Occupy Wall Street - Page 143

On November 04 2011 07:20 semantics wrote:

Well not everyone who benefits from big money's influence on our legal system directly influenced the legal system it's just a point of illustration, what ever happened to iowa and new york prosecuting big banks hell what happened to all those statements made about people will go to jail and yet no one did.
http://www.nytimes.com/2011/07/08/business/in-shift-federal-prosecutors-are-lenient-as-companies-break-the-law.html?ref=louisestory

On November 04 2011 07:03 semantics wrote:
What this isn't a hard game to play
http://markets.financialcontent.com/stocks/news/read/19540600/Hewlett ForceRecrawl: 0
Did he earn his money?
how about all the people who participated in the housing bubble fraud and profited from it's collapse the idea that not every rich person worked hard for their money but cheated to get it isn't that out there esp post 2008
You say the deal fell though by why did he get such a deal to begin with why isn't he being prosecuted, how horrible do you have to be do get prosecuted?

On November 04 2011 08:25 Sha[DoW] wrote:
I find it ironic that the protestors are complaining about the unfairness they see in an uneven distribution of wealth, yet in the next breath they still say communism is evil....

On November 04 2011 08:25 Sha[DoW] wrote:
I find it ironic that the protestors are complaining about the unfairness they see in an uneven distribution of wealth, yet in the next breath they still say communism is evil....

On November 04 2011 08:25 Sha[DoW] wrote:
I find it ironic that the protestors are complaining about the unfairness they see in an uneven distribution of wealth, yet in the next breath they still say communism is evil....

On November 04 2011 07:12 Gnial wrote:


Why do you care if that guy "earned his money" or not? The shareholders have legal remedies for if they think he was overpaid, because ultimately it is the shareholders which are paying this guy.

Are we putting everyone who makes a huge amount of money on a stake? What if his services in that 11 month period made the company far, far more money than he was paid...

The problem with this movement is all the people who aren't focusing on the corruption issue, but stupidly get distracted by big numbers and jealousy. There are grounds for a legitimate movement, but you seem to have missed it.

On November 04 2011 10:26 aksfjh wrote:


Shareholders are more concerned with overall profit anyways. What does it matter if some guy was paid $200 million if they were able to save $300 million in layoffs and pay cuts of the lower echelons? Hell, we already see this kind of thing in a lot of industries. Firms buy out businesses, cut costs at every corner while attempting to sell the same product. Shareholders, firms, and owners make it out big during this time while the general workers get gutted in both quality of purchases and wages. If things go sour, they liquidate the property and the same people win.

Edit: 1000th post, huzzah!

On November 04 2011 10:26 aksfjh wrote:


Shareholders are more concerned with overall profit anyways. What does it matter if some guy was paid $200 million if they were able to save $300 million in layoffs and pay cuts of the lower echelons? Hell, we already see this kind of thing in a lot of industries. Firms buy out businesses, cut costs at every corner while attempting to sell the same product. Shareholders, firms, and owners make it out big during this time while the general workers get gutted in both quality of purchases and wages. If things go sour, they liquidate the property and the same people win.

Edit: 1000th post, huzzah!

TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross. My guest, Josh Kosman, predicts that we're on the verge of the next great credit crisis, not because of credit cards or student loans. The credit crisis he's predicting is from the actions of private equity firms. These are firms that buy companies, with the help of huge loans, and typically try to resell the companies or take them public before the loans come due. The companies that have been bought and sold are then often left with the debt. Kosman explores how private equity firms manage to make big profits while nearly destroying some of the companies they buy and sell in his new book, "The Buyout of America."

He says many private-equity-owned companies are defaulting on their debts, and that will mean more people losing their jobs and will have global consequences for the credit market. Private equity firms have purchased companies in a variety of industries, including hospital and nursing home chains, mattress companies, newspapers, radio stations, hotel chains and record companies. Some of the biggest private equity firms are the Carlyle Group, Blackstone Group and Kohlberg Kravis Roberts. Josh Kosman is a financial reporter for the New York Post and a former editor at mergermarket.com and a former writer for The Deal and Buyouts newsletter.

Many of them are in New York, and they are these small groups of people who raise money from - mostly from public pensions to buy companies, and they buy companies by having - just the way that you or I would arrange a mortgage. We'd put maybe 20 percent down and borrow 80 percent. But the critical difference is when they buy companies, they put 20 percent, and then the companies they acquire borrow the 80 percent to finance the deal. So then the companies are responsible for that debt. So basically, private equity firms, which is a fancy way or a nice way of saying a leveraged buyout firm, go around the country, and they buy companies using basically mortgage tactics but where the company takes the risk and not them.

