How Mitt Romney made his money?

[Bird222]

In 8 steps no less.

http://www.youtube.com/watch?v=rodifJlis2c

 

[a777pilot]

LOL!

That little man is just pissed off that he didn't do this.

Everything that little man just stated is true and legal. More power to these investors and capitol managers. The bottom line is those companies that survive are way more efficient and in total there are more jobs and a better economy due to the efforts of people like Mr. Romney.


Remember that this Fool, Bobo, the Post Turtle, is running on two main issues this fall: Re-distribution of wealth and Racism. That is because there is no way he can run on his record.

 

[werepossum]

Robert B. Reich is truly a Renaissance man, able to demonstrate abject stupidity in a stupendous number of ways. My favorite is when he held up a screwdriver and said "as a workman might use this pliers" but this one is good too. My favorite here is how he asserts borrowing money makes the company more profitable because the interest is deductible (thereby assuming the company pays a rate in excess of 100% since the interest is deductible from profits.) Think about it, when you pay back a loan some portion of the payment is interest and some is principle. Therefore only a portion of what goes out is deductible. When you deduct this portion from your earnings, it offsets that portion of the profit you would have paid in taxes. Even if your loan payments were interest only and your tax rate were 100%, your company could not be more profitable.

Usually I'd just file this away as yet another Marxist going after the votes of the weakest minds, but I believe Reich might honestly be this stupid.

 

[Lemon law]

Face the facts, Romney is a corporate raider, and makes his ill gotten gains by screwing people.

And least Ron Paul, Santorum, and Gingrich only sell a phony fantasy, Romney is the real deal as he not sells not only a even bigger fantasy, as Romney is well on his way to selling out America and then making sure all American assets end up on his pockets in the overall fast shuffle.

Its been the overall Romney track record as he now tries the greatest scam in US history.

 

[woodie1]

LOL!

...snip.....


Remember that this Fool, Bobo, the Post Turtle, is running on two main issues this fall: Re-distribution of wealth and Racism. That is because there is no way he can run on his record.

That pretty much sums it up alright.

 

[a777pilot]

Face the facts, Romney is a corporate raider, and makes his ill gotten gains by screwing people.

And least Ron Paul, Santorum, and Gingrich only sell a phony fantasy, Romney is the real deal as he not sells not only a even bigger fantasy, as Romney is well on his way to selling out America and then making sure all American assets end up on his pockets in the overall fast shuffle.

Its been the overall Romney track record as he now tries the greatest scam in US history.

LOL!

I guess you would still have the USA economy making buggy whips.

 

[Fern]

Face the facts, Romney is a corporate raider, and makes his ill gotten gains by screwing people.
-snip-

That's BS.

You don't even know what a corporate raider is.

Fern

 

[ohnoes]

Robert B. Reich is truly a Renaissance man, able to demonstrate abject stupidity in a stupendous number of ways. My favorite is when he held up a screwdriver and said "as a workman might use this pliers" but this one is good too. My favorite here is how he asserts borrowing money makes the company more profitable because the interest is deductible (thereby assuming the company pays a rate in excess of 100% since the interest is deductible from profits.) Think about it, when you pay back a loan some portion of the payment is interest and some is principle. Therefore only a portion of what goes out is deductible. When you deduct this portion from your earnings, it offsets that portion of the profit you would have paid in taxes. Even if your loan payments were interest only and your tax rate were 100%, your company could not be more profitable.

Usually I'd just file this away as yet another Marxist going after the votes of the weakest minds, but I believe Reich might honestly be this stupid.

corporate bonds are usually interest only during the life of the bond. Principal is repaid when the bond matures.

As for his reference to increasing valuation (he used "profitability") due to debt & tax shields , it's true. Firm valuations increase when you increase debt levels because it reduces your taxes and what you pay to the gov't. This means that more of the value of the firm can be captured by debt & equity holders. A slightly more technical explanation is that increasing debt levels decreases your Wacc, which then would increase the NPV of the firm's free cash flows.

