One World Market, baby / The Private Global Equity Order

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Postby Gouda » Wed Apr 04, 2007 7:37 am

Private Equity Groups like Carlyle, KKR and Blackstone buy up public corporations (and sometimes even other private equity firms), take them to a private place, strip them, humiliate them, bend them to their will, load them with a Debt, and thus tool them as super soldiers for capitalism -- the ones that survive the looting, the boot camp, and the debt, that is. I think of Private Equity as the Labs (or Gitmos, if you will) turning out Manchurian candidates for finance capitalism.

We've seen that Private Equity (PE) Groups like Blackstone don't do public. Until now.

Yep, PE is on the move again, this time planning to embed themselves in the public markets, listing on the big exchanges.
Blackstone has volunteered to take the lead.

Wall St stirred by prospect of Blackstone IPO ... .html?.v=1
While the details of the offer are unclear, Blackstone is understood to be in the advanced stages of preparation with the help of its advisers at Goldman Sachs

Goldman Sachs ("long-term greedy") is right there with this one as well. That should raise some red flags.

Private equity may open its doors
One of the industry's most powerful players may be considering an IPO - which would give everyday investors access to the exclusive world of private equity. ... /index.htm

Such a move would likely trigger a wave of IPOs among private equity firms, experts said.


An IPO by a major private equity group has been expected for some time. Several of the biggest firms face the issue of succession as their top dealmakers near retirement. A successful public offering would give senior partners a profitable exit as well as help companies attract new talent. Publicly traded shares could also give private equity firms, which face a competitive environment for deals, an edge when it comes to vying for targets.

If Blackstone goes public, it will be able to use its shares to make acquisitions, putting it on the same ground as corporate buyers, Sherman said. "It's a new form of currency with which to do acquisitions," he said.

No, they aren't "opening their doors," you idiots. They are opening yours.

More on that. Now, why would PE want to make the pedestrian move of an IPO when they don't even need the money? I’d surmise the following:

1. So their Founders and Chiefs are able to cash out their stakes in the Firm without legal impediments when they retire -- a golden retirement parachute that they do not have as a private group. They seek to retain all the benefits of private equity while also acquiring the benefits of public listing. That is, they are well pensioned while the public's pensions are used as Vegas money feeding their growth.

2. They know that exchanges are merging into global entities and thus wish to have exposure to global pools of investor capital and added leverage in acquiring targeted companies. It enables them to outcompete public corporations for mergers and acquisitions, anywhere, anytime. They also need to harmonize (and synergize) with the likes of John Thain (“former” Goldman Sachs) at the NYSE, as well as the other big merging exchanges. Will Private Equity eventually gobble up all publicly listed companies, forcing public exchanges to list in the end, only private equity groups and/or companies that have been "re-educated" by public equity? See * below, at end of post.

3. Going “public” gets us all buying into this dirty, dark world. We become a part of it. If it's mainstream, it's normal, it's OK, it's natural. Thus, Private Equity makes psychological inroads into the public sphere, basically threatening: "Join us, since you can beat us."

4. Public relations. It’s part of their image makeover attempting to dispel our suspicions about their secrecy and insularity and power.

5. Co-optation of wall street elites and legitimization of the private equity process and paradigm. A form, perhaps, of synarchy (in the Chinese Qing Dynasty sense).

Mainstream summary:

Blackstone IPO would represent a flip-flop
[Not really -- Gouda]

Wall Street is abuzz, asking why a leader in private buyouts would itself go public. ... &cset=true

As money has gushed in from investors seeking huge returns, private equity funds and their close cousins — hedge funds — have revolutionized Wall Street in recent years, becoming forces in corporate mergers, securities trading and global finance.

"What was once a niche vehicle is now mainstream," said David Fann, chief executive of PCG Asset Management, a La Jolla-based private equity consulting firm. "Private equity and hedge funds are now mainstream."


Blackstone and gold-plated rivals such as Carlyle Group and Kohlberg Kravis Roberts & Co. raise money from pension funds, college endowments and wealthy individuals to buy publicly traded companies. They restructure the companies — often laying off scads of employees in the process — with the aim of selling them in IPOs.


Detractors say they strip-mine companies by saddling them with crushing debt while making enormous payouts to themselves.


Marc Morgenstern, a San Francisco lawyer and veteran dealmaker, said going public would allow Blackstone's founders to seamlessly cash out their stakes when they retire and would let the firm compensate employees with stock options.

It also would give Blackstone a war chest with which to buy other private equity firms, or for emergencies if the market turns down.

"It's always a good idea to take money off the table when you can, and you don't always know when you can," Morgenstern said.

Morgenstern and others said that Blackstone did not need the money to do deals, and that that probably was not its primary motivation in going public.


Remember Davos 2007:

* John Thain, chief executive of the NYSE Group, offered up some sobering words Friday about the explosive rise of private equity, which has swept many publicly traded companies off of the world’s major exchanges. He said, in effect: They’ll come back to us.

Half of last year’s initial public offerings on the New York Stock Exchange, which the NYSE operates, represented private equity firms exiting their investments, Mr. Thain said, making buyout shops “our biggest customers.” ... te-equity/
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Postby Gouda » Wed Apr 04, 2007 10:34 am

And back to where this thread started: the NYSE and Euronext Merger. It's done.

*corks popping in cigar dens and masonic halls on both sides of the Atlantic*

Tokyo next up.

