Monday, June 22, 2020

4605 What Wall Street Learned from Organized Crime

4605 What Wall St. Learned from Organized Crime
Two guys named Al: Capone (l) and Dunlop. They didn’t work together. Their lives never crossed. But they were both businessmen of the 20th and 21st Centuries.

Here’s how organized crime makes money: they commit crimes. They sell undocumented pharmaceuticals.  They run gaming establishments. They traffic in captive women, they infiltrate legitimate business… like waste removal, road building and repair, large scale construction and other public works.  They don’t pay taxes.  They lend money.

Yes, they lend money at interest rates slightly north of the payday lenders, pawn shops and credit card companies.  No credit check.  No monthly, weekly or daily billing. The late fees can be painfully expensive.

The private equity funds, hedge funds and peddlers of derivatives and “futures” tend to be more refined and better educated than their soulmates in the real world where concrete is actually made (mostly) out of concrete. They have adopted the methods -- some of them, anyway -- and refined the process.  But they’re all fruits of the same tree.

Here are the parts that they’ve omitted: construction, public works, waste removal, gambling, prostitution and drug sales.  They pay taxes most of the time, although the payment is usually buried in haystacks of complicated paperwork with math that eludes all but the sharpest-nosed forensic bloodhounds of the IRS and the Securities and Exchange Commission.

They have the money lending thing down pat. They lend in return for more than just repayment with interest.  They lend to gain control.  They use that control to perform divisional amputations -- selling off the parts, generally for more than the whole is worth. Those that resist amputation are starved. Employees are thrown on the mulch pile, sometimes with a few haypennies and some help from the public larder, sometimes not.

Scratch a private equity fund that has saved a business with its money, “management prowess” and goodwill and you’ll find all that survived was the company name. If that.

No knees were broken in the creation of this post.  However, some storefront windows may have fallen apart due to street hooligans practicing their fastball using bricks.  There are some old fashioned businesspeople in your area who can offer… um… protection. 

So, that’s what Wall Street learned from organized crime.  Or maybe it’s the other way around.


(TULSA) -- Rally for Trump Held Despite Protests, according to the Los Angeles Times.

(TULSA) -- Rally Fizzles amid empty seats and canceled outdoor rally, according to most other news companies.

(NEW YORK) -- A passerby on the west side of Fifth Avenue, across from the trump tower claims to have seen a bumper sticker that says “Make Bellevue Great Again. Lock Him Up.” We are trying to verify.

(LONG ISLAND, NY) -- Voters in most of Long Island’s 117 school districts approved school budgets last week. The rest will have to re-submit a budget that’s less expensive. The mail-in vote in each case topped the usual in-person vote, a trend in many recent elections.  Voters have a say in school and library budgets each year, unlike in some parts of the country where school boards dictate the results.

I’m Wes Richards. My opinions are my own but you’re welcome to them. ® 
Any Questions?
© WJR 2020

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