Jim Cramer: Coronavirus Banker Bailouts “one of the greatest wealth transfers in history.”



What worse is that while all this went on, the big tech corporations were censoring everybody on social media (even the President)..

Source: https://www.youtube.com/watch?v=15pFQxG9wko

FAIR USE
Copyright Disclaimer under section 107 of the Copyright Act 1976, allowance is made for fair use for purposes such as criticism, comment, news reporting, teaching, scholarship, education and research.
Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use. Read more (video was cut to 28 seconds from an initial 4 minutes. The 4 minute version was public for a few minutes before the video was changed to the 28 second version, and it was only viewed by 2 people, both of them probably your sick copy-write trolls — this constitutes as fair use)



(FT) “If you think people were upset about bailing out banks where the CEOs were making $50m a year, how are they going to feel about bailing out private equity firms where the CEOs make $500m a year?” said another investor.” Read more
https://www.ft.com/content/c0b78bc9-0ea8-461c-a5a2-89067ca94ea4



(Wikipedia) Largest private equity firms by PE capital raised







“In 2019, Private Equity International ranked the largest private equity firms by how much capital they raised for private equity investment in the last five years”

Rank Firm Headquarters Five-year fundraising total (m)
1 The Blackstone Group United States New York City $82,851
2 The Carlyle Group United States Washington D.C. $63,802
3 Kohlberg Kravis Roberts & Co. United States New York City $47,977
4 CVC Capital Partners Luxembourg Luxembourg $47,413
5 Warburg Pincus United States New York City $36,557
6 Bain Capital United States Boston $35,554
7 EQT Partners Sweden Stockholm $30,054
8 Thoma Bravo United States Chicago $29,880
9 Apollo Global Management United States New York City $29,001
10 Neuberger Berman United States New York City $28,884
11 Hellman & Friedman United States San Francisco $26,900
12 TPG Capital United States Fort Worth $25,661
13 EnCap Investments United States Houston $21,097
14 Vista Equity Partners United States Austin $19,785
15 Apax Partners United Kingdom London $18,615
16 General Atlantic United States New York City $16,916
17 Clayton, Dubilier & Rice United States New York City $16,509
18 Permira United Kingdom London $16,394
19 Advent International United States Boston $16,026
20 Silver Lake Partners United States Menlo Park $15,000


Just for anybody who may be new to all this information: this is what they refer to as a “junk bond“.



As you can see, rates can run up into the range of 10% per annum, meaning on just $1 billion in principle, the note holder will realize $100 million in profits every single year.

Does it seem fair for a PE fund to have the right to collect $100 million in interest every single year without taking any risk?

One could easily argue that this is very definition of fascism..



What’s worse is that this implied fed bailout variable is beginning to have an affect how managers run their companies.

Because everybody just knows that the fed will always be there to provide support when times get tough, and that the banks and exchanges will continue to manufacture excessive volatility so they can maximize their trading profits, companies have become far too concerned with increasing their share price, rather than executing on long term business objectives.

For a CEO who’s average tenure is only 5 years, there’s simply no real incentive in pursuing any kind of long term, meaningful business endeavor. Apparently Wall Street has become acutely aware of this problem, as they were caught holding ‘secret summits’ (in brazen violation of anti-trust laws) on “long termism” back in 2016.

In addition to everything we just covered, according to Bank of England Economist Andrew Haldane, the implied banker bailout clause also has the effect of subsidizing Wall Street profits by as much as $300 billion per year — and those estimates are from 2011, so we can only assume that this implied subsidy is much larger today..

Is it any wonder why the gap between the rich and the poor is nearly double that of every other westernized nation in the world…



Just to give you idea of how profitable it can be to have a central bank as your backstop when things go south; the last time the fed bailed out the financial system, it was estimated that the income earned by the 6 largest banks from all this cheap credit amounted to as much as 23% of their net income..



“The six biggest U.S. banks’ share of the estimated subsidy was $4.8 billion, or 23 percent of their combined net income during the time they were borrowing from the Fed. Citigroup would have taken in the most, with $1.8 billion.”

–Bloomberg



Just for the record, that Bloomberg piece significantly underestimated the true cumulative value of those bailouts.

It was actually $29 Trillion — four times more than the $7 trillion figure referenced in that article.






The above chart should be the only piece of evidence one should need to understand how Huawei was able to beat America in the race to 5-G technology.

While China was formulating long term plans — however inefficient they may have been — these monstrous financial institutions were playing with the money on Wall Street and misappropriating talent away from real tangible value adding business activity (25% of Goldman employees are engineers).

Those engineers belong at companies like Apple, or Facebook — not Goldman Sachs and J.P. Morgan.