John Thain ain't coy, is he.


NYSE-Euronext makes its debut ... 42007.html

A transatlantic stock market giant made its trading debut Wednesday as the newly-merged market operator NYSE Euronext listed in Paris and New York at an initial reference price of 75.61 euros.

Created at the end of March, the stock market group boasted a market value of 19.32 billion euros (25.81 billion dollars), making it the world's largest listed exchange group based on the opening price for the combined share on Euronext Paris.

At a launch ceremony at the Paris stock exchange it made no secret of its global ambitions and its plan to move on to Asia.

"NYSE Euronext is the global leader and we have significant business opportunities ahead of us," John Thain, the group's chief executive officer, said in a statement.

"We have 78 of the top 100 largest companies in the world listed on NYSE Euronext markets, and we will continue to expand our global footprint and offer our customers a wider variety of trading products and services.

"As capital markets around the world consolidate, NYSE Euronext will play a central role in the development and definition of the new global marketplace," he said.

The new leviathan brings markets in New York, Paris, Brussels, Amsterdam and Lisbon under one roof and also includes the Liffe financial futures market in London.

The combined value of the businesses listed on its different markets, including foreign companies, comes to 28,500 billion dollars, way ahead of its nearest competitor, the Tokyo Stock Exchange on five billion dollars.

The NYSE and Euronext hope that by coming together, they will increase the size of their aggregate business as each will be open to customers of the other.

"It is a historic day for our new company, for our industry and for world financial markets," said the vice president of the operator's board of governors Marsall Carter.

The two companies will also be able to share the costs of computer systems and administration, saving 375 million dollars (284 million euros) in 2009.

Jean-Francois Theodore, deputy chief executive, said Wednesday that the creation of NYSE Euronext would open the way for all participants to trade a broader range of products across extended time zones using harmonized trading platforms.

In late morning Paris trades, NYSE Euronext shares, quoted as "NYX" had given up 2.31 percent to 73.86 euros, while the CAC-40 index was essentially flat overall.

Trading was due to start in New York at 09:30 am (1330 GMT).

After an opening ceremony on the Paris stock exchange the operator's chiefs were to hop on the plane to New York for a similar ceremony at the closing on Wall Street.

In the last few years European stock markets, essentially those in Frankfurt and London, and Euronext, have been entwined in moves and counter moves to form alliances but without success.

When the NYSE bid for Euronext was announced a year ago, it raised hostility in political and economic circles in Europe on the grounds that it was not a "merger of equals" as claimed by the architects.

Opposition was based on the assessment that it amounted to an outright takeover of the pan-European exchange Euronext by US interests.

In practice the two component markets retain their separate identities, their specific trading arrangements and their trading hours.

A vital point is that companies quoted on each market will continue to operate under existing regulations. European companies will not be affected by severe US accounting rules, as stipulated by the Sarbanes-Oxley legislation, which are much criticised in the United States for increasing costs on quoted companies.

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Postby Gouda » Wed Apr 04, 2007 11:28 am

Newly merged NYSE Euronext has Asian ambitions ... change.php

PARIS: The chiefs of the merged New York Stock Exchange and Euronext say that they are determined to create a truly global market, including a move into China.

"NYSE Euronext is an adventure that is still only at its beginnings," Jean-François Théodore, the deputy chief executive of NYSE Euronext, the first trans-Atlantic exchange, said on Tuesday, the eve of the opening day of trading in its shares. The combined markets had the "capacity to influence and attract others," Théodore said, and would "favor further stock market consolidation, particularly in Europe."

John Thain, the chief executive of NYSE Euronext, said that the company planned to expand its operations in Asia. "We want to be global, and to be global we need a bigger presence in Asia," he said.


NYSE Euronext already has a strategic alliance in Japan with the Tokyo Stock Exchange, and it owns a 5 percent stake in the National Stock Exchange of India.


Théodore gave "an absolute assurance" that U.S.-style regulation would not spread to Europe as a result of the merger.
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Postby Gouda » Mon May 21, 2007 9:40 am

China to take $3B stake in Blackstone ... tm?cnn=yes

The deal will help China improve returns on the $1 trillion it holds in foreign exchange reserves.

May 20 2007: 8:06 PM EDT

NEW YORK, (Reuters) -- China's new state investment firm on Sunday said it plans to make a $3 billion investment in the Blackstone Group, one of the most prominent and powerful U.S. private equity firms.

China's soon-to-be-established foreign exchange investment company would make the investment in the form of nonvoting common units of Blackstone, a firm that has been at the forefront of a global boom in mergers and acquisitions.

China announced in March it was setting up a vehicle to help diversify part of its $1.202 trillion of foreign exchange reserves, the world's largest, to improve returns and diversify risk.

State media have said the new agency could manage up to $200 billion, although some Chinese economists have called for twice that amount to be at its disposal.

"This is a very, very significant move and it symbolizes that China believes in America," said Frank Holmes, chief executive of U.S. Global Investors Inc.

"We are talking about a very sophisticated country. This is an excellent strategy for them to bring their dollars back into America."

The announcement comes just days before this week's planned visit to the United States of a delegation led by Chinese Vice Premier Wu Yi to discuss sticking points in bilateral trade relations.

U.S. Treasury Secretary Henry Paulson will host the meetings, as part of a strategic economic dialogue set up last year.

