Bain shareholders did fine. Workers? Not so much UPDATED
For many good reasons, the GOP has so far resisted going after President Obama full-bore on the issue of gay marriage. Instead, they’ve tried hard to keep the message on jobs and the economy.
But the ad by the Obama campaign, below, focusing on Mitt Romney’s leadership of Bain Captital, is what Republicans are up against on that count. The real campaigning hasn’t even started yet. This makes it appear as if it will be a long summer.
And below is the video the Romney campaign responded with, about Steel Dynamics, for which Bain used $37 million in government subsidies and grants to get off the ground:
May 14, 2012 - 2:31 PM
You’re pimping White House ads now?
And people criticize Fox News because they think it is partisan.
Those workers need to invent some “family lore” about being Indian then open a casino and they would all be rich.
My wife is 1/8th Cherokee. My kids are 1/16th. Nevertheless, there is no Casey Casino in our future. You make it sound easy, terps. It’s far from that. There are no tribal casinos in Virginia, and by agreement with the federal government, there won’t be any.
#2 If you only could see what it is like in S.D. I had a chance to do a gig or two in that area got to meet some fine folks from the Lakota tribe. They keep telling me about this book and film, called, Powwow Highway. It showed really what was going on.
It is hard to understand that a citizen of a State that historically categorized anyone with a drop of African blood as Black or a drop of Native American blood as native American and used such status to discriminate against them would attempt to discredit a person receiving affirmative action aid because of it. Not to mention that the person qualified as a minority simply by being female. It has only been in recent years that Hispanics are no longer considered white and that those with minute percentages of black or Native American Heritage are considered white. Perhaps the more accurate criticism should be for the applications in which Ms. Warren listed herself as white based on the laws of most States.
Terps, if you think all Naative Americans are rich due to casino’s, you need to a little research.
Make that, Native.
Dan
We need to sue for discrimination. Why do 1/16th Indians in Connecticut get to get rich off casinos while we are stuck here in Virginia unable to scam the system? Virginia is famous for Indians. Pocahontas herself was a Virginian.
How about we hire Bowers as our lawyer and I will be the developer with a 20% cut. There will be plenty left over for you and your beautiful bride. We can build off the theme of that topless bar you like so much and make it a topless casino. Lets call it Topless Tonto’s and see if we can get the Redskins to come visit.
Powow Highway is an excellent film. I highly recommend it to everyone.
People criticize Fox News because Fox News claims to be “fair and balanced” and they are bitterly partisan. You like them though, so lay off Dan. It remains his blog, not yours.
#8 terps commented, “Pocahontas herself was a Virginian.”
Where in the name of everything that is sane have you learned history?
Pocahontas’ father was Powhatan – therefore she too was Powhatan, NOT Virginian. There was NO Virginia when she was born… her father was the chief king of the Powhatan confederacy of Algonquin tribes in the Tidewater region of what would eventually become Virginia.
Talk about an ethnocentric view of Native Americans…not to mention horrifically and politically incorrect…
I betcha that terps also believes the Canarsie Indians were New Yorkers.
Sandi
I’m glad Dan is a partisan liberal and that his blog is biased. He is also a great writer and a lot of fun. I would be bored to death on a conservative blog. I would have to go check Dan’s temperature if he ever went after a liberal or propped up a conservative on this blog. I just wish everyone besides Dan would lighten up a little bit. Most of this stuff(especially the Indian banter) is pretty funny and Dan usually gets that.
And Hillary, Pocahontas deserves to be an honorary Virginian and only someone who discriminates against women and Indians would want to exclude her.
Terps, I was responding to Henry.
Although now that you mention it, I would want someone to check your temperature if you ever went after a conservative or propped up a liberal on this blog, so I guess we are even.
I happen to adore Elizabeth Warren and I have for years. We should be honored that people like her want to be in our crappy Congress. We would be lucky to have her.
And terps, for what it is worth, I enjoy sparring with conservatives like you. You do not have a death grip on insults, just partisanship and I see that you do respect the blog and Dan. Agreement is not necessary; decency is. Despite what I am accused of, that is all I want.
