The government would assert control over the economy. Heath now went to other extremes: he poured money into the economy. He increased government spending and relaxed borrowing. It was called the Dash for Growth: but much of the money went into making a stock market bubble that did nothing to make industry more efficient. Above all, it was invested in the new companies of the takeover men. And Jim Slater’s share price soared to astounding heights. Using the power of his extraordinary share price Jim Slater now became the dominant force in the City of London. He set up his own banking operation and a network of satellite companies each of which set about asset-stripping British industry. He gave thousands of pounds to the Tory Party, while his former partner Peter Walker became a Cabinet minister. Jim Slater was now all powerful. ibid.
The takeover tycoons had finally supplanted the old captains of industry. They had forged a new partnership with politicians. But what few people realised was that their success was based on a facade. They were doing nothing to reconstruct British industry. They were merely profiting from its decline. But drunk on this moment of power they portrayed themselves as the inheritors of the great industrialists of Britain’s past. They also forced the captains of industry to bow down to them. ibid.
But the tycoons’ brief moment of power was about to be destroyed. By 1973 it was clear that Heath’s Dash for Growth had failed. It had created rampant inflation, and when the government tried to hold down wages, it led to violent strikes. ibid.
Edward Heath publicly called him [Rowland] ‘the unacceptable face of capitalism’. ibid.
No-one controlled the market. In 1973 the Arab vs Israeli war broke out. One of the consequences was that the Arabs put up the price of oil by 400%: the effect on the western economies was disastrous. In Britain the stock market was pushed over the edge to a catastrophic crash. It finally made the politicians realise they had no control over the economy. ibid.
The summer of 1976 was one of the hottest on record. Berkeley Square in Mayfair became infested by a plague of caterpillars. They got everywhere even inside the Clermont Club. One of the few Clermont members left in London that summer was James Goldsmith … Goldsmith was suing the satirical magazine Private Eye. Adam Curtis, The Mayfair Set III: Destroy the Technostructure
Goldsmith’s belief that he was powerful was a fantasy. The men who really had the power were the bankers. The men who really had the power were the bankers. They were using Goldsmith’s bullying nature as a weapon to break down the corporations. But the banks themselves were about to fall from grace. And Goldsmith would be left helpless and exposed. ibid.
The New York attorney [Giuliani] revealed that the takeover movement was riddled with corruption … ‘a substantial systemic problem in the financial community was revealed, and revealed in a way that moved us to try to make changes.’ ibid.
Boesky’s arrest came as a shattering blow of James Goldsmith … But the revelations of corruption started by Boesky kept growing. They now spread to Britain. As in America, the Guinness scandal exposed a network of illegal share-dealing, but unlike America, only four men were convicted. Evidence of a much wider system of corruption was quietly buried. ibid.
The summer of 1976 was one of the hottest on record. Berkeley Square in Mayfair became infested by a plague of caterpillars. They got everywhere even inside the Clermont Club. One of the few Clermont members left in London that summer was James Goldsmith … Goldsmith was suing the satirical magazine Private Eye. Adam Curtis, The Mayfair Set III: Destroy the Technostructure
He [Goldsmith] would be used as a battering ram to break down the old system of power that had ruled America for fifty years. The conscious shaping of society by a corporate and political elite would be destroyed by people like him and replaced by the blind force of the markets. ibid.
Ronald Reagan had come to power at a moment of economic crisis. But he promised a dramatic regeneration of the country’s fortunes. But not by government which he blamed had led America into the chaos. His solution was to give power away to Wall Street and to the financial markets. He wanted them to find a way to regenerate America. ibid.
Investors were falling over themselves to invest in junk bonds. But to [Michael] Milken they were more than just a way of raising money. Junk bonds were a powerful weapon with which to challenge the established power of Wall Street. ibid.
The big corporation was at the heart of American life. It was far more than just a way of making money. The idea of the corporation had been born fifty years before out of pressure from politicians. They had wanted to find a way of protecting America from the growing chaos of the free market. ibid.
Goldsmith and Milken now set out to take over the technostructure. They would do it by borrowing billions of dollars with the promise that they would repay vast interest. They were confident they could do this because hidden away within the giant corporations was fantastic wealth which they could unlock and sell off. ibid.
It was the reconstruction of America by the power of the market. ibid.
A patrician elite who had run America for fifty years. ibid.
Downsizing became one of the most important factors fuelling a boom in the American stock market. Every time the raiders sacked managers and workers their share price soared, and in turn that pushed the bull market even higher. As the takeover boom grew, millions of workers were downsized. Whole towns were decimated. ibid.
But Goldsmith was beginning to suffer from delusions of grandeur: he forgot that he was no more than a creature of the banks. And having taken over control of industry from the state, he decided he now had the power and the money to take over foreign policy as well. And the first thing he decided he would do was undermine the Soviet Union. Goldsmith believed that the growing anti-nuclear movement in the West was completely controlled by the Soviet Union; so he and a number of right-wing tycoons set up a private organisation to undermine the peace movement. Goldsmith was going to privatise Western Intelligence. Goldsmith’s main target was the World Peace Council, an innocuous and ineffectual organisation. ibid.
Goldsmith’s belief that he was powerful was a fantasy. The men who really had the power were the bankers. The men who really had the power were the bankers. They were using Goldsmith’s bullying nature as a weapon to break down the corporations. But the banks themselves were about to fall from grace. And Goldsmith would be left helpless and exposed. ibid.
The New York attorney [Giuliani] revealed that the takeover movement was riddled with corruption. ibid.
But the revelations of corruption started by Boesky kept growing. They now spread to Britain. As in America, the Guinness scandal exposed a network of illegal share-dealing, but unlike America, only four men were convicted. Evidence of a much wider system of corruption was quietly buried. ibid.
5,000 miles away in the Mexican jungle … He was Tiny Rowland and he too had been marginalised by the on-rush of the economy. Rowland believed that the Conservative Party had been corrupted by the boom. Both these men [Rowland and Goldsmith] wanted vengeance for their loss of power. And both now set out to destroy the Conservative Party. And they would be joined by a third vengeful tycoon who had been cast aside: Mohamed al-Fayed. Adam Curtis, The Mayfair Set IV: Twilight of the Dogs
Tiny Rowland was doing the same in Africa: he was taking over the old British-owned companies that had once dominated the empire. Rowland used ruthless methods to build a vast industrial empire; this included bribing the new rulers of independent Africa. They were methods that shocked the merchant banks in London. ibid.
The Conservatives’ boom had turned sour. It had led to inflation and industrial violence. And in November the Arab oil price rise pushed the market over the edge. It fell further than in the crash of 1929. The politicians now turned on the tycoons. When Rowland’s corrupt methods were revealed, Edward Heath publicly called him ‘the unacceptable face of capitalism’. And Goldsmith was now seen as a greedy spiv who had torn British industry apart to make himself a fortune. ibid.
The bankers not the politicians would change Britain. ibid.
Rowland knew that he had been stopped because of his corrupt past. He was furious because to him it was the height of hypocrisy. Rowland knew that underneath the new shiny enterprise culture there was a growing mass of corruption, corruption on a far grander scale than anything he had indulged in. ibid.
Fayed paid MPs to defend him in Parliament … The lobbyists found it easy to buy MPs, not just because politicians were greedy but because increasingly they were disillusioned. They knew that power had shifted from parliament to the City of London. ibid.
Currency markets decided to take on the British government. They deliberately set out to force John Major to devalue and to leave the Exchange Rate Mechanism. It was to be a defining battle over who now really controlled Britain’s economy – the markets or the government. ibid.
‘There’s a divorce between the interests of major corporations and of society,’ ibid. James Goldsmith, television interview
1997: The Labour government gave away its power and the markets rewarded them. Money did not flee from London as it had done when previous Labour governments had been elected, and the boom continued. ibid.
What the hell is Gamestop doing? That’s like a $20-stock, it’s at $400. Gimme the phone. Eat the Rich: The Gamestop Saga I: I Like the Stock, trader Cramer, Netflix 2022
What are they determine to do? Change the face of capitalism? ibid.
It’s always fun to see a hedge fund getting screwed, isn’t it? ibid. TV lady
There’s one big catch to shorting. If the price suddenly goes up then hedge funds can take a hit and lose a yacht-load of money. ibid.
Robinhood: Men in Stocks. ibid. Cramer, Mad Money
The believers were out there. ibid.
Roaring Kitty started posting live-streams in the summer of 2020 … ‘Gamestop is by far the most heavily shorted company in the market and that has led to an opportunity.’ ibid. Roaring Kitty
The hedge-fund managers are like the bullies of the playground. ibid. retail investor
The squeeze was on … The short-sellers were sweating bullets. Eat the Rich: The Gamestop Saga II: To the Moon
Gamestop short-sellers had lost $20 billion. ibid.
It felt like a scam, right. ibid. trader
Why did Robinhood have to turn off the Buy button? Eat the Rich: The Gamestop Saga III: The Reckoning
Every different trade that they made enriched a different billionaire. ibid. expert