The Chinese investment company said it plans to have less than a 10 percent equity stake in Blackstone immediately after Blackstone completes its pending initial public offering, and aims to hold its investment for at least four years.

New York-based Blackstone, known for taking huge companies private, in March filed to bring part of itself public in an offering worth $4 billion.

The firm said raising funds through the public offering would give it quick and steady access to money it would otherwise have to take time to raise privately.

Blackstone's recent deals include the $23 billion purchase of Equity Office Properties Trust and the $17.6 billion buyout of Freescale Semiconductor (Charts). It is one of the few U.S. private investment firms to ever take itself public.

Sunday's news follows a move earlier this year by Blackstone to expand its investing in the Asia-Pacific region.

On Jan. 10, Blackstone said it planned to open a private equity office in Hong Kong and that Antony Leung, who was financial secretary of Hong Kong from 2001 to 2003, joined the firm as a senior managing director and chairman of Blackstone Greater China.

Blackstone said then that Leung would co-head Blackstone's Hong Kong office along with Ben Jenkins, a senior managing director, who would relocate with a team from New York.

The firm said it may open more offices in the region as its business grows.

Blackstone's Keys To The Kingdom ... stone.html

With an agreement that an investment fund set up by the People's Republic of China will acquire a $3 billion nonvoting equity stake in its soon-to-be publicly traded stock, Blackstone secures a big entrée into an economy in which many of its private equity peers have already been active buyers.

...and/or China secures a big entree into an economy that seeks to outlive the insolvent treasuries of state. -- Gouda
What's unusual is that China is taking a stake in Blackstone and not in one of its many multi-billion buyout or alternative funds.

After Blackstone IPO, where will China invest next? ... B661D64%7D

NEW YORK (MarketWatch) -- For China, the $3 billion of foreign-exchange reserves it plans to invest in private-equity firm Blackstone Group is just a trickle in a river of cash that it could unleash on the international capital markets.


"China is accumulating foreign-exchange reserves at the rate of at least $200 billion a year, and they want to start to use those reserves in a way in which their returns would be greater. Private equity is an obvious potential way to do that," he commented. "It's also useful to remember that these $3 billion is perhaps five days of cash flow for China."


China announced the Blackstone investment just as Chinese economic leaders arrived in Washington Monday for two days of trade talks aimed at avoiding a large-scale trade conflict. Read more.


Brian Dolan, chief currency strategist at, a division of Gain Capital, said that China's stake in Blackstone "certainly alerts the investment community that there's more money to come from China."

"Investing in private equity, you are looking at much more wide-ranging investment options as opposed to going with something much more traditional, such as equity or mutual funds, bond funds," Dolan pointed out. "By investing in a group like Blackstone, you're investing in everything from real estate and utilities to energy production. The options are much greater."
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Postby Gouda » Fri May 25, 2007 7:30 am

Back to bourse mergers. NASDAQ, in a chest thumping directed south at the LSE,
is buying Nordic bourse group OMX, the largest exchange in the Nordic region.

Nasdaq to buy Nordic bourse group OMX for $3.7 bln ... Nasdaq.php

The acquisition is a major breakthrough for the Nasdaq, which still owns almost 30 percent of the London exchange and could use the purchase of OMX to persuade LSE shareholders to agree to a deal creating a giant European exchange.

Added on edit: but wait!! Hello Dubai.

Dubai could break Nasdaq OMX deal ... index.html

LONDON, England (Reuters) -- Dubai International Financial Centre (DIFC), the owner of the Dubai stock exchange, is mulling a rival bid to Nasdaq's agreed $3.7 billion takeover of Nordic markets owner OMX, the Sunday Times reported.

The paper said, without naming sources, Dubai government-owned DIFC had appointed HSBC to advise it on the potential counterbid.

DIFC Governor Omar bin Suleiman told Reuters on Thursday it was not considering making a bid for OMX...
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Postby Gouda » Fri Jun 01, 2007 9:57 am

The Cerberus in fact ate my Chrysler!!

In Greek mythology, Cerberus or Kerberos (Greek Κέρβερος, Kerberos, "demon of the pit") was the hound of Hades, a monstrous three-headed dog (sometimes said to have 50 or 100 heads). Cerberus guarded the gate to Hades and ensured that spirits of the dead could enter, but none could exit (additionally no living person was to come into Hades).

Chrysler, surely a spirit of the dead, enters private equity hell and shall never return...

The Cerberus takeover of Chrysler—what it means for auto workers ... -m17.shtml

By Shannon Jones
17 May 2007

Chrysler CEO Tom LaSorda called for cuts in retiree health benefits one day after the announced sale of the North American unit of DaimlerChrysler to the private equity firm Cerberus Capital Management. The statement by LaSorda, who will continue to head Chrysler under Cerberus ownership, confirms that the sell-off of Chrysler is the preparation for a wholesale assault on North American auto workers.

The sale of the Michigan-based automaker to Cerberus has been widely presented by politicians, the media and the leadership of the United Auto Workers as a blessing for Chrysler workers. The change of ownership, it is said, will help shore up and stabilize the automaker’s operations and ultimately benefit the workforce.

The reality is that Cerberus, a firm notorious for stripping companies of their assets in order to resell them at a profit, is preparing to brutally slash the jobs, wages and benefits of Chrysler workers. Since its founding in 1992, Cerberus has amassed enormous wealth from the contraction, not the expansion, of corporate entities ranging from retail chains to auto parts and supply companies. It has left a trail of battered companies either drastically downsized or dismantled.