#13 posted, “And Hillary, Pocahontas deserves to be an honorary Virginian and only someone who discriminates against women and Indians would want to exclude her.”
terps, terps, terps, you can’t wiggle out of your post, but that is a valiant attempt nevertheless…
I don’t think Dan is a liberal. I think he is a Party man. That’s why you don’t see a lot of anti-war stuff out of Dan. His man is in the White House running the war, running Gitmo, killing people with drones. He has to be silent as a little mouse now.
A couple of problems with 0bama’s story.
GST went bankrupt in 2001, two years after Romney left Bain. Ooops.
When Bain Capital took over the company in 1993, it was hemorrhaging money and losing market share. Market forces and increased competition eventually forced GST to declare bankruptcy, but Bain Capital probably kept the Kansas City plant going for as long as it did.
But hey. What are a few more lies from 0bama? Certainly nothing that would concern the MSM.
Henry hasn’t been paying attention.
#17 Wow, Henry, you either don’t read Dan’s posts or you are purposely lying. Which is it?
We’ll wait for your reply.
How about the heartbreaking truth here? This may be a political ad, however, it happened. Bain Capital under the leadership of Mitt Romney put up a small percentage of money and leveraged a buyout of a 100 year old American Company, immediately paid themselves back 40 million and then continued to bleed the company dry and now you and I are paying the pensions Romney and Company cheated these hard working Americans out of.
Elect Romney and give him a GOP congress and who will pay our SS or pensions?
Nobody. It’s truly like Gordon Gecko decided to run for president. Thinking this Mr Burns just might be our next president scares the crap out of me.
Henry obviously has ADD. He can’t pay attention, has never paid attention, and won’t ever pay attention.
When was the last time Dan posted an article criticizing the president on the war? How often does he post articles criticizing a Republican for anything?
Yeah, thought so.
I’m glad Dan is a partisan liberal and that his blog is biased. He is also a great writer and a lot of fun. I would be bored to death on a conservative blog. I would have to go check Dan’s temperature if he ever went after a liberal or propped up a conservative on this blog. I just wish everyone besides Dan would lighten up a little bit. Most of this stuff(especially the Indian banter) is pretty funny and Dan usually gets that.
I too thought this was just about the perfect place back when Dan didn’t allow all viewpoints on all topics without allowing his personal politics or ego to get in the way. In fact, I raved about it all the time.
Unfortunately, it’s not that way today. It’s pretty much like most other blogs in terms of his protecting liberals and deleting posts that violate no rules just because he disagrees with them.
The one plus is he still allows some colorful language.
What you CANNOT dispute is that Bain Capital WITH Romney bought GST, then after they took it over they borrowed a large amount of money against GST Steel (used it as an asset), Then they basically “cashed out of the deal and left the banks with the risk”. Bain executives “used part of the borrowed money, roughly 36,000,000 to recover their investment, and to to pay themselves bonuses”.
This is how this “game” works, they swoop in, rob assets, recoup their investment and make money, then kill the company. GST had been in business for over 100 years and 750 people lost their livelihood and retirement savings. There is NOTHING good about that story and Willard Romney most assuredly shared in the profits and KNEW what was going to happen to GST in the end. It was simply “what he did”.
AND their “earnings” are taxed (at most) the 15% capital gains.
Nice profitable work if you have no conscience.
That’s how the game is played. They recoup their investment and make a profit.
Oh, that’s horrible. They recouped their investment and made a little profit. Sandi thinks businesses should operate at a loss.
Sounds like Romney prolonged the life of a company that was headed for bankruptcy in 1993. Romney likely kept those 750 people employed for several years longer than they would have been. And Mitt stepped down a full two years before GST closed. But I guess blaming him is a lot like blaming Bush for 0bama’s $14 trillion spending spree.
