Talk about planning ahead: A sign at a local garden center this morning advised, “Order your large Christmas trees now.”
In a week or so, as the calendar turns to August, the Christmas mailorder catalogs will start cluttering the mailbox.
Were it not for the sweltering temps and humidity, one would think it December already, what with all the rains we’ve had the last couple of weeks. Daily (sometimes several times daily) downpours have left everything waterlogged. If I don’t soon get a dry day for mowing, my lawn can be baled for hay.
Yet, the weatherpersons say we’re still 17-18 inches deficient in rainfall for the year — this on the heels of an early spring drought, the driest winter in more than 100 years, and a 2006 in which the rain gods were snoozing on the job.
(Given the hoary newspaper adage to never write about weather because it’ll change by the time the paper’s printed, things may again be dry as a bone by the time this hits your mailbox.)
Speaking of Christmas, it’s been Santa all year for mergers and acquisitions. Mega-million-dollar agribiz buyouts continue apace, further imploding an arena that, 25 years ago, was teeming with hundreds of entrepreneurial companies. In the agchem business alone, consolidations and mergers have reduced the major players to only a handful.
But those pale beside deals being brokered by private equity firms and hedge funds, to whom multi-billion-dollar deals seem routine.
The private equity Blackstone Group recently tendered an offer for the Hilton Hotels chain that will run $26 billion or so.
Kohlberg Kravis Roberts (KKR), the granddaddy of buyout firms (their hostile takeover of RJR Nabisco in 1989 for $31 billion set the financial world abuzz), has snapped up everything from mattress maker Sealy Corp. to the recent $7.3 billion acquisition of the Dollar General chain.
KKR also founded the media conglomerate, Primedia, which at one time owned Farm Press. It is reported to have invested in 150 deals with an aggregate value of $279 billion; its companies have over $100 billion in annual revenues and more than half a million employees.
And in a how-much-is-enough scenario, both KKR and Blackstone are now planning billions in initial public stock offerings.
Where do the private equity and hedge fund moguls get all their billions for these monster deals?
Well, part of it comes from you, John Taxpayer, thanks to eminently favorable tax provisions that allow them to pay at a 15 percent capital gains rate on much of their partnership income, versus an ordinary income rate as much as 35 percent. What a sweet deal.
An effort is afoot in Congress to change the tax rate on certain partnerships that go public, making them subject to the ordinary income rate.
Many in Congress see this as a way to offset the increasingly onerous burden of the alternative minimum tax now confronting many middle income taxpayers. A fierce lobbying campaign is under way by the buyout titans to try and scuttle the tax changes.
But, Christmas for them could well include a few lumps of coal.
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