Meet the Military-Industrial-Wall Street Complex: Blackstone Hires General Wesley Clark

So how’s a private equity company snatching up homes all across America, pushing average citizens out of the market and then renting these homes back to the once middle class, but now indentured servitude masses supposed to hedge itself against future backlash?  Simple, put a former General and NATO Supreme Allied Commander in Europe on your payroll.  That’s exactly what Blackstone has just done.

According to Bloomberg, Blackstone has hired General Wesley Clark to “to advise on its investments in energy companies.”  This makes perfect sense since General Clark may be privy to information regarding which countries’ oil wells and refineries may be next in line or liberation by America.  From Bloomberg:

Blackstone Group LP hired Wesley Clark, the former NATO Supreme Allied Commander in Europe and a one-time U.S. presidential candidate, to advise on its investments in energy companies.

Private-equity firms hire high-ranking executives and former officials to expand relationships with corporations and governments worldwide, as well as to benefit from their industry experiences. KKR & Co., the buyout company run by Henry Kravis and George Roberts, hired former CIA director David Petraeus last month to run a new unit for public policy and economic research at the New York-based firm.

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How Hospitals Profit from Making Mistakes

One of the many things holding the nation back at the moment is the complete lack of incentive to be a creative, productive and honest member of society versus the tremendous incentive to be a corrupt, thieving, lackey for the establishment.  In a free market system, with a strict set of rules governing the game that is applied to everyone equally, market signals and incentives exist for companies to create a great product and to meet customer needs with great service.  In contrast, within a crony capitalist system, the primary incentive is to get as close as possible to political and corporate power in order to financially benefit from their oligarchical ownership of the controlled economy.

It is only within a completely disconnected from reality, crony, fraudulent economy where you could have a situation in which hospitals actually earn much larger profit margins from making mistakes and harming their patients, than from providing excellent care.  We learn from the New York Times that:

Hospitals make money from their own mistakes because insurers pay them for the longer stays and extra care that patients need to treat surgical complications that could have been prevented, a new study finds.

Changing the payment system, to stop rewarding poor care, may help to bring down surgical complication rates, the researchers say. If the system does not change, hospitals have little incentive to improve: in fact, some will wind up losing money if they take better care of patients.

The study and an editorial were published Tuesday in The Journal of the American Medical Association. The study authors are from the Boston Consulting Group, Harvard’s schools of medicine and public health, and Texas Health Resources, a large nonprofit hospital system.

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Income Growth for Bottom 90% in America Since 1966 is…59 Dollars

We’ve all seen these statistics before in one form or another, but David Cay Johnston does an excellent job going into more detail for us in an article he published late last month.  As he correctly notes, when things get extreme like this you ultimately end up with serious social unrest.  Furthermore, as I have pointed out for years and years, this kind of disparity does not happen under free markets with rules and regulations applied equally to all.  It happens under totalitarian societies, whether fascism, communism or crony capitalist corporatism (which is the model in the USA).  It only happens when a very small oligarch class takes over the political process of a nation and then uses it to game the system.

However, I would take exception to Mr. Johnston’s conclusion that the root problem is the tax system.  While I do not for one moment deny that the oligarchs game the tax system to provide loopholes for themselves, this is not why the 1% of 1% has taken all the wealth of the nation.  This is much more related to the Federal Reserve and its policies of printing trillions of money out of thin air and distributing it to the oligarchs, either directly or through low interest loans.  If you tax the rich more, they will still make more because they will still have the access to the cheap money.  The Federal Reserve is the core cancer of the entire thing and they must be stopped.  Some excerpts below:

The average increase in real income reported by the bottom 90 percent of earners in 2011, compared with 1966, if measured at one inch, would extend almost five miles for the top 1 percent of the top 1 percent.

Remember, we got off the gold standard in 1971, after which the Federal Reserve could print as much as they wanted and distribute it wherever they wanted…and they have.

Incomes and tax revenues have grown from 2009 to 2011 as the economy recovered, but an astonishing 149 percent of the increased income went to the top 10 percent of earners.

If you wonder how that can happen, the answer is simple: Incomes fell for the bottom 90 percent.

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Interview #4 with Financial Survival Network: Money Fraud, Food Fraud and More…

Yesterday, I recorded my latest interview with Kerry Lutz of Financial Survival Network.  In it, we focus on how dangerous it can be to your health and family’s well being if you aren’t acutely aware of all the food fraud out there.  It has become obvious to us both that the American economy is basically … Read more

Crony Capitalist “Uncle” Warren Buffett Drives Company Profits Using Derivatives

As regular readers know all too well, there are few people in these United States that I find more disingenuous than the mainstream media celebrated, crony capitalist extraordinaire Warren Buffett.  The man who used to warn about trade deficits, the U.S. dollar’s vulnerable position and famously called the derivatives “weapons of mass financial destruction,” has become nothing more than a political stooge for the status quo ever since he was bailed out in the financial crisis.  So with the derivatives market bigger and more dangerous than ever, you’d expect “Uncle Warren” to be shouting from the rooftops about how much risk they pose right?  Wrong.  Rather, America’s number one crony is using derivatives to drive earnings at his company, Berkshire Hathaway, and pimping stocks on CNBC like a cheap used car salesman every other day.  From Bloomberg:

Berkshire Hathaway Inc. (BRK/A) said fourth- quarter profit rose 49 percent on gains tied to derivatives wagers made by billionaire Chairman and Chief Executive Officer Warren Buffett.

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Net income rose to $4.55 billion, or $2,757 a share, from $3.05 billion, or $1,846, a year earlier, Omaha, Nebraska-based Berkshire said today in a statement. Gains on derivatives surged to $1.4 billion from $163 million.

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Mission Statement for 2013: Solutions

Ever since I launched this blog in April of last year, I have focused on exposing the rampant corruption and moral decay of our society while identifying the core cancer that is Wall Street, Washington D.C. and all the poisonous practices in between. What I have finally realized is that while there are many people … Read more

How Jack “Bailout Bonus” Lew Got to Treasury

As I and many others have pointed out for years, unless you are a crony Wall Street welfare queen you can pretty much forget about any high level position in the Obama Administration.  Barack made that clear from day one when he decided to surround himself with two of the people at the core of the 2008 financial crisis, Larry Summers and Tim Geithner.  The trend is simply continuing with the current nominee for Treasury Secretary: Jack “Bailout Bonus” Lew.  The revolving door is institutionalized and at this point as reliable as a Swiss watch.  From Bloomberg:

Jack Lew is the nominee for Treasury secretary whose own bonus as an investment banker was bailed out by the Treasury Department when it rescued Citigroup Inc. (C) in 2008.  He owes much to America’s taxpayers. He should also be grateful to Citigroup for agreeing to let him rejoin the government without suffering much for it financially.

An intriguing revelation from Lew’s Senate confirmation hearing last week was that he stood to be paid handsomely by Citigroup if he left the company for a top U.S. government job, under his 2006 employment agreement with the bank. The wording of the pay provisions made it seem, at least to me, as if Citigroup might have agreed to pay Lew some sort of a bounty to seek out, and be appointed to, such a position.

Of course he is close to one of the biggest snakes in the grass in modern American history, Robert Rubin.

He joined Citigroup in 2006 as chief operating officer of its global wealth-management division. Lew was recommended by former Treasury Secretary Robert Rubin, who at the time was chairman of Citigroup’s executive committee. (There seems to be an unwritten rule that every Treasury secretary must have deep ties to Rubin.)

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It’s About Time: JP Morgan Enters the Housing Slumlord Trade

It was just a matter of time before the most powerful crony capitalist bank in America decided to join the housing trade.  Making money running the food stamp program just wasn’t enough for Your Crony Highness Jaime Dimon and company, it’s time to join his financial oligarch brothers in the bidding war to corner the housing market and become your overlord.  That way they can control how you eat (food stamps) and where you sleep.  It’s become very clear what the large financial interests in these United States are attempting.  Funnel all the low interest crony American money, with a dash of Chinese laundered money, into the “housing recovery.”  From Bloomberg:

JPMorgan Chase & Co. (JPM) is giving its wealthiest clients the chance to invest in the single-family rental market after other investments linked to the U.S. housing recovery jumped in value.

The firm’s unit that caters to individuals and families with more than $5 million, put client money in a partnership that bought more than 5,000 single family homes to rent in Florida, Arizona, Nevada and California, said David Lyon, a managing director and investment specialist at J.P. Morgan Private Bank. Investors can expect returns of as much as 8 percent annually from rental income as well as part of the profits when the homes are sold, he said.

The bank’s wealthy clients are joining a growing number of private-equity firms and individuals buying rental homes in the regions hardest hit by the U.S. housing crash. Blackstone Group LP (BX) has spent $2.7 billion, and said last month it accelerated purchases as home prices rise faster than anticipated. Even after home values in November gained by the most in six years, investors are wagering on rental properties as an alternative to housing-related stocks and mortgage debt that’s already soared.

