Posted on 07/31/2010 5:46:33 PM PDT by bigbob
Part Warren Buffett and part Dolly Parton, the 49-year-old native of the Bronx borough of New York owns or has an equity stake in companies that are as eclectic as her wardrobe — and include brand names such as Arizona Ice Tea, English Leather cologne and Isotoner gloves.
Through her private-equity firm Patriarch Partners she also owns companies with some of the world's most iconic names, including mapmaker Rand McNally, firetruck manufacturer American LaFrance and Italian factory-machine maker Ansaldo Sistemi Industriali.
In 2005, Tilton acquired Mesa, Ariz.-based MD Helicopters, a company founded by Howard Hughes.
Although diverse, the companies had a common trait before Tilton began investing in them. They produced well-known products but were about to go out of business.
"We turn dust to diamonds," she said at the Anaheim Convention Center. "We buy what everybody else tosses away."
That came about by the feds with the CRA as a club forcing banks to give mortgages to people based more on race than on ability to repay. This fueled the real estate bubble and caused all the other evils you blame on Ms. Tilton.
The reason that banks were giving loans to anybody with a pulse is because they were immediately turning around and selling that bad debt to investment houses - which turned around and securitized the debt into tranches and sold them to investors. Those investors ended up getting burned very badly - including a lot of pension funds.
Ms. Tilton securitizing bad debt to "save" failing companies is absolutely no different than the securitized debt from bad mortgage loans. They both end up hurting the end investor.
Shame on you for not bothering to even learn what Ms. Tilton does for a living.
I don’t what to do .so I leave a comment.
I see a substantial difference between failing companies and individuals with bad mortgages.
A failing company can bring in new management. A defaulting mortgagee can not get a brain transplant.
A failing company can find new markets for its products and introduce new products. Under the right circumstances, workers in saved companies can "get religion" and realize that the company succeeds or fails due to their efforts. And, that they are far better off with jobs, even at lower pay and benefits, than without. In a practical sense, a defaulting mortgagee can not retrain into a new career, or even update his existing skills with the pressures of a default on him. And, worst of all, defaulting mortgagees tend to be clumped into regions where unemployment is already high. If he has to move for a new job, the odds of avoiding foreclosure are minimal.
The bottom line is that debt from turn-around situations is a far better bet than debt from defaulting mortgagees, despite your claims of equivalence.
The bottom line is that they are both high-risk bad debt that is being securitized, rated AAA, and sold to investors that are depending on the accuracy of the rating.
The facts are that investors have lost very large amounts of month from all of these forms of securitization.
Ms. Tilton is no heroine. She plays the same games as the rest of the investment bankers.
“month” should be “money”. It’s late. Goodnight...
bookmark
Frankly I don’t think you know what you’re talking about. People have been buying and re-fitting companies to put them back on their feet since the beginning of capitalism...where there is a good product.
You seem to want to paint all capitalists with the failures of the dhimokraps and crashing of the majority of the people’s retirement funds by buying up Fannie/Freddie’s home mortgage scams...you do not seem to understand that this is a different ball game altogether.
Your post implies you think the fund managers etc., who buy these pooled asset instruments are untrained professionals.
In reality, isn’t it the fault of the portfolio managers who buy the junk than it is the person who wishes to sell the junk?
Caveat emptor my friend caveat emptor. We aren’t talking about little old ladies on the street corner being sold these instruments, they are professionals who know the risks.
They are professionals who like to gamble, and most of them aren't that intelligent to tell you the truth.
How do I know? Because I dealt with high-end fund managers for close to ten years.
Okay, so the fund manager who "gambles" would have that reflected in his/her performance yes? And if you invest with a fund manager or someone who represents your retirement fund invests in said "gambles" they are to blame not the guys who bundle the investments right?
Everyone has blame to go around. The people that bundled the investments did so fraudulently. The ratings agencies had willful neglect in their duties. The fund manager was looking for quick commission dollars on the investment, and the customer wasn't doing their due diligence with regards to picking a fund manager.
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