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Business, Economics, and Taxes 2: That's Why We Fight to Take the Means Back

Fun times:
  • The Federal Reserve raised its benchmark interest rate as expected on Wednesday, marking a sharp policy turnaround for an economy increasingly shaped by the war in the Middle East.
  • This is the first rate hike since 2023 and is designed to cool spending and prevent inflation from becoming more entrenched. But it also means higher borrowing costs for Americans already struggling to afford homes, cars and other big-ticket purchases.
  • Stocks fell, with the Dow seeing its worst day in nearly a month, while the 10-year Treasury yield moved back to its highest level since 2007 as markets digested Fed Chairman Kevin Warsh’s remarks.
  • Raising rates could weaken an economy that is already showing signs of strain, increasing the risk that the Fed’s inflation fight could come at the expense of economic growth.
  • The decision to raise rates was unanimous among the Fed’s rate-setting committee, including Warsh, who was handpicked by President Donald Trump with the aim of lowering rates. The president earlier this year joked he would sue Warsh if he did not.
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Russell Jaslow said:
Formula 1 gets criticized for going to some of these despot countries. But when F1 went to Azerbaijan, I learned a lot about that country. And not necessarily things I feel comfortable about...
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That is the one with the castle at the turn, right? That is so cool.

Apparently it's an authoritarian hellscape where you disappear in the middle of the night if you are an investigative journalist. So, par for the rest of our ME buddies.

Free fusion can't come soon enough to push every gas station nation back to the stone age, starting with Moscow.
 
Kepler said:
That is the one with the castle at the turn, right? That is so cool.
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Yes. And using the actual castle wall as a wall for the track. It is one of the most picturesque cool looking courses (and it does produce some good races, better than most street circuits). I'll give them that.
 
To be honest, I don't get it. We have all the evidence we need since 1980 to prove that the average American gets fucked every time there's a merger. A huge merger like this is monopolistic by definition. So, why, no matter what "concessions" the fat rich fuck makes to make the deal would we ever allow it? It's fucking bullshit.
 
ScoobyDoo said:
To be honest, I don't get it. We have all the evidence we need since 1980 to prove that the average American gets fucked every time there's a merger. A huge merger like this is monopolistic by definition. So, why, no matter what "concessions" the fat rich fuck makes to make the deal would we ever allow it? It's fucking bullshit.
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Especially when, five or so years down the road, they end up breaking that deal with the government and start consuming more marketshare via further acquisitions. It’s Lucy holding the football for Charlie Brown, each and every time.
 
St. Clown said:
Especially when, five or so years down the road, they end up breaking that deal with the government and start consuming more marketshare via further acquisitions. It’s Lucy holding the football for Charlie Brown, each and every time.
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John Oliver pointed out all the BS last night except he was talking about United Healthcare. Same thing.
 
ScoobyDoo said:
To be honest, I don't get it. We have all the evidence we need since 1980 to prove that the average American gets fucked every time there's a merger. A huge merger like this is monopolistic by definition. So, why, no matter what "concessions" the fat rich fuck makes to make the deal would we ever allow it? It's fucking bullshit.
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The Government doesn't love you, figure it out. And you don't like competition, like I said figure it out.

This is what you vote for. LMFAO
 
AI and I plot how to Luigi bad actor companies:

Kepler: Are there ways for a public movement to kill a company so we can watch in realtime? Like say a company poisons a river and then just uses its money to prevent any legal action. Is there a mechanism where the public economically "lynches" the company, dramatically, by completely boycotting them and destroying them?


AI: In pure economic theory and market history, a pure consumer boycott almost never kills a major corporation on its own. [1]
While the public frequently attempts to "starve the beast" via massive grassroots outrage, academic studies in political science and economics reveal that a traditional consumer strike rarely inflicts fatal damage. However, there is a very specific, modern mechanism that can destroy a company in real time. It is not an economic "lynching" driven by consumers refusing to buy things—it is a coordinated, systemic short-squeeze and capital starvation loop driven by the financial and logistics sectors. [1]
If a massive company poisons a river and uses its wealth to capture the legal system, the public cannot easily destroy it just by boycotting its products. To watch a company collapse in real time, the public movement must trigger a chain reaction that targets the company's liquidity, counterparty risk, and debt covenants. [1, 2]
Here is the actual multi-step mechanism that forces a corporate death spiral:

1. The Weaponization of Counterparty Risk
A consumer boycott usually fails because a giant conglomerate has diversified business-to-business (B2B) revenue streams that the general public cannot touch. The real-time destruction begins when activists stop targeting the company itself and start targeting its counterparties (its banks, its insurance providers, and its software suppliers). [1]
  • The Mechanism: If a public movement creates such immense reputational damage that a primary creditor or insurance firm faces its own secondary boycott, that creditor will invoke "moral turpitude" or risk clauses in their contracts.
  • The Result: If the bank refuses to roll over the company's short-term revolving credit lines, the company is instantly starved of cash. In modern business, a company does not die from a lack of profit; it dies from a sudden lack of liquidity.

2. Triggering Debt Covenants and the "Short Loop"
Large corporations survive on debt. When they borrow hundreds of millions of dollars, the loan contracts contain debt covenants—strict mathematical rules stating that the company must maintain a certain credit rating or stock price.
  • The Mechanism: If a public movement successfully drives down a company's public image, institutional investors and retail traders will aggressively short the stock.
  • The Real-Time Collapse: As the stock price plummets under immense public shorting pressure, the company violates its debt covenants. This gives lenders the legal right to demand immediate repayment of their entire loan. If the company used its cash to pay off lawyers to cover up the river poisoning, they cannot pay the bank, forcing an immediate, public filing for involuntary Chapter 11 bankruptcy. [1]

3. The Modern Precedent: The Death of Arthur Andersen
While not triggered by an environmental disaster, the fastest real-time execution of a corporate giant in modern history was the collapse of Arthur Andersen in 2002 (one of the "Big Five" global accounting firms involved in the Enron scandal). [1]
  • The public and political fury was so swift that within a matter of weeks, the firm's clients realized that having Arthur Andersen's name on their financial audits was a reputational liability.
  • In a massive institutional exodus, hundreds of clients fired the firm simultaneously to protect their own skin. The company went from 85,000 employees to dissolution in a spectacular, real-time freefall.

Summary
The public cannot easily lynch a corporation by withholding their pocket change, because the modern corporate structure is insulated against the individual consumer. But if the public movement successfully converts consumer anger into systemic financial risk, they can force the company's own lenders, insurers, and B2B partners to turn on it to save themselves. When a corporation's own capital network decides to isolate it, the company collapses in days.
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And the beauty of it is the same inexorable forces that drive the rich to impoverish us will drive them to murder each other.

images

fig 1. "Siamese fighting fish. Fascinating creatures."
 
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Nope. Not maddening. The heads of the AI companies wanted him, love him, and now can do whatever the hell they want because of him. This was all foreseeable. Anyone who says otherwise is just another one getting their face eaten by a Leopard.
 
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