 

[Lemon law]

LOL!

I guess you would still have the USA economy making buggy whips.

----------------------------------------------------------------------------------------
Well if Romney had his way and had Obama had not saved the US auto industry, A777 pilot, making buggy whips would be all the American economy would have left.

As methinks a777, you just opened your mouth and inserted your own foot.

 

[Dulanic]

This is the exact thing that happened to my wife's company. They cut benefits, didn't give raises for years after being bought up by a private equity firm. Finally they sold the company and fired half the workers. She has made it through but is in the middle of accepting a different job offer so she can finally give a big fuck you to the new owners.

 

[xj0hnx]

and had Obama had not saved the US auto industry,

BWAHAHAHAHAHAHAHAHA, now that's just too damn funny!!!!

 

[Jhhnn]

corporate bonds are usually interest only during the life of the bond. Principal is repaid when the bond matures.

As for his reference to increasing valuation (he used "profitability") due to debt & tax shields , it's true. Firm valuations increase when you increase debt levels because it reduces your taxes and what you pay to the gov't. This means that more of the value of the firm can be captured by debt & equity holders. A slightly more technical explanation is that increasing debt levels decreases your Wacc, which then would increase the NPV of the firm's free cash flows.

Which is what Reich said, in different terms, but the ravers know everything- ask 'em, they'll tell you.

Same song, different verse-

http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1&pagewanted=all

It's played out many, many times all over America, but Righties can't figure it out, because they're in thrall to the Lootocracy.

 

[ohnoes]

I don't think private equity in & of itself is bad. Buying poorly run companies or to realize economies of scale/scope across a portfolios of companies is a pretty good idea. It's just when they lever up and suck up the cash flows of a healthy firm that things get dicey.

 

[Zebo]

LOL!

That little man is just pissed off that he didn't do this.

Everything that little man just stated is true and legal. More power to these investors and capitol managers. The bottom line is those companies that survive are way more efficient and in total there are more jobs and a better economy due to the efforts of people like Mr. Romney.


Remember that this Fool, Bobo, the Post Turtle, is running on two main issues this fall: Re-distribution of wealth and Racism. That is because there is no way he can run on his record.

It's funny to me how ppl can rationalise treating others like shit. Well, your rationality to me is no different than "greater chain of being" practiced in the middle ages. You may dress it up with fancy new language called economics but its same ole hocus pocus.

 

[a777pilot]

----------------------------------------------------------------------------------------
Well if Romney had his way and had Obama had not saved the US auto industry, A777 pilot, making buggy whips would be all the American economy would have left.

As methinks a777, you just opened your mouth and inserted your own foot.

NO way. If the government had not stepped in a bailed out the auto makers. Those companies that were inefficient would have gone away and those remaining would have been smaller more efficient putting out a better product. All the Bobo Administration did was use taxpayer's money to bail out the unions....not the auto companies.

The system works if the government stays out of the system.

 

[a777pilot]

It's funny to me how ppl can rationalise treating others like shit. Well, your rationality to me is no different than "greater chain of being" practiced in the middle ages. You may dress it up with fancy new language called economics but its same ole hocus pocus.

How and who do you think produces jobs and wealth in a nation? I'll give you a clue....It's not the government. The best the government can do is play referee and keep the playing field level.

 

[a777pilot]

I don't think private equity in & of itself is bad. Buying poorly run companies or to realize economies of scale/scope across a portfolios of companies is a pretty good idea. It's just when they lever up and suck up the cash flows of a healthy firm that things get dicey.

Why?

If that cash is not "working" why should it be left alone?

 

[ohnoes]

underutilized cash flows are an issue, but there's also the potential for conflicting incentives. Investors want to recover their capital as quickly as possible, but by increasing the debt burdens of a firm, it can also weaken the competitiveness of the firm.