Sandi, you’re against the free market working and greed, you’ve said that. You also could not come to terms with the idea that most people who got in a mess with those home loans are, themselves, to blame. Another great example of failure of personal responsibility came to me over the weekend. I’ll share:
A friend from high school (who has awful credit and no earthly business spending big money on a car) called me saying his wife was about to buy a car, “a 2010 Honda S….. something? Is $13,000 a good deal?” I told him I couldn’t even place a Honda model that started with S…..???? He called the wife and found out it was a Hyundai Sonata. I told him to comp it on Kelley Blue Book or Auto Trader’s websites. His wife could do this, but is simply too lazy. So I comped it. $13,000 looked like an okay deal, but I asked him the terms. “Between $300, but less than $400″ was his answer (for monthly payment). I said “For how long?” he said “I’m assuming five years.” They were putting a few thousand down too. Geez! He called me back with an exact payment, I crunched the numbers and came up with a 22% interest rate for that deal! I told him this was a bad move and that he would pay for the car twice, but saw, while comping it another Sonata a few years older with barely any more miles at all for $4,888! That certainly looked worth checking into. Nah, that was of no interest to the wife. The one she wanted was shiny, looked new, and there was $1,500 of injury settlement money burning a hole in her pocket. He told her to hold off on buying it as the deal sounded bad after thinking it through. Yesterday, I get a call that he was buying a 2012 Ford Focus for $22,000! They would finance it for “12.9%” for six years. After rolling in their down payment, it was higher interest still, but it was a monthly payment-driven decision all the way and the shiny new red Focus was too much to resist.
They wanted to get away from their 2002 Chevy Cavalier because, supposedly, it was TOO SMALL. So they buy a same-size, if not smaller, Focus?!?!?! Sure, they could have put the couple thousand into the Cavalier making it a better car and saved a huge amount of sorely needed cash each month, but new and shiny won out. I even told him the monthly payment would buy them a $70,000-80,000 house (where they live, that’s a nice place!). If they’re going to get a higher-interest C paper loan, geez, do that instead! Their trailer’s roof collapsed in the snow last winter and they’re permanently temporarily living with a relative…… no, the shiny new car was top priority. They have non-work-related travelling to do!
This is a sad true story that I feel certain will end in financial disaster. Many of the folks buying houses were JUST like these people. Despite telling him EXACTLY and EXPLICITLY how bad each deal was, and how much to set aside for maintenance, he went forward anyway thinking only of the short term.
The point being that disclosure, education, and honesty will only stop a few of the people who make bad deals. It’s hard for us to believe because everybody on this blog is too smart to make deals like these and ARE the small minority that a little education or disclosure would stop.
Bad decisions like his are the problem, not the car dealers, not the manufacturers’ ads on tv, not Wall Street. The foreclosure epidemic is from people who make decisions like he does.
John Wilburn, let me guess: your friend always votes Republican, right?
28.”John Wilburn, let me guess: your friend always votes Republican, right?”
No, he’s too sorry to vote. It’s not been my experience that people this sorry vote Republican either. Most of them don’t vote.
Yes Suzie, It is horrible, that some vultures swoop in and pretend to help a company then recoup their money, plus a VERY HEALTHY profit, scavenge the bones and then sell them all down the river. Bain capital actually made MORE money on the companies they gutted than on companies like Staples. They are NOT job creators, they are vultures who pick the bones of struggling companies.
No I do not think a business “should operate at a loss”, I think a business should be left alone if all you are going to do is scavenge off them.
You are only proving your blind partisanship to pretend Romney was EVER about jobs or profit for ANYONE except himself.
Of course if you are incapable of seeing the truth about Bush, there is no hope you will see it about Romney either. Typical and pathetic.
John Wilburn, I have never said I was “against the free market working and greed”. I am against an unregulated market and unbridled greed that has to hurt us all to be ‘fed’. There is a difference. Bill Gates created a great product and deserves his riches. Willard Romney was a LBO vulture who hurt people and companies in business for over 100 years to get his.
I have not “come to terms” with the YOUR “idea that most people who got in a mess with those home loans are, themselves, to blame”. I, having done unbiased research found that it was a scam perpetrated on a gigantic scale and had MANY players TELLING people they could afford this great “investment”. You do not have the integrity to admit that, perhaps because of your career as a real estate broker, perhaps because you do not like the truth. Either way, it remains the truth. It was a legislated ‘free for the greedy’ binge that cost those homeowners the most, and they are virtually the ONLY ones who lost anything.
Of course there are examples of personal failure, but that seldom happens in a vacuum either. It is just more convenient for people like Suzie and you to pretend it does.
