There is nothing wrong with either venture capital or private equity, they are the cornerstones of constructive destruction in capitalism. The public also doesn't care that you can make millions from this. What they hate is the fact that these people can make these massive incomes, but are taxed at less than half the rate everyone else in America is. The tax rate doesn't even have the appearance of fairness, which is the reason the poor and middle class teabaggers are running away from Mitt in droves.

Nothing is wrong with either, and Romney was good at his job at Bain. But PE in the form of LBO's does not create jobs so he shouldn't be bragging about it.

That article is a lot of words which make a valid, yet pointless, criticism of imprecise language used by the media. Rest of the shiat is still true.

80% or more of Republican voters vote that way because they think that they have a better shot at being in the 1% or are in fact already part of the 1%.

As if the media will actually degrade their understanding of the world. RIght.

DammitIForgotMyLogin: WTF Indeed: There is nothing wrong with either venture capital or private equity, they are the cornerstones of constructive destruction in capitalism. The public also doesn't care that you can make millions from this. What they hate is the fact that these people can make these massive incomes, but are taxed at less than half the rate everyone else in America is. The tax rate doesn't even have the appearance of fairness, which is the reason the poor and middle class teabaggers are running away from Mitt in droves.

There's something seriously farking wrong with the idea that somebody can take out a loan to buy a company, put that loan on the books of the company and strip its assets to make a quick buck before it collapses

That's farking disgusting.

That would be almost fine by me, but they get a tax break doing it, which is bewildering.

skullkrusher: That article is a lot of words which make a valid, yet pointless, criticism of imprecise language used by the media. Rest of the shiat is still true.

It isn't pointless because the two terms are wildly different. If most people knew that venture capital mostly funds early stages in new businesses to create jobs and that private equity firms buyout firms leading to job cuts they would be for the former and against the latter. Mitt Romney gets a kind of pass because his firm is labelled as venture capital, when it does nothing of the sort.

CPennypacker: Nothing is wrong with either, and Romney was good at his job at Bain. But PE in the form of LBO's does not create jobs so he shouldn't be bragging about it.

They may not create jobs but they can save jobs. PEs are really only looking at underperforming companies. They can be saddled with ineffective management, debt, or lacking of focus. Those companies would fold if keeping on that trajectory. PEs will either revamp the company and save the jobs or slash and burn the dead weight which were jobs that were going to end when the company folded anyway.

Saiga410: CPennypacker: Nothing is wrong with either, and Romney was good at his job at Bain. But PE in the form of LBO's does not create jobs so he shouldn't be bragging about it.

They may not create jobs but they can save jobs. PEs are really only looking at underperforming companies. They can be saddled with ineffective management, debt, or lacking of focus. Those companies would fold if keeping on that trajectory. PEs will either revamp the company and save the jobs or slash and burn the dead weight which were jobs that were going to end when the company folded anyway.

False

Mugato: If people actually knew anything about what goes on economically in this country, 98% of the country would not vote Republican and of the remaining 2% at least a small portion of them would feel guilty about it for a couple seconds.

If people actually knew what they were talking about, instead of conjuring bullshiat from their anus or simply repeating easily disprovable talking points that were also conjured from the anus of the person who formed them, 98% of the country would stop posting said bullshiat on message boards, and 1.9% would feel bad about all the bullshiat they had posted over the years.

The remaining .1% would be Mugato, Weaver, and Cameroncrazy.

struct: skullkrusher: That article is a lot of words which make a valid, yet pointless, criticism of imprecise language used by the media. Rest of the shiat is still true.

It isn't pointless because the two terms are wildly different. If most people knew that venture capital mostly funds early stages in new businesses to create jobs and that private equity firms buyout firms leading to job cuts they would be for the former and against the latter. Mitt Romney gets a kind of pass because his firm is labelled as venture capital, when it does nothing of the sort.

I think it is pointless because it doesn't change the circumstances of his past business dealings, it just points out that the word the media often uses is the wrong one.

I don't think the average person who confuses VC with PE or thinks that they can always be used interchangeably reads anything into one over the other.

