Apoi_Viitor
17th January 2011, 16:58
You didn’t hear this on Fox News or the Drudge Report, but on October 10 Venezuela seized and nationalized a massive fertilizer plant part-owned by Koch Industries. The media silence is a bit puzzling. You’d think that the seizure of property belonging to America’s second-largest private company, owned by one of the most powerful families in the country and the bankrollers of today’s libertarian/Tea Party revolution—the billionaire brothers Charles and David Koch–would be considered newsworthy. But no, even though their Venezuela plant was nationalized a whole three months ago, other than a handful of short business-wire dispatches, this has yet to make the news. Even Koch Industries has been suspiciously silent on the matter.
One reason why the Kochs could be keeping the news under wraps is that the nationalization of the fertilizer plant may appear to be bad news for Charles and David Koch, but here’s the big surprise: the Kochs made hundreds of millions on every end of this deal…and even more surprising, bond markets cheered the nationalization. In other words, the free markets championed by the Kochs gave a big thumbs-down to Kochs’ negative influence on the value of the business, while at the same time, the free-market Kochs earned huge windfalls doing business with socialists. No wonder this story hasn’t made the rounds.
Here’s what happened: When Chavez’s nationalization of the plant took Koch Industries out of the picture, bond investors responded by driving up the value of the company’s bond debt by a whopping 33 percent. That means they had a lot more confidence that the debts would be paid back AFTER the free-market Kochs were out of the picture. As every business school flunky knows, price fluctuations of bonds are very much like those of stocks: the more they cost, the higher the confidence in a given company. And that means investors had less faith in the ability of the Kochs to run a tight business operation than they did in a bunch of Venezuelan socialist bureaucrats.
For a free-market family like the Kochs, such a big pro-nationalization thumbs up from the Invisible Hand isn’t just bad PR, it’s downright embarrassing.
http://exiledonline.com/bond-markets-prefer-hugo-chavez-socialism-to-koch-industries-parasitism/
One reason why the Kochs could be keeping the news under wraps is that the nationalization of the fertilizer plant may appear to be bad news for Charles and David Koch, but here’s the big surprise: the Kochs made hundreds of millions on every end of this deal…and even more surprising, bond markets cheered the nationalization. In other words, the free markets championed by the Kochs gave a big thumbs-down to Kochs’ negative influence on the value of the business, while at the same time, the free-market Kochs earned huge windfalls doing business with socialists. No wonder this story hasn’t made the rounds.
Here’s what happened: When Chavez’s nationalization of the plant took Koch Industries out of the picture, bond investors responded by driving up the value of the company’s bond debt by a whopping 33 percent. That means they had a lot more confidence that the debts would be paid back AFTER the free-market Kochs were out of the picture. As every business school flunky knows, price fluctuations of bonds are very much like those of stocks: the more they cost, the higher the confidence in a given company. And that means investors had less faith in the ability of the Kochs to run a tight business operation than they did in a bunch of Venezuelan socialist bureaucrats.
For a free-market family like the Kochs, such a big pro-nationalization thumbs up from the Invisible Hand isn’t just bad PR, it’s downright embarrassing.
http://exiledonline.com/bond-markets-prefer-hugo-chavez-socialism-to-koch-industries-parasitism/