You “point” be “that disclosure, education, and honesty will only stop a few of the people who make bad deals”, but MY point is that “disclosure, education, and honesty” had very little to do with many home deals during the boom and it has very very little to do with car sales.
Blaming the victim does not mitigate the behavior of the vultures and you know it.
No I do not think a business “should operate at a loss”, I think a business should be left alone if all you are going to do is scavenge off them.
GST willingly entered into an agreement with Bain because it was better than the alternative. Without Bain, GST goes bankrupt 7 years earlier. Why do you want those workers to lose their jobs earlier, Sandi?
Frankly Idiot Boy has a lot of nerve talking about job loss. He’s lost at least TWO MILLION net jobs since entering office. You just prove your blind partisanship if you excuse that, hon.
#23 Dan has quite clearly posted his opinion strongly disagreeing with Obama on this topic — and he’s done so many times. As I said, you either aren’t paying attention or you’re lying, Henry. Neither one would surprise me.
#24 Oh, good lord, suzie’s whining again because she’s the most deleted person on this blog — and always with good reason. And then when she gets really pouty and says she’s leaving for good because Dan hurt her poor widdle feelings, she still comes back because she gets so lonely and starved for attention.
“The foreclosure epidemic is from people who make decisions like he does.”
John, John, John…
Great link Art. Too bad too few will take the time to click and read.
However, many will have no problem finding the time to vote for a vulture capitalist.
Not only did Bain Capital borrow money against companies equities, siphon off the assets, and bankrupt them leaving lenders and employyees holding the bag. At the same time they underfunded employee pension plans and walked out leaving the taxpayers holding the bag to make those funds solvent, at a greatly reduced pension level for the employees. And this was done while Bain stockholders and corporate execurtives pocketed millions and millions of dollars. They should be prosecuted for fraud.
gdad
Too bad she’s not only the most deleted person on the blog, but also deleted period.
Art, as far as Wells Fargo steering borrowers to higher rate loans, that is where laon shopping comes in. There was and still is an enormous amount of competition. Car dealers up-sell, home builders up-sell, but lenders had to compete. Fraud is unfortunate and is in all kinds of different businesses, but the vast majority of your local lenders where the public obtained their loans, are honest.
Sandi:
“You do not have the integrity to admit that, perhaps because of your career as a real estate broker, perhaps because you do not like the truth. Either way, it remains the truth. It was a legislated ‘free for the greedy’ binge that cost those homeowners the most, and they are virtually the ONLY ones who lost anything.”
You clearly know NOTHING about my integrity and even less about what really goes on in my business. I’ve lost a LOT with this market! So have the vendors like pest inspectors, builders, remodelers, home inspectors, marketing people, et al. When qualified buyers can’t borrow because the banks’ money is tied up in inventory and sellers can’t sell because THEY are over-extended, we cannot profit on either end. By the way, the average house price didn’t go down here but about 10-15% at the most. The majority of the people in a jam were the ones who borrowed way too much of their equity in cash AFTER THE SALE and then couldn’t afford to bring enough of it back to the table to sell. I’ve seen way too many HUD (settlement) statements with things like credit card payoffs and hot tub dealer payoffs to think a lot of folks weren’t misusing the equity they had while they could draw it out. A lot of vacations and new cars came from house equity too, that a more responsible seller would never have taken out.
You would be surprised how few true victims like you describe there actually were. Sure there were a few and I sincerely feel for them, but they’d all probably tell you they were if you asked them. Fortunately for us, the truth comes out at contract time.
It bother me that you assault my integrity when I have gone after predatory lenders on a couple of occasions where I’ve caught them trying to take advantage of a client. I’ve also counseled buyers, sometimes preventing them from making a disastrous buy when it would have profitted me, but hurt them. I’ve turned down “free” leads from those slimy online lenders because I refuse to refer them. Next time you’re itching to question someone’s integrity, find someone who doesn’t run a clean business.
. At the same time they underfunded employee pension plans and walked out leaving the taxpayers holding the bag to make those funds solvent.
Who made the decision that government had to subsidize these union steel workers?
And nobody will answer the question. If Bain’s involvement was such a bad deal, why did GST agree to it in 1993, and what was the alternative had it not been for Bain Capital?
