“Let Them Fail” – Billionaire Explains To Gobsmacked CNBC Host How Capitalism Is Supposed To Work
by Tyler Durden
ZeroHedge.com
Thu, 04/09/2020
With millions of Americans sitting at home working on their laptops, the passive viewership of cable news channels like CNBC must be waaaay up this month, as finance nerds welcome normies to the strange and often hilarious world of live markets news.
In terms of drama, CNBC is usually pretty staid. But every once in a while, there’s a fight, or a contentious interview, that really grabs people’s attention. On Thursday, such a confrontation occurred during “the Halftime Report” as Scott “The Judge” Wapner interviewed early Facebook investor and uber-wealthy VC investor Chamath Palihapitiya.
Wapner brought up the question of the bailouts for main street and corporate America that the Trump Administration has packaged as part of its $2.2 trillion plan. Palihapitiya raised an issue with the program, arguing that the administration would be using taxpayer money to prop up “zombie companies.”
Then Wapner asked: “Are you arguing to let airlines fail?
Palihapitiya, who was speaking on the phone, responded with a very assertive “Yes.”
Wapner seemed blown away by this. Struggling to process the answer he had just been given, he followed-up, incredulously: “But how does that make sense in the broader scheme of the economy.”
Then Palihapitiya went off.
“This is a lie that’s been propagated by Wall Street. When a company fails, it does not fire its employees...it goes through a packaged bankruptcy…if anything, what happens is the employees end up owning more of the company. The people who get wiped out are the people who own the unsecured debt and the equity…but the employees don’t get wiped out and the pensions don’t get wiped out.”
[…]
“And if a bunch of hedge funds get wiped out – what’s the big deal? Let them fail. So they don’t get the summer in the Hamptons – who cares.”
Out in the real world, people say mean things about the rich all the time. But it doesn’t happen quite as often on CNBC. In fact, sometimes CNBC’s hosts seem downright confused when people don’t seem to care about asset prices above all else – like that time Rick Santelli said we should all just go get infected and let grandma die to save the stock market. What’s more, Wapner seemed almost personally insulted by Palihapitiya’s response.
As to why, well, we can’t be certain.
Because after all, airlines as an industry are especially prone to bankruptcy (the president once owned an airline that went bankrupt), even under completely normal circumstances.
Hell, even if such a vitally important company as the aerospace and defense giant Boeing went bankrupt, its factories in Washington State wouldn’t stop running.
Remember when the CEO of Boeing demanded a taxpayer-funded bailout, but said he wouldn’t accept the money if the federal government demanded a stake in Boeing in return (note: exchange money for equity is standard practice for…literally every investor in the world)?
How is Boeing able to so blithely bite the hand that feeds? Because it has alternatives should the bailout not come through. If Boeing really needs the money, it’s free to sell stock and raise cash – the opposite of what it did for decades when it bought up shares, shrinking its float and helping maintain a buoyant valuation.
The Rest…HERE
Just in response to Boeing, if the company is failing with the guaranteed massive taxpayer income they derive from the no bids military contracts they enjoy, good GD riddance. Additionally if you look closely at what Boeing did with the MAX8, they took 2 new oversized power plants and hung them under an old fuselage design, making an extrapolation that rendered a good design – the 737 un-airworthy. The master minds behind this abomination should be charged with first degree intentional homicide, indicted, tried, and promptly hung from the neck until dead. We should all know by this time that our fascist flunkies running shit show USA are the criminals, and the criminals aren’t going to hold themselves accountable. Wake up men. While the so called tough guy men of America cower in their closets over a half baked bullshit story about a virus, the thuggery goes vertical. Men in this country today apparently don’t have the stones to defend their children and grandchildren from a handful of murderous thugs. Good Goddamn riddance then. Curl up in the fetal position, it’s disgraceful. Cowards.
Take our congress for instance, I can count on one hand the number of these people that I might consider PISSING on if they caught on fire.
I take that back, I’d PISS on everyone of them if I were pissing gasoline.