CPennypacker: False

Go on.....

struct: DammitIForgotMyLogin: WTF Indeed: There is nothing wrong with either venture capital or private equity, they are the cornerstones of constructive destruction in capitalism. The public also doesn't care that you can make millions from this. What they hate is the fact that these people can make these massive incomes, but are taxed at less than half the rate everyone else in America is. The tax rate doesn't even have the appearance of fairness, which is the reason the poor and middle class teabaggers are running away from Mitt in droves.

There's something seriously farking wrong with the idea that somebody can take out a loan to buy a company, put that loan on the books of the company and strip its assets to make a quick buck before it collapses

That's farking disgusting.

That would be almost fine by me, but they get a tax break doing it, which is bewildering.

1 - when they take out the loan, the creditors assess the likelyhood of being paid back. Not all PE purchased firms 'collapse'. If they did, or even a significant percentage of them did, it would make it much more difficult if not impossible to get buyout loans. This whole notion that PE firms just buy companies to pull cash out and leave a wasted carcass in bankruptcy is a blatant falsehood. That happens sometimes, sure, but given that PE funds generally invest in many businesses, some of them not doing to well to begin with, this should be expected.

2- What tax break are you talking about? If they buy a corporate entity (and most PE targets retain their corporate structure after acqusition), corporate income taxes are paid on any earnings. The effect of corporate taxes on future earnings is considered when a PE firm sells the entity after its been 'cleaned up'. So investors are not getting a tax break - they pay 35% corporate income tax (or have their value affected by corporate income tax), and a 15% cap gains tax on disposition.

If you are talking about PE employees' and partners' paying cap gains tax on their cut of the profits in excess of that which they receive from their proportional equity investment, then you are right that it is an unfair tax break IMO

Saiga410: CPennypacker: False

Go on.....

Prime target companies for LBO transactions, which are the contentious transactions Bain participated in, are companies with stable cash flows, low debt, hard assets, and value-priced stock. They look for the potential to secure cheap debt against the hard assets and the potential to come in and cut costs via layoffs or operational changes to boost cash flows

Karac: Saiga410: CPennypacker: Nothing is wrong with either, and Romney was good at his job at Bain. But PE in the form of LBO's does not create jobs so he shouldn't be bragging about it.

They may not create jobs but they can save jobs. PEs are really only looking at underperforming companies.

Bain said differently, as leas according to TFA: "I If you look at the press releases of the companies Bain bought that eventually went bankrupt, they don't say these companies are in dire straights, Kosman points out, they say they are profitable companies. "

Underperforming /= dire straights. You can make a profit and have your market cap be close or under your capital valuation. That happens when you should be doing better but you aint and you lose stock market favorability.

WTF Indeed: There is nothing wrong with either venture capital or private equity, they are the cornerstones of constructive destruction in capitalism. The public also doesn't care that you can make millions from this. What they hate is the fact that these people can make these massive incomes, but are taxed at less than half the rate everyone else in America is. The tax rate doesn't even have the appearance of fairness, which is the reason the poor and middle class teabaggers are running away from Mitt in droves.

So why blame Mitt for paying the taxes that he owes? At least he is better than Rangel and Geitner who don't pay their taxes.

Want to whine, go after the people who write the tax code (wasn't Rangel on some committee or something?)

Mentat: The term private equity simply refers to equity that is not public, like stocks. Venture capital - the practice of investing in the early stages of a company - uses nonpublic equity and is therefore a form of private equity. However, most similarities stop there.

Ok then.

To summarize the article: People refer to Bain as a VC company. VC is a private equity firm. But private equity refers to things other than VCism. So it would be wrong to refer to Bain as a VC firm. Except that Bain does VC work in addition to other private equity projects. Romney worked on VC matters at Bain. Non-VC private equity activity benefits the rich, and Romney doesn't want you thinking that. Did Romney work on private equity projects that weren't VC? We're not telling. Hey, did we tell you that Romney's really rich?

The stupids go all the way to 11 on that one.

Farking Fark, making me defend Romney. Grr.

Garet Garrett: VC is a private equity firm

Dammit, Bain is a private equity firm.

Oversimplification? In my MSM? Say it ain't so...

I'll just stick with the older but more accurate term "corporate raider". That's a lot more descriptive of what Bain did to functioning companies than "private equity", which is a meaningless term.