“The real reason that we should be concerned about private equity’s expanding power lies in the way these firms have become increasingly adept at using financial gimmicks to line their pockets, deriving enormous wealth not from management or investing skills but, rather, from the way the U.S. tax system works. Indeed, for an industry that’s often held up as an exemplar of free-market capitalism, private equity is surprisingly dependent on government subsidies for its profits. Financial engineering has always been central to leveraged buyouts. In a typical deal, a private-equity firm buys a company, using some of its own money and some borrowed money. It then tries to improve the performance of the acquired company, with an eye toward cashing out by selling it or taking it public. The key to this strategy is debt: the model encourages firms to borrow as much as possible, since, just as with a mortgage, the less money you put down, the bigger your potential return on investment. The rewards can be extraordinary: when Romney was at Bain, it supposedly earned eighty-eight per cent a year for its investors. But piles of debt also increase the risk that companies will go bust.”
Read more http://www.newyorker.com/talk/financial/2012/01/30/120130ta_talk_surowiecki#ixzz1v26w7jyF
They are vultures and they are fed first. That is not smart business it is scavenging for profit on the livelihoods of Americans. They are not investors, they are vultures. And oddly enough the tax structure they funded by buying politicians, helps them out. If America votes for this vulture, we are toast.
What Bain Capital did wasn’t illegal, but there’s absolutely nothing about vulture capital success that informs anything at all about governing a country. If anything, Romney’s success at Bain makes him LESS qualified to be President.
JohnW, your posts are reaching SharonNesque proportions.
John Wilburn, I did not “assault” your “integrity” and I would like to know how the hell I or anyone else would “know” you “have gone after predatory lenders on a couple of occasions where I’ve caught them trying to take advantage of a client. I’ve also counseled buyers, sometimes preventing them from making a disastrous buy when it would have profitted me, but hurt them. I’ve turned down “free” leads from those slimy online lenders because I refuse to refer them.” I do not believe you have stated that before, not even when we had this discussion last time.
Also, the truth about any group is not the truth about an individual. Just like the rating for Congress is in the teens, yet plenty of people keep re-electing “their” Congress member.
Stop whining, I did not “question” your “integrity”. I stated documented facts about the industry and I speculated as to why you would deny that documented truth and that DOES show a lack of integrity on your part.
http://www.ushousingupdate.com/top_10_reasons_for_american_housing_crash.htm
Quite a few of the “Top Ten” are directly related to the Real Estate Industry practices.
Having said that, I will grant you that on your claim, you have not been “part of the problem” within your industry. Since I am accepting that and not asking you for any evidence or proof of you claim. I think that should be enough to soothe your bruised integrity.
Some food for thought to add to the mix…
“Minority homeowners have been disproportionately affected by the foreclosure crisis and stand to lose homes at a faster pace than white borrowers in the future…
Housing experts have pointed to a variety of factors to explain the disparity, including higher unemployment rates in minority communities and traditionally fewer financial resources for black and Latino borrowers to fall back on.
But the Center for Responsible Lending’s study found that the disparate foreclosure rates also apply to well-to-do homeowners. High-income black borrowers, for example, were 80 percent more likely to lose their homes to foreclosure than their white counterparts, while Latino borrowers were 90 percent more likely.
Research has shown that minority borrowers were more likely to receive subprime loans during the housing boom even if they had credit scores, incomes and loan sizes similar to those of whites. Some housing experts say that minority borrowers received higher rates on subprime loans compared with similarly situated white borrowers, resulting in higher monthly payments and quicker defaults.”
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/18/AR2010061802885.html
Sandi:
“You do not have the integrity to admit that, perhaps because of your career as a real estate broker”
You’ve questioned my integrity before. It’s not cool with me because I sacrifice to do the right things daily and haven’t earned the criticism no matter how much you dislike me or want to jump on hating my profession’s bandwagon. As for going after predatory lenders, the most memorable of which was a lender who made the purchasers a 103% loan with the sellers paying the buyer’s cloing costs. This was a typical loan for the day that would have been acceptable and life would have been good for everybody. When the buyers came up with 3% on their own mid-stream of the transaction (and admitted it, no less), rather than simply changing to a 100% loan and have the buyers pay closing out of pocket with a certified check at closing, this slimy lender had the seller AND buyers paying the closing costs which totaled over $11,000 on a house under $200,000! The list of last-minute, pure BS fees was outrageous. Who could known so many sanitized synonyms for theft?! I held the closing up and made a huge issue of it until it was resolved. I provided censored copies of the HUD statement far and wide and while I may have risked being sued by the lender, I was confident that their actions were indefensible. I didn’t think anyone would trust them again and they went under in short order. Undoubtedy they were burning others too and it caught up with them.