Last year, for example, Cerberus bought 600 Albertson’s supermarkets. Within months it had laid off 1,000 workers. In 2004, Cerberus purchased the Mervyn department store chain. The next year it closed 62 Mervyn stores, eliminating 4,800 jobs. It recently closed a bus plant in Canada and several textile mills in the US. It has also been involved in the downsizing of the car rental firms Alamo and National.

The sale of Chrysler to Cerberus “will shake the ground under people’s feet in a huge way,” Kevin Boyle, a professor at Ohio State University and a noted historian, told the New York Times in a May 14 article entitled “Cerberus Emerges from the Underworld.”

The Wall Street Journal on May 15 quoted Peter Pestillo, the former CEO of auto parts maker Visteon and for a time the Ford executive in charge of UAW talks, as saying, “This deal by Cerberus sets things up for very significant changes in Detroit. It will shake up GM and Ford as well.” Cerberus, Pestillo continued, doesn’t “soldier on with bad contracts. They shine things up and sell.”

Unlike mutual funds, private equity funds operate largely outside of government regulation, since their stock is not publicly traded. They pool huge amounts of private capital seeking the largest return in the shortest time. The modus operandi of firms like Cerberus is not to create profit through the development of new products and technologies, but to plunder the assets of existing companies.

An article in the May 14 edition of the German magazine Der Spiegel, entitled “Hellhound Snaps up Chrysler,” had this to say: “Venture capital firms like Cerberus invest in or purchase other companies that are about to go bankrupt. After buying them, they either take control as the largest creditor, rationalize the business and re-sell it—or they carve it up into pieces. Originally, Cerberus primarily bought the debt of bankruptcy candidates from their creditors. Since then, the portfolio has expanded to all kinds of problem-ridden assets. Firms like Cerberus have earned the nickname of ‘vulture funds.’”

One asset Cerberus undoubtedly has its eye on is Chrysler’s profitable auto finance unit Chrysler Financial. Cerberus already owns a majority stake in General Motors Acceptance Corporation Financial Services (GMAC), which it bought from General Motors last year. It is likely that Cerberus will attempt to carve Chrysler Financial, with net assets of $5.5 billion, out of Chrysler and merge it with GMAC, creating a massive and potentially highly profitable entity.

Cerberus’s owners have reaped enormous profits since the company’s start-up in 1992. Company founder, Stephen Feinberg, formerly worked at corporate buyout firm Drexel Lambert, notorious in the 1980s for popularizing so-called “junk bonds.” Fortune magazine in 1999 listed Feinberg as one of the richest Americans under the age of 40. At that time his net worth was $274 million.

According to an October 3, 2005 report in BusinessWeek, some of the top personnel at Cerberus earn up to $40 million a year. An article in CNNMoney from November of 2006 noted that private equity firms returned 22.5 percent on investments, as compared to an average of 6.6 percent for companies included in the Standard & Poor’s 500 list.

Such extraordinary returns are not possible from more traditional business operations, and certainly not from the production and sale of automobiles. The functioning of firms such as Cerberus often involves complex and risky transactions that have absolutely nothing to do with the creation of real value.

A piece in the March 16, 2006 edition of USA Today states that the secret of private equity firms “is the use of debt—usually as much as seventy cents of every dollar they invest. Because they pile debt onto the companies they buy, private equity firms free up their own cash, allowing them to make additional investments and maximize their potential returns.”

In some cases, private equity fund managers have been accused of taking out loans against the assets of companies they have purchased so as to award themselves fat payouts, regardless of what happens to the takeover target.

Underlying the rise of private equity is the ready availability of investment cash. Following the 2000 stock market collapse, private equity became a preference for investors seeking big returns.

Increasingly, private equity funds have obtained investment capital from public pension funds, which accounted for about one quarter of all new money raised by private equity firms last year. According to a report in the May 15 New York Times, among the investors in Cerberus are the Los Angeles Fire and Police Pension System and the Pennsylvania Public School Employees Retirement System.

Thus, workers’ pension funds are being used to help underwrite the takeover and destruction of companies and the consequent elimination of the jobs and benefits of other workers.

Further, given the highly speculative nature of private equity ventures, the increasing turn by pension funds to private equity investment is exposing workers’ retirement benefits to substantial risk. There is already talk in some circles of a “private equity debt bubble” (Boston Globe, May 1, 2007).

Who runs Cerberus?

A look at the leading personnel of Cerberus underscores the socially reactionary character of this enterprise. Feinberg has assembled a management team comprised of individuals from politics and business whose names are associated with job-cutting and other anti-social polices carried out by the US and international ruling class over the past several decades.

* The chairman of Cerberus is John W. Snow, formerly Bush’s treasury secretary. Snow led the drive for massive tax cuts for the rich. Prior to his tenure in the Bush cabinet, Snow headed CSX Corporation, the railroad conglomerate.

* Former Republican Vice President Dan Quayle is another notable at Cerberus. Since joining Cerberus in 2000, he has focused on international operations, using his political connections to assist in acquisitions in Japan and Germany.

* Former US Secretary of Defense Donald Rumsfeld was an investor, according to a report filed in 2001.

* David Thursfield, a senior member of Cerberus’s automotive and industrial team, gained a reputation at Ford as a savage cost-cutter. His push to force parts suppliers to reduce prices produced so much tension within Ford management that he was forced to leave the company in May 2004, the same month he joined Cerberus.

* A new figure at Cerberus is Wolfgang Bernhard, a former executive at Chrysler and Mercedes Benz. According to a report in the May 14 New York Times, “At both companies he wielded a cost-cutting ax, ruffling the feathers of the labor unions and higher-ups.”

* Another important team member, assisting Cerberus operations in Europe, is former German Defense Minister Rudolf Scharping, who is said to be an advisor. Scharping was dismissed from his government post in 2002 following several scandals.

For the UAW bureaucracy to praise the sale of Chrysler to Cerberus, claiming it is in the “best interests” of workers, says much about the reactionary interests the UAW serves.
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Postby Gouda » Fri Jun 01, 2007 10:10 am

Surely one does not fail to miss one element of the love connection between
China and the Kingdom of Private Equity -
and thus it would seem that the Cerberus and Blackstone deals are linked:
China agrees to invest its huge reserves in private equity,
which in turn sends the plants and operations of its newly abducted companies from the USA to China.
The merged stocked exchanges (NYSE, Nasdaq) may list the resold, retooled companies in China,
and wall street (Goldman, Citibank, Chase etc) finances it all.
Will we be seeing Chryslers made in China soon?
Keep 'em there. US roads and bridges are crumbling anyway.
I see no actual nuts 'n' bolt States involved in any of this equity diplomacy.
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Bank for International Settlements (BIS)

Postby Gouda » Tue Jun 19, 2007 11:30 am

BIS, oldest international Nazi bank in the world. Here we have Bilderberg for Central Bankers, the crusty laggards of the new world market order. Their advice: central banks need to play catch up with the emerging global equity market. Reminds me of the scene in Godfather III where Michael Corleone visits Sicily to consult with Don Tomassino, eminence gris of Sicilian mafia Dons, on dealing with the threatening tactics of powerful emerging mafias.


"Markets are increasingly global, and central banks are not," said Willem Buiter, 57, a former member of the Bank of England's Monetary Policy Committee.
"So there's a huge vacuum to be filled."

Promise? Threat? BIS, a candidate or model for a future global central bank to administer and coordinate a world market?

Bernanke, Trichet Turn to BIS as Markets Ignore Risk ... cW8RYVARJM

June 19 (Bloomberg) -- Six decades ago, the U.S. Treasury wanted to shut down the Bank for International Settlements, saying it helped finance the Nazis. Today, Jean-Claude Trichet and Ben S. Bernanke are transforming the organization into one of the world's most powerful networking clubs.


With hedge funds and private equity firms pumping record sums of money around the world economy, central bankers fret that investors are taking on too much risk. As a result, the bankers are increasingly turning to the Basel, Switzerland-based BIS, the oldest international financial institution, for research and advice, and to coordinate damage-control plans.


``The rapid development of global financial markets points toward the importance of strengthening the cooperation within the worldwide community of central banks,'' Malcolm Knight, 63, general manager of the BIS, said in an e-mailed response to questions.


``Markets are increasingly global, and central banks are not,'' said Willem Buiter, 57, a former member of the Bank of England's Monetary Policy Committee. ``So there's a huge vacuum to be filled.''


``The BIS has more influence than you might think,'' said Ernst Welteke, 64, who headed the Bundesbank between 1999 and 2004. ``It's a very informal exchange of opinions, which I found very important.''


Central bankers also get time to relax. At last year's annual gathering, policy makers crammed into the bar of the Basel Hilton to watch the World Cup soccer match between the Netherlands and Portugal, smoke cigars and exchange banter.

``There's a wonderful camaraderie among central bankers that means they really get to know each other very well,'' said Meyer, who sometimes represented Alan Greenspan during his time at the Fed between 1996 and 2002. Traveling to Basel ``was unbelievable fun.''
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Postby Gouda » Thu Jun 21, 2007 5:40 am

LSE in merger talks with Milan bourse ... index.html

LSE in talks with Borsa Italiana ... 10621.html

LONDON, England (Reuters) -- The London Stock Exchange (LSE) is in talks over a possible merger with Borsa Italiana, in its latest attempt to head off expansion of the combined New York Stock Exchange and Euronext (...)

The pace of consolidation has accelerated following the demutualisations and public listings of exchanges in the last few years. Borsa Italiana signaled that it would look for partners last year.

The move pits the LSE against NYSE Euronext, but comes as the Milan exchange last night exercised an option to take full control of the MTS bond trading platform it shares with Paris-based Euronext. (...)

NYSE Euronext, which held talks with the Borsa last summer, has expressed interest in re-opening talks, possibly complicating the LSE’s deal. Some of the Borsa’s shareholders favour a merger with Euronext.

This is all just natural, rational, and inevitable market action and reaction of course.
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Postby Gouda » Wed Jul 18, 2007 3:47 am

Lots of talk about impending economic doom, insolvency, market collapse, bad debts, corporate and bank failures.

Good, but not so good. A lot of myopic greedy jerks will get hit and taken out - not to mention all the little guys and gals who will suffer even more - but this will result in misplaced blame and mischanneled anger, rather than education or change.

Capital fascism needs a house cleaning now and then on its merry way to longer term consolidation of wealth and control.

The insolvency can be solved by fewer banks taking over and owning properties, firms, other banks, and other assets. The most powerful Private Equity firms aim to survive. The global market exchange structure and the global trade agreements provide the framework to globalize and consolidate the survivors of any crash.

Not that this will work, mind you. It just looks like what want to do.

Goldman, JPMorgan Saddled With Debt They Can't Sell (Update2) ... refer=home

In 1989, First Boston Corp., now part of Credit Suisse, made a bridge loan for a buyout of Ohio Mattress Co., the predecessor to Sealy Corp. The junk bond market collapsed before First Boston could refinance the loan, and the securities firm ended up owning a big stake in the bedding manufacturer.

The deal became known as ``Burning Bed.''
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Postby Gouda » Mon Jul 30, 2007 6:29 am

How's reification of that unregulated Private Economy (for illegitimate and illicit finance flows, inter alia) coming along?
More preparation for a public wipeout AND planned global gating of the economy. Here you go:

Goldman Takes 'Private' Equity To a New Level - Firm's Trading System Lets Unregistered Stock Reach Exclusive Market

May 24, 2007; Page C1

Goldman Sachs Group Inc. ranks as the most profitable securities firm on Wall Street -- reflecting its mastery of trading on the world's public markets.

Now Goldman is turning that franchise on its head, creating its own private system to trade the stocks of companies that don't want the scrutiny and regulatory burdens of going public.

The new system, GS TRuE -- short for Goldman Sachs Tradable Unregistered Equity -- was announced two weeks ago and made its debut on Monday with an $880 million sale of a 15% stake in Oaktree Capital Management LLC, an alternative-investment manager.

It is the first of several new, private exchanges like these being considered by Wall Street firms and others. Nasdaq is also planning its own new market for smaller, unregistered securities.

These markets will generally be closed to individual investors. For instance, Goldman's market is open only to large institutional investors with assets of more than $100 million. That is because the stocks traded on GS TRuE aren't registered with the Securities and Exchange Commission and issuers aren't subject to SEC regulations designed to protect individual investors.

It represents the latest step in the creeping exclusion of individual investors from a growing proportion of financial-market activity. For instance, giant private-equity firms are busy buying public companies and delisting them from stock exchanges. The growing importance of hedge funds -- which are generally limited to wealthy investors, institutions and endowments -- also excludes individuals.

The new system is "a manifestation of the growth of private-equity relative to public equity," said Jay Ritter, a finance professor at the University of Florida in Gainesville, pointing to the record-setting pace of private-equity buyouts of public companies recently. (For more on Goldman's product, see Breakingviews column.)

Traditional mutual funds -- one of the main investment tools at the disposal of individual investors -- are also limited in the amount of unregistered securities they can buy or sell. Hedge funds, by contrast, have more freedom to buy unregistered stocks and bonds.

Indeed, bankers and capital-markets executives at rival firms say that, at GS TRuE's debut, hedge funds were prominent among buyers for the issue by Los Angeles-based Oaktree.

Some investor advocates criticized the trend of selling more securities faster with less disclosure. "It becomes much more of a buyer-beware marketplace with little regulatory oversight or protection," said Steven B. Caruso, a New York lawyer who represents investors in disputes with Wall Street.

Business Backlash

Goldman's move partly reflects a business-community backlash against increased regulation of public-company accounting practices -- a favorite theme, as it happens, of Treasury Secretary Henry M. Paulson Jr., who is also a former Goldman chief executive.

Wall Street executives said the market offers an alternative to companies that don't want to wait for regulators to approve their financial disclosures needed for an initial public offering, which can take 90 days or more.

They also said it offers a haven for firms that don't want to be subject to what Oaktree described as "the full panoply of regulations applicable to publicly traded companies in the United States." In a memorandum describing the stock sale, Oaktree added that staying private would avoid "pressure to describe the company as one capable of steady growth, whereas our underlying business is actually quite variable."

Although the Oaktree offering was sold to only about 50 buyers, it traded at roughly the same multiple of expected 2008 earnings as Fortress Investment Group LLC, a comparable alternative-investment manager that recently sold stock in a conventional initial public offering, according to Wall Street traders.

In other words, the Oaktree stock traded without a price discount that would reflect the lack of a public market with multiple dealers. In that respect, the new market passed an important first test. If stocks traded at too much of a discount, that might dissuade other companies from listing there.

What History Says

Bankers at rival firms -- many of which are developing similar systems -- predict that there will be consolidation among the different platforms.

"History in other markets would indicate that this will converge into a single platform," said Daniel Simkowitz, a managing director in capital markets at Morgan Stanley, which advised Oaktree on the issue.

Indeed, Nasdaq Stock Market Inc. is in the home stretch of getting approval for a similar unregistered trading facility for smaller companies called Portal. Another securities firm, Friedman, Billings, Ramsey Group Inc., has sold unregistered stock for numerous companies in real estate, energy and lodging.

Goldman executives said one reason they launched their own system solo, without asking other rival securities firms to participate, was to insure control over the number of investors in any particular security. That is crucial, they said, because any company that goes over 499 investors must register as a public company.

That 499-investor limit, said one executive of a top private-equity firm, is one reason why such buyout firms aren't likely to rush pell-mell into this type of new issue for their portfolio companies. The buyout firms want to attract far more investors to make sure they get the best prices for their stock, he explained.

'New Tool' in the Kit

Rob Pace, a senior capital-markets executive who played a lead role in developing the Goldman system, called such issues "a new tool in the tool kit" for investors, filling out a spot between harder-to-trade traditional private placements and public offerings.