/which is probably why they changed the term

mrshowrules: Corvus: tenpoundsofcheese: Want to whine, go after the people who write the tax code (wasn't Rangel on some committee or something?)

But mitt supports that for the tax code. Mitt thinks people like him pay too much at his 15% rate. So then why can't we blame him and the rest of the GOP who support this tax BS?

If you are poor or middle-class and criticize the 15% tax rate, you are self-serving and dabbling class-warfare.

If you are rich and criticize it, you are a hypocrite because you could donate that money to the consolidated revenue fund if you wanted too.

Summary: no one can criticize the 15% with any credibility.

You can complain that the 15% rate is too high and punishing the Job Creators for their success.

CPennypacker: Nothing is wrong with either, and Romney was good at his job at Bain. But PE in the form of LBO's does not create jobs so he shouldn't be bragging about it.

Thank u. I didn't want to read another article on how rich farkers get more rich..

DammitIForgotMyLogin: WTF Indeed: There is nothing wrong with either venture capital or private equity, they are the cornerstones of constructive destruction in capitalism. The public also doesn't care that you can make millions from this. What they hate is the fact that these people can make these massive incomes, but are taxed at less than half the rate everyone else in America is. The tax rate doesn't even have the appearance of fairness, which is the reason the poor and middle class teabaggers are running away from Mitt in droves.

There's something seriously farking wrong with the idea that somebody can take out a loan to buy a company, put that loan on the books of the company and strip its assets to make a quick buck before it collapses

That's farking disgusting.

It's theft. but if that was (wink wink) nit the plan (nudge nudge) it's perfectly legal.

and so a company that was properly invested in and most likely could have been saved with good financial management is picked to the bone for Bains shareholders, while the banks and loaners 2-10 get farked.

Thats not destructive capitalism people, it's rape. And it's only allowed because of lobbyists.

I just want to add that the author of TFA is hot. That's the important issue here

TyrantII: and so a company that was properly invested in and most likely could have been saved with good financial management is picked to the bone for Bains shareholders, while the banks and loaners 2-10 get farked.

If such actions were SOP, how did they get anyone to finance leveraged takeover 2 and 3 and 4?

Saiga410: TyrantII: and so a company that was properly invested in and most likely could have been saved with good financial management is picked to the bone for Bains shareholders, while the banks and loaners 2-10 get farked.

If such actions were SOP, how did they get anyone to finance leveraged takeover 2 and 3 and 4?

Because it's essentially illegal. I'm sure some money also changed hands.

A lot of times the funding is federally backed, so the banks don't end up losing out either.

Plutocracy is a biatch. For us.

Wendy's Chili: So how many pension funds has Bain raided over the years? Surely someone on Gingrich's or Obama's campaign team knows the answer.

Whoa whoa whoa. We're not here for specifics. Innuendo, projection, and infantile temper tantrums about the realities of life will do plenty to "motivate" Romney's opponents.

That sounds suspiciously like...everything-and-one in politics!

Why Would I Read the Article: Mugato: If people actually knew anything about what goes on economically in this country, 98% of the country would not vote Republican and of the remaining 2% at least a small portion of them would feel guilty about it for a couple seconds.

If people actually knew what they were talking about, instead of conjuring bullshiat from their anus or simply repeating easily disprovable talking points that were also conjured from the anus of the person who formed them, 98% of the country would stop posting said bullshiat on message boards, and 1.9% would feel bad about all the bullshiat they had posted over the years.

The remaining .1% would be Mugato, Weaver, and Cameroncrazy.

He'd just post more sports horse shiat and move on happily.

Saiga410: TyrantII: and so a company that was properly invested in and most likely could have been saved with good financial management is picked to the bone for Bains shareholders, while the banks and loaners 2-10 get farked.

If such actions were SOP, how did they get anyone to finance leveraged takeover 2 and 3 and 4?

Here's a question for you: How does BAIN invest in a company that ultimately fails, yet turn a 400% profit? The money is coming from somewhere.

They turn capital assets into liquid assets and jump ship before the carcass sinks.


It's whats happening. It's happening because people are being allowed to do it. Most likely the same way subprimes and ALT-A's were allowed to be bundled together then rated AAA debt. Finance is rigged by the smart, and executed by the criminally negligent.