Mitt Romney et ses succès

David Stockman, qui était le directeur du budget sous Ronald Reagan, a ceci à nous dire de Mitt Romney:

Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise.

Nevertheless, Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. According to the campaign’s narrative, it was then that he became immersed in the toils of business enterprise, learning along the way the true secrets of how to grow the economy and create jobs. The fact that Bain’s returns reputedly averaged more than 50% annually during this period is purportedly proof of the case — real-world validation that Romney not only was a striking business success but also has been uniquely trained and seasoned for the task of restarting the nation’s sputtering engines of capitalism.

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped and stripped businesses. He did not build enterprises the old-fashioned way — out of inspiration, perspiration and a long slog in the free market fostering a new product, service or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn « roll-ups » and then deliver them back to Wall Street for resale — the faster the better…

When Romney opened the doors to Bain Capital in 1984, the S&P 500 stood at 160. By the time he answered the call to duty in Salt Lake City in early 1999, it had gone parabolic and reached 1,270…

The Wall Street Journal examined 77 significant deals completed during that period based on fundraising documents from Bain, and the results are a perfect illustration of bull-market asymmetry. Overall, Bain generated an impressive $2.5 billion in investor gains on $1.1 billion in investments. But 10 of Bain’s deals accounted for 75% of the investor profits.

Accordingly, Bain’s returns on the overwhelming bulk of the deals — 67 out of 77 — were actually lower than what a passive S&P 500 indexer would have earned even without the risk of leverage or paying all the private-equity fees. By contrast, the 10 home runs generated profits of $1.8 billion on investments of only $250 million, yielding a spectacular return of 7 times investment…

The startling fact is that four of the 10 Bain Capital home runs ended up in bankruptcy, and for an obvious reason: Bain got its money out at the top of the Greenspan boom in the late 1990s and then these companies hit the wall during the 2000-02 downturn, weighed down by the massive load of debt Bain had bequeathed them.

In fact, nearly $600 million, or one-third of the profits earned by the home-run companies, had been extracted from the hide of these four eventual debt zombies.

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Publié le 18 octobre 2012, dans Politique Américaine. Bookmarquez ce permalien. 3 Commentaires.

  1. en bourse, c’est pareil, ce sont les 2 ou 3 gains qui te font gagner l’année, le reste est perdant . Le but est d’avoir plus que son son capital de départ et d’en vivre. Maintenant i on lui reproche de l’avoir fait durant les bonnes années, bah oui et alors… on gagne jamais à tous les coups à ces petits jeux.

    • Pierre-Yves St-Onge

      Pour l’investisseur moyen, vous avez absolument raison. Le problème ici, c’est que Romney utilise son « expérience de gestionnaire » pour tenter de convaincre les électeurs qu’il est un bon candidat pour sortir l’économie du gouffre. Ses seuls bons coups en tant que spéculateur financier ont été d’acheter des firmes sous-évaluées, de les goinfrer de dettes et de se verser ces sommes en dividendes, et de revendre la carcasse à des investisseurs naifs. C’est sûrement très bien pour lui et ses investisseurs pour se remplir les poches, mais ce ne sont pas des stratégies applicables à un pays.

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