Mr. Pace noted that Goldman still believes "the U.S. public capital markets are the deepest and most liquid," and will continue to represent "a more prevalent way to raise equity capital."

Goldman also said companies that issue stock on its system must promise to issue quarterly, annual and event-related financial reports comparable to those of public companies. However, they don't have the same obligation for widespread dissemination of detailed business information that can be of use to competitors.

Gregg Weinstein, a Goldman trading executive who also worked on the system, said Goldman doesn't "have any expectation that we're going to be able to stand alone in this product forever." But, he said, working with other dealers on the first issue would have risked delays.
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Postby Gouda » Thu Aug 16, 2007 5:37 am

NASDAQ to open largest Private Stock Market.
Completely unregulated and insulated.
Laundering and black financing enters a new era.

Perhaps this will also persuade the LSE to reconsider its rebuff.

Furthermore, as I said above, this also looks like more preparation for a public wipe out AND the planned global gating of the economy. Once the exchanges are merged globally, global private exchanges can be set up and a parallel private economy can exist institutionally (which is different from it how it exists now, via black markets, offshoring/tax havens, and clearing houses) and thus legitimately - unquestioned by society, politicians, or the media - free of regulation, transparency or oversight. An elite capital fascist's dream.

From the article: These markets are creating an alternative and exclusive investment world buffeted from the turmoil that has roiled the major stock indicators in recent weeks.


Nasdaq Gives High Rollers A Market Free Of Regulation ... 01170.html

Nasdaq is set to launch tomorrow what its executives are calling one of the most significant developments on Wall Street in decades -- a private stock market for super-wealthy investors.

Minimum requirement for traders: $100 million in assets.

Any private firm can list on Nasdaq's new platform, which is called the Portal Market, and raise money by selling stock to an elite group of shareholders. These companies would remain private and not have to make public their financial statements or submit to federal regulation, such as the Sarbanes-Oxley corporate accountability law.

Once a tiny influence on the markets, private money has gained unprecedented power on Wall Street. This year, the biggest deals have been swung not by public companies, but by private-equity firms that are spending hundreds of billions of dollars to buy household names, such as Hilton Hotels, Sallie Mae and Chrysler, and turn them into private companies.

For the first time last year, corporate America raised more money -- $162 billion -- from private investors than from initial public offerings, which raised $154 billion from the three major U.S. stock markets -- Nasdaq, the New York Stock Exchange and the American Stock Exchange.

The boom in private money has become so important to the financial system that major investment banks, including Goldman Sachs, Merrill Lynch, Lehman Brothers and Citigroup are setting up rival private stock markets of their own. But none will be as large as Portal, which will list the shares of about 500 firms on its first day of trading.

These markets are creating an alternative and exclusive investment world buffeted from the turmoil that has roiled the major stock indicators in recent weeks. In the public markets, investors dumped stock during a credit crisis caused by the deteriorating mortgage industry. Private-market traders generally are sophisticated financial groups that take a long-term view of their investments.


The private market, Marks said, shields companies from regulation and from wild swings in their share prices that are caused by a temporary drop in earnings or a bad rumor.

In just a few years, Nasdaq officials predict, stock offerings on private markets will far exceed IPOs on public exchanges.

"It's a transformational development in the capital markets," John Jacobs, executive vice president of Nasdaq, said of Portal's arrival.

The rise of private money has created a new class of powerbrokers on Wall Street who have enriched themselves even as they have provided billions of investment dollars to companies in all kinds of industries. But the trend is causing a backlash among working-class Americans who generally are shut out from investing directly in those circles, said Colin Blaydon, director of the Center for Private Equity and Entrepreneurship.

"While there has been great value creation in the American economy, it has not gone to the large bulk of American citizens," Blaydon said. "It has gone to the very top slice -- and I mean the very top slice -- with no increase of real incomes of American workers, including the middle-class management class. And that is something that people sense in their guts. They know they are not better off, and yet there are a handful of people who are extraordinarily better off."

Portal is the first centralized private stock market for an elite class of investors called Qualified Institutional Buyers, or "QIBs," that was created in 1990 by securities rule 144A. This law defined QIBs as investing institutions with at least $100 million in assets. It also allowed private companies to raise money by selling shares only to QIBs and remain exempt from regulatory scrutiny. These firms, however, disclose their financial statements to their investors.


Analysts say the new ease-of-use is another incentive for super-wealthy investing groups to shun the public markets and focus on making money in the private sphere.

Going private is also becoming increasingly attractive to public companies that must spend large sums to comply with complex accounting regulations that are part of Sarbanes-Oxley. "There's definitely a growing desire to get away from the public markets," Blaydon said.
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Postby Gouda » Thu Sep 20, 2007 2:14 pm

And from the new home of Halliburton - in the money-laundering and meta-group terror-financing center of the world:

Dubai to buy large stake in Nasdaq [and the London Stock Exchange] ... change.php

If the deal is completed, Dubai would become the first Middle East government to own a large stake in an American stock exchange. It also is expected to become the largest single investor in Nasdaq.

The deal by the Borse Dubai would give Dubai a stake of 20 percent to 30 percent in Nasdaq, the largest electronic stock market in America, and about 30 percent in the London Stock Exchange, according to people who have been briefed.

In exchange, the Nasdaq would receive the OMX Group, a stock exchange based in Stockholm that also operates in Helsinki, Copenhagen and several other countries in Scandinavia and the Baltic States. With a 17 percent share, Horizon Asset Management of Seattle is now Nasdaq's largest investor, according to the exchange.