Over the past 12 years, the activities of these mega-banks can be summed like this: first they printed trillions of dollars so they could wipe away their bad debts, then like monkey’s when presented with an excess food supply, they proceeded to throw it at each other via a complex network of computer algorithms (HFT’s); all the while skimming off little pieces along the way through an alphabet soup of hidden fee’s scattered throughout every nuance of the capital formation process.

What is truly sick about this whole story is that while all this went on, millions of Americans were both deprived of the opportunity to achieve their true potential and forced into debt slavery..



Now fast forward back to the present, and the mega-banks have somehow managed to find a way to catapult the stock market into greatest 50 day bullrun in history, while 95% of the country was under some form of a lock-down order..



What do you think that’s going to do to the value of your life savings, or better yet, your cost of living?

Stock markets don’t just go on historic bullruns in the middle of the most extensive worldwide economic shutdown in human history, while 22% of businesses have shuttered their operations (the majority of which will never reopen again) and while 40+ million people are unemployed..


As they say, for every action, there is an equal and opposite reaction…

But should we expect any less? A broker (investment banker) and a trader (stock exchange) currently occupy the top two positions of the New York Fed — the de facto central bank for the entire country.




Pictured below is Morgan Stanley’s “banking” segment..



You could argue that the “Wealth Management” division is not actually banking because they admit explicitly that it is used to facilitate margin loans for traders..



 ‘10-Q’ for 3/31/18

Versus their $858 billion of total (“other”) assets.

Morgan Stanley is most certainly NOT a bank — not even close…

What a joke..With regards to “The Nasdaq”, we just know, without even needing to provide any further evidence, that it is also most certainly NOT a bank, so there’s no point in even going into any more detail with regard to why the sitting CEO of the second largest stock exchange in America is sitting on the board of the New York Fed.

Pictured below are the Federal Reserve bank’s balance sheets divided by region. As you can see, the New York Fed dwarfs all the others, accounting for more than 55% of all CB bank holdings for the entire country.




Just an FYI: you can’t even sue these people in a real court of law when them and their cronies decide one day that they want to rip you off ..



This is the world we live in folks…

Is it any wonder that we have all these practically worthless (and sometimes even outright bankrupt) small caps spiking 1000’s of percentage points in the midst of massive layoffs and record breaking bankruptcies while analysts worldwide continue to warn of an impending great depression 2.0..







Listed below are just a few of the more notable examples (although there is most definitely many, many more).

IZEA

GNUS

HERTZ

DGLY

SINT

XSPA

UAVS

DECN

BIOC

PRTS

WKHS

VISL

FFHL

KTOV

EKSO

FRSX

BYFC

MARK

SRNE

CIDM

NAK

CJJD (archive)

CODX (archive)

ANTX (archive)

OTLK

IFRX

NVAX

SOLO

CETX

IBIO

BOXL

DFFN

PLUG

CLSK

DMPI

LMFA

MNKD

NAKD

PAYS

RARE

DLPN

CARV (archive)

Urban One (this one was insane)

TGTX

CHCI

APHA

CGC

HEXO

SAGE

OAS

PTON

CHAP

GWPH

NVCN

TTI

Oil companies
Hype stock of the day at R/Pennystocks
archive








FAIR USE
Copyright Disclaimer under section 107 of the Copyright Act 1976, allowance is made for fair use for purposes such as criticism, comment, news reporting, teaching, scholarship, education and research.
Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use. Read more


(Bloomberg) “So what do the numbers reveal about the last decade? Of the S&P 500’s 13.3% annual return since 2010, 2.3% came from dividends, 10.2% from earnings growth and 0.8% from the change in the market’s valuation, as measured by the 12-month trailing price-to-earnings ratio. In other words, the vast majority of the gains can be attributed to a spike in earnings rather than investors’ willingness to pay more for stocks. In fact, the decade’s earnings growth was the highest on record.” Read more
archive







Source: stocktwits.com














Dr. Carroll Quigley, Georgetown University

“In addition to these pragmatic goals, the powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent and private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank, in the hands of men like Montague Norman of the the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the bank of France, and Hjalmar Schact of the Reichsbank, sought to dominate its government by its ability to control Treasure loans, to manipulate foreign exchanges, to influence to the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world. In each country the power of the central bank rested largely on its control of credit and money supply. In the world as a whole the power of the central bankers rested very largely on their control of loans and of gold flows”.

It must not be felt that these heads of the world’s chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down —Read more
(Source)



FAIR USE
Copyright Disclaimer under section 107 of the Copyright Act 1976, allowance is made for fair use for purposes such as criticism, comment, news reporting, teaching, scholarship, education and research.
Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use. Read more

3 thoughts on “Jim Cramer: Coronavirus Banker Bailouts “one of the greatest wealth transfers in history.”

Leave a Reply

%d bloggers like this: