The Exile: Investors Prefer Doing Business With Hugo Chavez Over Billionaire Koch Brothers

1 posts

President Camacho

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.

As I revealed last September, the Kochs have a long history of tapping into socialist program s, despite their staunch libertarian rhetoric. Starting with their father, Frederick C. Koch, who amassed the family fortune building up Soviet oil infrastructure in the 1930s during Stalin’s first Five Year Plan , the family has been sucking on the big government teat for as long as they’ve been in business, using government subsidies to maximize their own profits, even while funding the libertarian movement and trying to deny government spending on anyone or anything else.


A few weeks after Venezuela announced the nationalization, The Economist predicted that it would have dire consequences for Venezuela’s economy, and warned that the government might not honor the fertilizer plant’s several hundred million dollars in debt obligations. But according to Bloomberg, the price of the plant’s bond notes didn’t go down at all—it went up by 33 percent! That’s right, as soon as Hugo Chavez announced the takeover, the bonds became more valuable, meaning that bond holders believed that the business was worth more with Koch Industries out of the picture.

This is important and worth repeating: Koch Industries’ involvement in the fertilizer plant was actually a drag on the operation and investor confidence. Getting rid of the Koch’s stake in Fertinitro had the effect of boosting the value of the company, which is funny considering the fact that Koch Industries was the only major private investor in the fertilizer plant.

But it makes perfect sense. Who would want to invest in a company owned by a billionaire freeloader like Charles Koch, who siphons funds out of other people’s pockets and into his personal bank account, while adding nothing of value? No wonder bond holders reacted so positively to the nationalization.

full article at link: