation or printing money. This is free housing—if you are ‘poor’ or an illegal alien you don’t have to make mortgage payments.

This is also Bolshevism and we can look to the past for systems like this:

"....But my hatred of Bolshevism and Bolsheviks is not founded on their silly system of economics, or their absurd doctrine of an impossible equality. It arises from the bloody and devastating terrorism which they practise in every land into which they have broken, and my which alone their criminal regime can be maintained...."— Text of Winston Churchill's July 8th, 1920, British House of Commons, Amritsar Massacre Speech By Winston Churchill  given July 8th, 1920[10][11] [Emphasis is mine in all quotes.]

This form of equality is both a farce and an excuse to grab power. [12]

So it goes but now the continuation of the collapse of our economy [and the world’s] [13] from massive debt is proceeding at a swift pace.[14] Thus, the frenetic scramble is on for loot and just where do you get money to fund what is now some strange blend of Marxism, Socialism and State Capitalism, formerly known as Fascism? Why, it is spread out in the banks and 401(k)s! These banks have depositors, but the actual money is secured in bank deposits. Why would the lefties want more ‘rules’ for the banks—particularly the ones that are going down? According to the fluff, we read:

The Ominous Warning! The Capitalists are Here!

“This is the crunch moment for which private equity firms have been waiting. The firms have long styled themselves as saviors, able and willing to spend billions of dollars to buy failed banks. The problem is, they are not banks and their partners don’t act or think like traditional bankers; they have thin track records running banks, and they do not want to be regulated as banks.

They are private firms, whose partners and investors have thrived on high-flying and highly leveraged deal-making. Many have amassed great wealth, but too often, they have reaped big gains while saddling their acquisitions with debilitating debt. Normally, private equity firms would not be anyone’s first choice to run a bank. But they have a lot of money and the government is going to have a lot of banks to sell.”-- Editorial New Rules for Private Equity NYT

The capitalist vultures are circling the rotting carcasses of the banks. They do have a lot of money. The government wants to control this money. These two paragraphs are loaded with spite, fear mongering, propaganda and more and even some useful information. First, we must review for the readers the long love affair between the New York Times and the Communist Manifesto as they are married in spirit and song. In particular we need to look at this section of the Manifesto:

“Modern bourgeois society, with its relations of production[read capita ed], of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past, the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule.”—Communist Manifesto 1848.

And, to take a peek into State Capitalism or Fascism we need to read this:

“The Nazis [read State Capitalists and what Obama is thinking about] viewed private property rights as conditional upon the mode of use. If the property was not being used to further Nazi goals, it could be nationalized. Government takeovers and threats of takeovers were used to encourage complance[sic] with government production plans, even if following these plans cost profits for companies.”[15]

How much of this fits in the New York Times Prattle of the Day?

Where is the basis for assuming that private equity groups are mean, nasty and out to rip people off? This churlish attitude comes from those who built the gulags and reeducation camps of the communist empires. The tone of the language here is like the tone used in the Manifesto when they discuss bourgeois society with their and… gigantic means of production and of exchange. Capitalism now has its ‘crunch moment??’

Clearly, the projection here is that those people with capital will buy up things and we all know that the banks are failing and that our government has stuck them with massive loses from phony mortgage deals and other social spending that sank them in toxic assets.  Obama also sought to cut off primary debt bondholders from their investments in GM and Chrysler too. This is the first time in US bankruptcy history that bond holders did not get their primary obligations paid off before the unions and some Italian auto maker. That grab was Fascist! Ignore the laws and take the money and support your political allies [unions].

The idea that banks are for sale and that private equity groups are not to buy them begs the question of who should buy them?? No answer for that one from the NYT.  But here is what the Times likes:

“Last week, the F.D.I.C. ably navigated that problem with new rules that seek to safeguard the insurance fund — and taxpayers — while inviting in fresh capital. Under the rules, private-equity-run banks would be required to maintain substantially larger capital cushions than traditional banks, and would be barred from selling an acquired bank for three years. That helps to compensate for private equity’s scant banking track record and to ensure that buying a bank is not just another get-rich-quick proposition. The rules bar the acquired bank from lending to companies affiliated with the new owner.”

This set of ‘rules’ does what to investors? This is an invitation? Well, while the government is hungry for ‘fresh capital’ it wants to put these investors in a definite bind and put them at a disadvantage with other banks not yet bankrupt.  Larger tier-1 capital requirements mean that capital is tied up thus the efficiency of capital utilization is lower.  Thus, such buyers would be at a competitive disadvantage in the banking business. We can wonder if the government idiots at F.D.I.C. understand this. Since they are mostly college rejects, as are almost all government employees as Ronald Reagan advised us, they probably don’t and are content to sit in a fog and collect their pay and bennies. If these new purchased banks then fail and the stockholders are wiped out does the extra capital become government property?