 

[CLite]

Which is what Reich said, in different terms, but the ravers know everything- ask 'em, they'll tell you.

Same song, different verse-

http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1&pagewanted=all

It's played out many, many times all over America, but Righties can't figure it out, because they're in thrall to the Lootocracy.

Meh, I already think money shufflers are a virus, that article doesn't give me much reason to change my mind.

 

[JS80]

Robert B. Reich is truly a Renaissance man, able to demonstrate abject stupidity in a stupendous number of ways. My favorite is when he held up a screwdriver and said "as a workman might use this pliers" but this one is good too. My favorite here is how he asserts borrowing money makes the company more profitable because the interest is deductible (thereby assuming the company pays a rate in excess of 100% since the interest is deductible from profits.) Think about it, when you pay back a loan some portion of the payment is interest and some is principle. Therefore only a portion of what goes out is deductible. When you deduct this portion from your earnings, it offsets that portion of the profit you would have paid in taxes. Even if your loan payments were interest only and your tax rate were 100%, your company could not be more profitable.

Usually I'd just file this away as yet another Marxist going after the votes of the weakest minds, but I believe Reich might honestly be this stupid.

I was going to go with political hack (which we all know he is). We all know he's not this stupid. I hope.

 

[Jhhnn]

underutilized cash flows are an issue, but there's also the potential for conflicting incentives. Investors want to recover their capital as quickly as possible, but by increasing the debt burdens of a firm, it can also weaken the competitiveness of the firm.

And when there's a downturn, a dip in demand, a credit crunch, the weakened firm goes under. Leverage is great on the way up, but it's a death trap going in the other direction. Ask former house flippers, whose business model is much the same as Bain's. It's based on the greater fool theory. It's why our economy is as fragile as it is- sooner or later, no greater fool can be found, and somebody has to eat the losses.

 

[1prophet]

LOL!

That little man is just pissed off that he didn't do this.

Everything that little man just stated is true and legal. More power to these investors and capitol managers. The bottom line is those companies that survive are way more efficient and in total there are more jobs and a better economy due to the efforts of people like Mr. Romney.

That's why I could never understand why Jesus was so upset with the moneychangers in the temple, after all they were legally practicing capitalism with the blessing of the government.

 

[Pens1566]

What is "he was born with it" Alex?

 

[LegendKiller]

How and who do you think produces jobs and wealth in a nation? I'll give you a clue....It's not the government. The best the government can do is play referee and keep the playing field level.

People like Romney don't build wealth, they destroy companies and wealth for the bottom by sucking away jobs for the benefit of the capital structure. They take good companies, saddle them with tons of debt and fire half of the people, making them poorly run and overworked.

Look at a company like Realogy. $7bn in debt, $1.5bn in equity, and gobs and gobs of people laid off. They then "restructure" the debt, allowing Apollo to buy up huge amounts of debt at distressed rates, then convert it to equity to cash out even more.

What, exactly, has this done?

1. Screwed employees.
2. Screwed institutional investors (401k, pensions...etc).
3. Hidden the company behind a huge $7bn tax shelter.
4. Enriched the top 0.1% even more, all at the detriment of everybody else.

LBOs and most P/E shops don't do dick for the economy. Furthermore, most studies show that they don't even return that great of return for most investors.

So really, what are they? They are ways for uber-wealthy fund managers to hide wealth and utilize Carried Interest tax schemes to build massive amounts of wealth at the top while siphoning it out of the bottom.

Do yourself a favor, take a look at the Forbes 400 list from, say, 1980. now look at it and figure out how many more are fund managers and/or inherited wealth rather than wealth creators.

The sad thing is, you're fucking clueless as to what they are actually doing.

 

[a777pilot]

That's why I could never understand why Jesus was so upset with the moneychangers in the temple, after all they were legally practicing capitalism with the blessing of the government.

The question/issue was not what they were doing but where they were doing it.