I haven’t read the whole article, but most of the 330B is other people’s money, but the 1.9B is what Blackstone made managing it all, it is also probably the net income figure.
As far as blame - remember, a lot of this goes back to RELAXED housing loan standards which were pushed by the politicrats. I ran around as a notary public from 2002-2005 where most of the work is notarizing loan docs and acting as a signing agent (walking borrowers through all of the pages on their loan docs). I saw so many people with both high income and low incomes taking out loans that would be stretching them to the very limits to pay and keep current at very low interest rates on ARM loans or interest only loans, all of which was based on the idea that home prices would appreciate and after their initial low interest period or interest only period they would be able to refi easily on the appreciated home and lock in a standard 80/20 30yr fixed rate mortgage.
Real estate agents and mortgage brokers were straight up lying to their clients, because they just get paid to close deals. Pushing people to the limits of the ability to pay, because once the escrow closes they are pocketing the money and moving on. These weren’t Wall Street fatcats, they were the schmoes in the neighborhood cashing in on the real estate craze.
It was insane, that and the people who were doing this while also borrowing funds out of the homes to pay off their 30k, 60k 100k of credit card and other debt.
This article demonizes hedge funds who bought stuff cheap because too many people bought way more then they could afford. The hedge funds didn’t create the real estate bubble and madness. Yes, dealing with them now sucks and we have yet to see if they are gong to stay permanently in the landlord business or harvest and move on. If they become perma landlords we are one step closer to the weird zaibatsu future of neuromancer. But I think they will start harvesting now as real estate starts peaking again. But really, who is to blame, the scavenger that picks the carcass or the slayers who came in and made bad loans and encouraged poorly educated people to reach way way beyond their means?
The undercurrent herein isn’t bankers are the CAUSE it would be that bankers actions are the EFFECT.
Bankers, financiers, traders, and markets REACT. When your government destroys the value of your currency and reserve banks set interest rates so that one can’t live off savings - people react by desperately seeking yield in financial instruments of questionable provenance. Bankers didn’t cause anything, they reacted to market conditions and government fiats.
I thought it was pretty good. I would modify it with crony capitalism, since letting banksters write the regulations has made them all but immune to the point where instead of being punished for fleecing the economy they get bailed out while every one else takes a bath. Legislators go for cheap these days if you have deep pockets.
True. I see cartels as having the most invested in prohibition. For example the Narcos location scout recently murdered execution style in Mexico. But they’re certainly not the only ones who benefit, and definitely privatized incarceration, police constitutional overreach and politicians using it to signal stubbornness to conservative bases all play integral parts. I agree you can’t solve problems like the drug war or crony capitalism without addressing the tacit and sometimes overt interdependency among those who benefit at the expense of others.