I also caught a slimeball lender out of South Carolina just last year trying to gouge VA loans in this area. He would work swiftly to get unsuspecting vets to ink outrageous good faith estimates. He wanted over $8,000 in fees from my client and, while I can’t prove it because he didn’t get my guy, I think he was going to try to essentially steal the funding fee since my client was a disabled vet and their fee is waved… of course the clients don’t always realize that. I put the word out on him too!
I did NOT recommend either of these lenders. They found the clients or the clients found them. These crooks are NOT representative of the industry. The vast majority of them are honest and work very hard to close loans on time and at competitive rates.
And yes, Sandi, I’ve turned down 100 lender leads if I’ve turned down 1 because most lenders are honest, but the dirty few market aggressively. I’d rather make ends meet and be able to sleep at night that work with them.
Sorry, Kristen, but my posts dipped into OT because there was a lot to say.
By the way, contrary to popular opinion, predatory lenders seem to at least be non-discriminatory in my experience and will swindle people of any color, nationality, sexual orientation, male, female, ANYONE they can. That’s just what I’ve seen, anyway.
I appreciate the clarification John Wilburn and I accept that your integrity seems above reproach in an industry where that cannot always be said. I salute you for it. Now, if you could come clean on the industry (and I am sorry, but the lenders, appraisers, inspectors et al ARE part of the industry), we could consider the matter closed. Not accepting the truth is simply not acceptable.
37: “Not only did Bain Capital borrow money against companies equities, siphon off the assets, and bankrupt them leaving lenders and employyees holding the bag. At the same time they underfunded employee pension plans and walked out leaving the taxpayers holding the bag to make those funds solvent, at a greatly reduced pension level for the employees”
In addition to all the abuses that Dave listed, one of the seldom noted aspects of the LBO model that Bain used is that it creates a forced capital gain cashout for small investors, who include many employes (through ESOP’s) as well as traditional “buy and hold” value investors, for whom a lower stock mutiliple is tolerable longer, except for the very fact that the share price may become low enough to interest takeover pirates. Such LBO’s are a big money power play that forces an involuntary sale by small equity owners who are not part of the insiders aquiring the company and sharing the spoils. As such they pervert the ability of the market to price a company for longer term value. This has even sometimes been done repeatedly with the same company, using leverage to take a company private, draining liquid assets for the benefit of the deal insiders, then taking the company public again, for another insider payday on the IPO.
multiple
Warren is right and Bain Capital did such a “multiple” dip with Simmons.
“Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.”
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=2&pagewanted=all
“employees” and “acquiring”!!!
“Now, if you could come clean on the industry (and I am sorry, but the lenders, appraisers, inspectors et al ARE part of the industry), we could consider the matter closed.”
Sandi, it’s a very small part of the overall industry and probably more honest overall than HR people and journalists. The matter is closed. I’m not the one accepting the bad apples, I purposefully work against them.
Minority homeowners have been disproportionately affected by the foreclosure crisis and stand to lose homes at a faster pace than white borrowers in the future..
No sh*t, Hillary. Unqualified borrowers were given special consideration because of their race as the result of Clinton’s legislation, so why the hell would you be surprised those same blacks defaulted.
“No sh*t, Hillary. Unqualified borrowers were given special consideration because of their race as the result of Clinton’s legislation, so why the hell would you be surprised those same blacks defaulted.”
This is true. People have more in common along economic lines than they do along racial lines anyway. Some racial lending preference did result in more foreclosures for that race. I still say lenders aren’t racist on average, as even the crooked ones will prey on people of any race.
The only color most financial people have ever cared about was green
http://www.huduser.org/Periodicals/CITYSCPE/VOL2NUM1/yinger.pdf