Sunday, January 20, 2019

Greed, Leverage Boys Epitomize Davos

The Independent reported:

This year, hedge fund (and private equity) billionaires will fly to Davos in private jets to discuss the threat of climate change, and millionaire CEOs will discuss inequality at lavish drinks events.

...Davos provides a rare opportunity for world leaders and corporate executives to discuss global issues quietly in public and private meetings.

“Judging by the state of the world right now, 10 years on from the financial crisis and the dysfunctional state of global politics, I would suggest that these annual events have achieved the sum total of diddly squat,” says Michael Hewson, chief market analyst at CMC Markets UK.
Hardly, the annual gathering benefited the pocketbooks of the greed and leverage boys. Three years ago OXFAM called the Davos gathering a "busload of billionaires."  Four years ago the WEF identified inequality as the most significant trend.  It identified severe income disparity as a global risk starting in 2012.

While high earners experienced rising wages for the last decade middle income and low wage workers suffered.

The greed and leverage boys continue to have access to preferred carried interest taxation.

Their numbers reached an all time high in 2018.  FT reported:

As of January 2018, a record 2,296 private equity funds were active in the market, seeking to raise an aggregate $744bn, representing a 25 per cent increase compared with a year earlier.
I have experienced the impact of private equity ownership more than once in my career.  After the latest PEU takeover coworkers lost jobs, employees received reduced benefits and management bullying escalated.

Our executives have an equity stake in the company, workers do not.  C Suiters look after their interests to the detriment of customers and employees.  Busloads of billionaires have long set a self-serving agenda at Davos and for that the world has suffered.

Update 1-21-19:   ZeroHedge reported  "... no less than 1,500 private jet flights will land in Davos over the five days of its duration: a 50% increase in both private jets and toxic environmental emissions compared to last year, when roughly 1,000 private jets descended upon Davos."  The billionaire boys club begins in earnest.

Update 1-22-19:  At Davos Prince William will challenge business leaders to improve emotional and mental wellbeing in their workplaces.  I can attest to the damage done by PEU practices to employee mental health.  Greed is distinctly uninsightful, one-sided and creates many losers.

Update 1-23-19:  Jesse'sCafeAmerican wrote:  "The news of the day from Davos was almost unbelievably scripted and vacuous behind the headlines, while at the same time mildly nauseating.   Much like so many modern reality TV shows."

Update 1-24-19:  The Davos boys met to solve the very problems they created in vastly enriching themselves.  Bono had a big day for a PEU.  He called capitalism a wild beast.

Update 1-25-19:  Solving the world's problems while further enriching billionaires.  The game is rigged against common people.

Update 1-26-19:   One member of the super rich stated "the ordinary people who drive a prosperous economy are instead impoverished in favour of the bank accounts of billionaires."

Update 1-27-19:  LATimes reported on the massive increase in PEU founder wealth. "The fortunes of a dozen 2009 Davos attendees have soared by a combined $175 billion, even as median U.S. household wealth has stagnated."  Davos worked for the billionaire boys club for the last decade, not for the common person. "Compensation for chief executives in America’s largest firms is now 312 times the annual average pay of the typical worker, compared with about 200 times in 2009, 58 times in 1989 and 20 times in 1965."