GROSS: Give us an example of an industry in which there's been a lot of private equity buys, and the industry, the whole industry in a way, has been squeezed with a lot of layoffs and cuts within what the business does.

Mr. KOSMAN: Sure. An easy example is the mattress industry. Private equity firms bought Sealy and Simmons about a decade ago - actually, it's 2009, so let's say 15, 18 years ago - and then they bought and sold them between each other, but buyout firms acquired, or private equity firms - and private equity firms, by the way, I should also note, these are the same guys who were the leveraged buyout kings of the 1980s, the exact same people often, but when leveraged buyouts got a bad name, when Michael Milken went to jail, when movies like "Wall Street" were made, they underwent a marketing change and very cleverly started calling themselves private equity firms, but they're one and the same.

In the mattress industry, private equity firms bought Sealy and Simmons, the number one and number two brands by a mile. They stopped really competing against each other. They cut costs, and they raised the prices of the mattresses. They started focusing only on the top end and stopped even making mattresses really for middle-income people that cost less than $1,000. So basically simplifying this over time, as they bought Simmons and sold it to another PE firm three or four years later, and same with Sealy, the buyers -the sellers would make a lot of money, and the buyers felt, well, we can keep raising prices because there's no competition. We own Sealy, and we own Simmons. It's different firms, but they both have the same aim: to make a short-term profit, not to beat each other up on price. What happened over time was they couldn't raise the prices anymore, and the prices were raised double the price of inflation, double the rate of inflation. They cut the beds in half, so you came up with no-flip mattresses. That cut their manufacturing costs, but it also...

GROSS: Wait, wait, let's explain for a second.

Mr. KOSMAN: Sure.

GROSS: I thought great, no-flip mattresses, you don't have to go through the work of flipping it, and the bed's kind of extra-good, so you don't have to flip it, but there's another reason why you don't have to flip it.

(Soundbite of laughter)

Mr. KOSMAN: That's right. Initially, they made the mattresses thick. They kept putting - creating thicker and thicker mattresses so they had an excuse to keep raising and raising the prices. So they thought, both Sealy and Simmons both had the same thought. The private equity firms that owned them both thought, well, why don't we cut costs significantly and cut the beds in half and introduce these no-flip mattresses.

Simmons did it first, early this decade. Sealy stood back. Sealy even made a statement when Simmons did it, saying we would never offer a no-flip mattress. That's why you should buy our mattresses. Simmons's sales didn't rise, but their earnings went through the roof. The private equity firm that owned Sealy at the time, which was Bain Capital - the same firm that Mitt Romney owned during that period, the Republican presidential candidate - decided okay, well, we'll change tack. You know, even though our market share is growing, their earnings are going through the roof, and that's what we care about. So then they introduced no-flip mattresses, and now and for the last six or seven years, Sealy and Simmons only offer no-flip. There are no two-sided beds anymore.

GROSS: But are their no-flips any better or worse than the two-sided ones?

Mr. KOSMAN: Well, they certainly have less of a life. You can't flip them, so just like a tire, you know, when you rotate your tire, you know, beds that used to last 15, 20 years on average - and those were Sealy and Simmons beds - now these beds last six, seven years. So it's a much cheaper bed. And what ended up happening in the middle of this decade is Tempur-Pedic came out of nowhere. And Tempur-Pedic offered a very nice sleep on a - I guess they call it, you know, it's those foam beds, and those mattresses, on the high end, which is all that Sealy and Simmons at this point were now competing in, they started to really outsell Sealy and Simmons. And that puts - and then Sealy - for Sealy and Simmons, not only were they losing market share, now their earnings were starting to fall.

GROSS: What's the state of Sealy and Simmons now?

Mr. KOSMAN: Now they're both in a really tough state. Simmons just got bought by - went bankrupt, and it got bought by Serta. So that means Simmons, a company that's been around for more than 100 years, doesn't exist anymore. A quarter of their employees were laid off in the last year, and now - I shouldn't say - the private equity firm that owned Serta bought them and says they'll keep them independent, but that's a little hard to buy.

As far as Sealy, they were veering towards bankruptcy, and their private equity owner, Kohlberg Kravis Roberts, put in some more money in the company to keep it going, but Sealy is also having some problems, though they're probably a step above where Simmons is.

If you look at it historically, though, Sealy's market share around 1990, when the first buyout of Sealy happened, was about 28 percent. Today, they're at about 20 percent. So I certainly believe that private equity firms, you know, from the time of 1990 through today, have not done Sealy any favors, although those private equity firms, by buying and selling Sealy to each other, have generally made huge profits but in the process have hurt the business.

