Bill Ackman shows why hedge fund slime tactics need to be regulated

The NYT has an expose of the lengths to which Pershing Square Capital boss Bill Ackman will go to lobby regulators and elected officials to aid him in his campaign against Herbalife.

I've never bought a Herbalife product and generally can't get too enthused about any direct-marketing scheme, be it Amway or Mary Kay or whatever, but like them or not they've been a part of the business scene for generations. Whatever flim-flam and unrealistic expectations they're peddling pales in comparison to what Ackman is doing.

Among other things, he's giving hedgies a bad name. This isn't "capitalism", it's rank cynical opportunism. It's a bully trying to destroy the value of another company with tactics made possible by his deep pockets and political connections.

What would stop this foolishness? A 100% tax on non-productive economic activity. Take the incentive away completely. Let Mr. Ackman and those like him use their talents and their money to make constructive contributions to the society they're a part of.

Many, many entrepreneurs have proven that can be profitable too.

Goldman Sachs' latest straw-spinning trick

You have to admire those guys for their chutzpah.

When GS bought Metro International Storage five years ago the Detroit warehouse network had 50,000 tons of aluminum in storage. At 48 cents per ton per day that's daily rent of $24,000.

Today they're storing 1.5 million tons for a daily rent of over $700,000!

Before Goldman, it took six weeks for an order to be delivered. Now it takes well over a year. Clogging up the supply line has also caused an across the board price increase even if you never deal with GS.

Rumpelstiltskin is spinning in his grave!

Net benefit to society? Zilch... although we all get to pay a little more for aluminum products.

Net benefit to Goldman Sachs? Somewhere in the range of $250 million a year.

A 100% tax on non-productive economic activity would help steer the geniuses who dream up this stuff towards doing something useful.

Forbes feels the love for unions

How gratifying to see one of America's iconic business sites publish something that doesn't feature the usual knee-jerk anti-labor bias. Of course, maybe Adam Hartung inadvertently slipped this one past his editors and we'll next see his byline at the Daily Worker.

By now the story of Hostess' demise is well trod territory. It's been brought to my attention that I've been wrong to pin the blame on hedge fund shitbags. I'm not so sure. Maybe Ripplewood is going to take a haircut on this one, but apparently two bond funds hold all or most of the secured debt.

That means the sharpies who bought the debt at pennies on the dollar back around the time of the original Hostess bankruptcy are going to be sitting pretty as they get paid out in full, while thousands of pensioners will be up Shit Creek without a paddle.

Not to mention that in the course of the last eight years a clique of insiders in the executive suite rewarded themselves with outlandish raises and bonuses while demanding draconian givebacks from the workers and "managing" a venerable company into the ground.

There may be examples extant of hedge funds making a useful contribution to the society at large, but for the most part they are predators who are all too willing to destroy the common good so long as their investors and their management can make a killing.

That's why we need a 100% tax on non-productive economic activity.