Change is in the Air

There seems to be a fresh realisation that people do not necessarily have to put up with the tyranny of authoritarian regimes, despite the apparent demonstrations of power by those who dictate their lives. Thus: Tunisia and Egypt. Thus perhaps, with blood and violence: Libya and Syria, with Bahrein and Yemen in the rear, signalling to the Saudis that change is circling the airspace near them. But the Arab Spring may only be a small part of the story.

Authoritarian rule of the many by a privileged few, is not restricted to primitive dictatorships. The anger of their populations is shared by those in the democratic, “free” West. People are on the streets in Greece and Spain where the talk is of revolution. The aims remain incoherent because the annoyances are so widespread, but the anger is palpable. And it appears to be growing through the EU, even though their governments have all been democratically elected.
Continue reading Change is in the Air

The Big One is Coming

Two brothers. One got a real job and lived modestly at home with his parents. The other got the gambling bug and got clever at it. He found all sorts of obscure forms of gambling and developed sophisticated new techniques and methods and made a lot of money and lived a wild lifestyle. Till he lost it all and more, much more. And had to go to his father and plead to be bailed out. The amount was more than his father could afford. So he started to charge the working brother for his food and accommodation, and explained to his wife that they would have to tighten their belts so as to pay off the son’s huge debts. The brother grumbled but paid up. The important thing was, what did the wife do?

She considered her options. She could just walk away, but she wanted to keep the family together. The really important thing was to make sure it never, ever, happened again. After much thought, she told her husband she would only stay if he made the feckless one stop gambling and made him realise he had been gambling with all their lives. In addition he would have to be made to get a real job like his brother. And he would have to repay all the money that had been spent to bail him out, both to the parents and to his brother. If the husband didn’t agree with all that, she would leave.
Continue reading The Big One is Coming

Merger Arbitrageurs: Corporate Rapists or Just Plain Thugs

The financial world uses all sorts of obscure language to hide their shabby activity from the public gaze. If the general public was aware, it might demand laws to make much of the action illegal, or at least terminally taxable. The phrase, merger arbitrageurs, is a typical example of such obfuscation. It sounds fairly technical and sophisticated, but is really nothing of the kind. It’s simply making money betting on the outcome of takeovers, either succeeding or falling apart.

A lot of money can be made. For example, hedge fund manager, Tyrus Capital, launched by someone referred to in the Financial Times as a “star trader”, raised $800m on its first day and doubled that in a matter of months. Imagine a humble manufacturer of widgets, employing real people, attracting such support. And the activity is expected to grow further. Tim Beck, a senior research analyst at the Stenham hedge fund told the FT. “Corporations have improved their balance sheets and cut fat. They have a lot of cash now. To grow in the difficult economic environment, they will have to purchase or merge with other companies.”
Continue reading Merger Arbitrageurs: Corporate Rapists or Just Plain Thugs