In the wake of megastorm Sandy, Bain Capital, which was co-founded by Mitt Romney and where he served as CEO until he resigned in 1999 but didn't actually resign until 2002 when he really meant it, is planning to make a leveraged buyout of the entire Northeast. It would be the biggest buyout yet on the part of the alternative asset management firm which already owns controlling interests in Clear Channel Communications and the Staples chain of discount office supply stores.
"Almost all the assets of the region are underwater, which means they are greatly undervalued right now," says Bain spokesperson, Noah Klein, who argues that part of the undervaluation can be blamed on the "Obama economy."
"We also understand that many people there have already been laid off -- permanently -- with more to come," he says. "It's a Bain-ful kind of opportunity!"
Another reason why Bain is interested in buying out the Northeast, he explains, is that, should Bain be unable to bring the Northeast back to profitability by slashing costs and though massive personnel cuts, "It'll be easy to ship everything overseas -- a lot of it's on its way there already."
Though Bain's proposal is without precedent in the world of financing, Klein points to the wake of Hurricane Katrina as an example of how bad weather can open up good business opportunities.
"Just look at how Katrina cleared out the outmoded facilities and overstaffed neighborhoods of the Lower Ninth Ward," he says. "Imagine how much it would have cost a private firm to cull the portfolio of that part of the city in preparation for resale? It's a real example of what you can accomplish if you just get government regulations out of the way and let the free market take its natural course."
Asked on the campaign trail whether he agreed with the timing of Bain's announcement, Mitt Romney replied, "Remember folks -- hurricanes are people, too. That's why we give them names!"
Posted: Wedensday, 31 October 2012