There is a three year hold rule and that locks useful capital into some time vault.  Again, this is inefficient and trappy.

The Times now gives us a test to prove their point:

“Private equity firms should view the requirements as an opportunity to show that they can be responsible bankers. If they don’t bid for failed banks because the rules don’t suit them, the F.D.I.C. must not take that as a sign to loosen the rules further. Rather, it would signal that private equity firms are indeed unsuited for banking — a business that has a public purpose and regulatory obligations, along with the potential for profits.”

Note the Fascism here. The public purpose condition here from the left matches perfectly with the Nazi “private property rights as conditional upon the mode of use.”  Thus this purchase of a business and property comes under the purview and surveillance of government and gives government the power to stop the sale. We can only wonder what the word ‘responsible’ means in the Marxism lexicon of the NYT.

The government has tried to peddle the toxic assets before with some unknown, but failed plan by Tim Geithner[16][17]  [tax cheat].  Here is what he was talking about:

Timmy Geithner mumbles about: "… a process of providing a market for the real estate-related assets that are at the center of this crisis. Our objective is to use private capital and private asset managers to help provide a market mechanism for valuing the assets.”[18][19][20]-- Except from Geithner Feb. 10, 2009.

There is currently no way to assess toxic assets and thus reset the banks balance sheets to some semblance of reality. The banks cannot sell their toxic assets as this will tip their balance sheets into the red. [21]The banks that will fail are known as zombie banks. We are mired in debt along with the banks and only an auction of such ‘assets’ would reveal their true worth. [22] The government is printing money and driving down our currency value and there is no limit to their spending in sight.  Inflation is the next big step in government planning.[23] According to Warren Buffet massive inflation[24]is the only recourse.

From a previous blog:

We still don’t know how large this zombie toxic asset pool might be valued. Since they dumped the Mark to Market Accounting[25] the banks do not have to declare the very low value of their holdings [if they are low or very low] and can, in some instances, maintain their asset levels at the level that mortgages and other loans were originally issued. There is no way to determine what these are worth until banks put them up for auction and we watch the sales price.  There is no such market now. If they go for 95 cents on the dollar then fine, but what if they auction off at only 5 or 10 cents on the dollars? Down go the banks again as they are insolvent. The number of bank failures is rising rapidly. Some think 1000 more banks will fail in the next two years.[26][27]

Your government, now trending toward Fascism, has decided that it cannot entice private equity to buy up toxic assets[28]at public auction [or is afraid to do so] so it now wants certain ‘rules’ to be put in place as perhaps a thousand banks go down in the next 1-2 years. Business people are not that stupid unless they are certain types of Methodists or have peculiarly profitable businesses in California.  Your government is so hungry for your cash that I wonder if they want to use healthcare reform to curtail care for the old folks and then take their wealth [and their lives] with a 100% inheritance tax, the dream of Ted Kennedy:” The estate tax is the most progressive of all federal taxes.[29]—T.K.”]  and then utilize  ‘managed’ health care run by the government where they can withhold care [e.g., Death Panels[30]] from the wealthy oldies, let them croak and then seize their assets.[31] They can grab at about 300 billion dollars annually if this becomes law. This notion and theory comes directly from the Communist Manifesto: 3. Abolition of all rights of inheritance.[32] And, we know what reverence the New York Times has for Marxism, Walter Duranty, and Castro, Chavez, Ortega and others of the far left.

Private equity firms must reject these ‘rules’ and fulfill the threat that their refusal to buy into this mess taunted by the NYT. The far left government of the US is now mixing and blending Marxism with socialism and Fascism.[33] They have all this power and also the power to print money which they are doing in high style. But, the mountains of private capital are still coveted by our government and they need to impose the Fascist notion of private property rights as conditional upon the mode of use. The 401(k)s of the old folks are the next target. That is the essence of the propaganda message from the editors from the Times says today.

Conclusion:

There are two major problems for private equity firms in buying into zombie banks: [1] the government is hostile and forces the buyers to accept draconian rules and [2] the actual value of the toxic assets in these banks [the reason for them going down] is unknown because there is no market to sell them. If equity firms buy banks and sell off these toxic assets the government will howl and seek revenge. The only thing to do is to prepare for massive inflation and let the government print more money and buy up the zombie banks.

rycK

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