Wait, what's this? On the same day?!!

Qatar agency takes stake in LSE
AP/Yahoo News Link

LONDON - The Qatar Investment Authority said Thursday it had acquired a 20 percent stake in the London Stock Exchange, the same day that Borse Dubai announced a deal to acquire the Nasdaq Stock Market's 28 percent stake in the LSE.

The London Stock Exchange, which declined to comment earlier Thursday about the Dubai deal, welcomed the Qatar investment. It said it had a long-standing relationship with the Qatari investors based on plans to develop the market in Qatar.

"The exchange believes that, given the strength of Qatar's economy and the development of Doha as a major financial center, there are significant opportunities to build further this relationship to the mutual benefit of both parties," it said in a statement.

The quasi-governments of the Emirates, which are quasi-businesses, now own the exchanges of the world's two capitalist superpowers (NYSE-Euronext not included at the moment). It seems that financing for black operations has just been upgraded along with the further merger of some part of the global terror business elite. Perhaps the alignment of bourse mergers can tell us a little bit about the alignment of elite factions.
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Postby Gouda » Fri Sep 21, 2007 4:00 am

Along with the merger of transnational elite fucks that these deals signify, this also marks a gradual, heavily-armed TRANSITION from Oil/Crude economies (and the petrodollar) to the light sweet virtual Global Equity economy. The dollar and the US economy can't be relied on anymore, so they know where to invest: in the global corporate market order. Halliburton, Carlyle Group, Wall Street and London know where to go.

In addition to the oil-corruption-and-terror behemoths of Dubai and Qatar, Abu Dhabi has also bought in to the merging market architecture of global equity, specifically buying a huge stake in the Carlyle Group. In fact, with all the US military presence there, the Emirates have become the Mecca of the global military-financial complex. Again we see how the wars for strategic energy are in full harmony with the plans of the transnational financial elite; the close relationship between war, oil, terrorism, and high finance. The USA did not go to war for oil for itself: it went to war to finance the consolidation of a stateless plutocracy.

There are still a lot of "emerging markets" out there, so their vampiric (non)work is far from done.

Dubai bourse buys stake in Nasdaq and London exchange ... /deals.php
LONDON: While American and European companies have been shelving acquisitions after jitters in the credit market dried up potential financing, oil-producing countries in the Middle East showed Thursday that they do not share the same limitations.

In a series of multibillion-dollar deals, Dubai, Qatar and Abu Dhabi reached out to acquire significant stakes in three stock markets and a U.S. private equity firm, illustrating their increasing appetite for investing the growing wealth from record oil prices in high-quality assets abroad.

...And finally, the government of Abu Dhabi agreed to buy a 7.5 percent stake in Carlyle Group, a U.S. buyout firm, for $1.35 billion.

But the Democrats will stop this!!!

Oh, never mind:

But the speaker of the U.S. House of Representatives, Nancy Pelosi, said that while the deal raised marketplace issues, it was not a national security concern, Reuters reported. "It doesn't raise alarm bells," Pelosi, a Democrat, said.
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Postby Gouda » Mon Mar 17, 2008 10:59 am

There seems to be a problem in the markets.

That's good too. There will be consolidation.

Even meltdown leads to this...

"New world order," buyers seen for banks: CreditSights ... ws&sp=true

NEW YORK (Reuters) - Financial firms face a "new world order" after a weekend fire sale of Bear Stearns and the Federal Reserve's first emergency weekend meeting since 1979, research firm CreditSights said in a report on Monday.

More industry consolidation and acquisitions may follow after JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) on Sunday said it was buying Bear Stearns (BSC.N: Quote, Profile, Research) for $236 million, or deep discount of $2 a share, a fraction of the $30 price on Friday and record share price of about $172 last year.

"Last evening the Bear Stearns situation reached a crescendo, as JPMorgan agreed to acquire the wounded broker for a token amount of $2 per share," CreditSights said. "The reality check is that there are many challenged major banks, brokers, thrifts, finance/mortgage companies, and only a handful of bonafide strong U.S. banks.

CreditSights said it lowered its broker, bank and finance company recommendations to "market weight" due to the credit crisis and stresses in the market.

In the event of future consolidation, potential acquirers identified by CreditSights include JPMorganChase, Wells Fargo, US Bancorp, Goldman Sachs and Bank of America (BAC.N: Quote, Profile, Research), once it works through its recent agreement to acquire Countrywide Financial Corp., (CFC.N: Quote, Profile, Research) the largest U.S. mortgage lender.

Possible foreign bank acquirers include HSBC, Barclays and Canadian firms, said CreditSights, which said the Bear Stearns deal should be good for bondholders.

"The debt side whether at the parent level or on the broker/dealer levels seems to be in rather good shape with the capital structure to be assumed by JPMorgan at deal close," which is expected in about 90 days, CreditSights said.

Financial stocks are likely to trade lower but the overall market may begin to stabilize, according to Morgan Stanley's chief U.S. credit analyst.

"I view the stabilization of Bear Stearns coupled with the liquidity action by the Fed as constructive for the proper functioning of the lending system," said Gregory Peters, chief U.S. credit analyst at Morgan Stanley. "Financial stocks will trade lower, but these are important steps in the path of trying to stabilize the credit markets."
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