Mr. KOSMAN: It's really amazing. Four of the last eight Treasury secretaries are in the private equity industry. They include James Baker, include Nicholas Brady, Paul O'Neill and John Snow. And John Snow, in some ways, may be the most interesting case and show how those private equity connections can really help, where those Washington connections can really help a private equity firm. Cerberus, a PE firm, hired John Snow as chairman months after he left Bush's administration - meaning the second Bush, George W.

And GMAC - a Cerberus-owned company - and Chrysler, both got into trouble, both looked for bailout funds. And in the case of GMAC, the government, in the last days of the President Bush's administration, allowed GMAC to convert from an auto leasing company, basically, to a bank. As a bank, GMAC then could receive TARP funds. And this was even though GMAC did not have enough capital in reserve to meet typical bank holding requirements. And at the same time, much of their business was in auto financing, which is not well diversified, which doesn't make for a good bank.

And now, since they got that special status, it's amazing. The government has bailed out GMAC - I think, two or three times - to the tune of more than $12 billion to a company that, you know, arguably should have been never allowed to receive TARP money and, I would probably say, is not that important to our country. Why can't someone else set up an auto leasing business?

I can confirm Siegel's characterization of Liberty Park as being divided into almost two separate protest groups: the east side, which harbours the participants' stronghold, and then the west side where stragglers (Siegel calls them the "non-participants") tend to cluster nearby the much-debated drummers.

OWS is working to address these concerns. The movement has always had a zero-tolerance drug and alcohol policy, but the group has now also tried occasionally shutting down the free-food services in an experiment to get rid of "freeloaders." There was also some talk of adopting a work-for-food policy in an attempt to, again, weed out the people showing up for the food and not to aid the resistance.

As one original organizer of Occupy LA described it, "on one side there’s the hardcore Politicos-Get-Shit-Done process freaks and on the other are people who think they are starting a new society."

About sixty people were in attendance for the afternoon meeting. Most were young, many were Chicano, there were some purposefully well-dressed young white guys in collared shirts and ironed pants who were not camping but regularly attending meetings. There were a few older people in the group with the vibe of being life-long professional activists. About six men donned the traditional anarchist garb: pulled-up hoodie, black bandana around their face, an implacable look in their eyes.

The GA is dead!” and the crowd erupted in both celebration and shock: "We don’t want you or your fucking procedure!" One male protester, in an army helmet and no shirt, cried out as shoving matches erupted between several groups of men. The young man who was leading the informal group yelled: "This is the People’s Forum! There are no committees, there are no rules, everyone gets to speak. Get in a circle! GET IN A CIRCLE!" A majority of the crowd abided, although they were openly chastised when the circle took on non-circle shapes.

On November 04 2011 11:30 semantics wrote:
You mean this i remember hearing this interview quite awhile ago took me awhile to find it.
http://www.wbur.org/npr/120391729/joshua-kosman-predicting-the-next-credit-crisis
just parts of the interview, and it's just maddening that they can operate like this.

On November 04 2011 08:29 caradoc wrote:



It's not ironic at all.

Communism in practice is generally authoritarian. An uneven distribution of wealth also leads to a kind of tyrrany, just in a covert, informal way.

Pushing towards a more equal society where influence is diffuse and people in general have more agency are the broad goals-- nothing contradictory at all.

On November 05 2011 05:07 Keone wrote:

No, it is very ironic. The very people right now protesting are demanding Communism without even knowing it. There are so many idiots and ignorant fools protesting right now that it sickens me that so much of the nation is paying attention to them. There is work to be done and millions of things to fix on Wall St. (and thousands of corrupt people to be jailed), but this protest is just disgusting and I can't support it for the life of me. A vast majority of the idiots don't even know what they're proposing, and often call for things that if implemented, would cause the entire US to go straight into third-world poverty and destruction with rampant corruption. On top of all that, there is police brutality issues that ends up increasing the legitimacy of these protests in the eyes of the general public, when police brutality has absolutely nothing to do with Wall Street.

On November 05 2011 05:07 Keone wrote:

No, it is very ironic. The very people right now protesting are demanding Communism without even knowing it. There are so many idiots and ignorant fools protesting right now that it sickens me that so much of the nation is paying attention to them. There is work to be done and millions of things to fix on Wall St. (and thousands of corrupt people to be jailed), but this protest is just disgusting and I can't support it for the life of me. A vast majority of the idiots don't even know what they're proposing, and often call for things that if implemented, would cause the entire US to go straight into third-world poverty and destruction with rampant corruption. On top of all that, there is police brutality issues that ends up increasing the legitimacy of these protests in the eyes of the general public, when police brutality has absolutely nothing to do with Wall Street.