The strategy is similar to institutional buyers including Blackstone, the world’s largest buyout firm, Thomas Barrack’s Colony Capital LLC, and Oaktree Capital Group LLC. (OAK) They’re aiming to profit from low prices on distressed properties, often those in foreclosure and sold at auction — and the demand for rentals from people who don’t want to own a home or can’t qualify for a mortgage.

Now here’s where the article gets really interesting.

“It’s hard to find a private-equity firm on the planet that doesn’t have a strategy in this space,” Gary Beasley, chief executive officer at Waypoint Homes, said last week at the American Securitization Forum’s annual conference in Las Vegas. The Oakland, California-based company has bought homes in California, Arizona, Illinois and Georgia.

Sure seems like the right time to buy housing.  You know, after every single pool of aggressive private capital in the nation and abroad is already bidding.

Now take a look at how poor the returns are.  This is what happens when things get too crowded.

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The Stock Market: Food Stamps for the 1%

The price of anything is the amount of life you exchange for it.
– Henry David Thoreau

Society is like a stew. If you don’t stir it up every once in a while then a layer of scum floats to the top.
– Edward Abbey

When the rich wage war, it’s the poor who die.
– Jean-Paul Sartre

The Stock Market:  Food Stamps for the 1%
For most of the past four or five years, I have spent the majority of my time studying the dominant forces that fuel the power structure that exists in these United States today, and indeed throughout the world.  My education began quite suddenly and unexpectedly in the middle of the last decade when I started understanding fiat money, Central Banking and the global monetary system.  Since then, I have expanded my understanding to mainstream media brainwashing, the military-industrial complex, the role of the political oligarchs in Washington D.C., the corruption of the food industry under the complicity of the FDA itself and much more.  The more I peered under the curtain, no matter what the industry, the clearer it became that the system had no chance of survival under its current form.  What’s worse, it became obvious that the very small 0.01% of the population that I call oligarchs (financial and political), who are actively gaming the system for their own pleasure, are well aware of the system’s terminal nature.  That’s why they are rapidly putting in place the police state grid.

That said, this article is not about the implementation of the surveillance state.  I cover that pretty much daily these days.  This post is more of a philosophical stream of consciousness; a guilty pleasure that I have not engaged in as of late.

I have mentioned many times in the past that food stamps are just a payoff to the poor.  While I think a permanent and expanding welfare state is completely and utterly destructive to an economy and culture, I do not demonize these folks.  The vast majority of them would like to work and be productive.  They are victims and this is being done to them quite intentionally.  It creates dependency.  It keeps them off the streets.  It’s an unspoken bribe plain and simple.  The oligarchs do not want angry, roving, hungry masses on the streets while they strip mine what’s left of the economy.  Food stamps, disability and all sorts of other freebies take care of this segment of the population as the oligarchs continue on with their crimes and prepare for the day of reckoning (hence the surveillance grid).

However, the oligarchs have another problem to deal with.  This problem is the huge group of people that resides in between them and the poor.  Ideally, they would like to shove all of them into the poverty category and keep them barely alive and on dole of the government.  That way, the politically connected large corporations that do not pay taxes and receive bailouts can continue to pay them peasant wages while the government takes care of the rest.  It’s a win-win.  The situation I just described is exactly what is happening as we speak and has been occurring at an ever frequent pace since the coup of 2008.  This is exactly why people are buying guns, gold and are extremely negative on the economy and the future of the United States.  I recently discussed this in my post Gallup Poll: Americans Most Negative on the Nation and Economy in 30 Years.  If you read the Gallup data in detail you will see that this level of negative readings only occur during very bad economic times.  The average person can feel themselves getting poorer despite the nonsense spewed by the mainstream media.  Their standards of living don’t lie and no amount of false statistics can change that.  As John Adams famously said:  Facts are stubborn things.

Stubborn indeed; and this is where the stock market comes into play.  Banana Ben Bernanke has not made it a secret that he is directly targeting a higher stock market with his purchasing power destroying money printing.  He has made that clear from pretty much the beginning.  The idea is that a higher market will improve the balance sheets of pensions, individual retirement accounts and also create a psychological impact that will make people feel confident and thus boost the economy.  It is the last point that is of course most important. If the latter does not happen then the boost in stock prices is merely an unsustainable bubble that will burst and all the “good” that was done to balance sheets will be undone with a vengeance at some point in the future.  The latter did not happen.

As much as people like to talk about the 1% versus the 99%, the real winners since 2008 have been the oligarchs.  The 0.01% have benefited much more than any other class in terms of both money and power.  It’s the 0.01% versus everyone else and the quicker we recognize that, stop fighting amongst ourselves, and push them aside the better it will be for our species.

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