From: Tim May <tcmay@got.net>
Date: Sun, 27 Sep 1998 21:59:24 +0800
To: cypherpunks@Algebra.COM
Subject: Meriweather v. Gates
Message-ID: <v03130300b234a90194f5@[209.66.100.49]>
MIME-Version: 1.0
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It's an ironic indication of where we are that Bill Gates is being hounded
by the Justice Department, Sun Microsystems, Netscape, Novell, and Ralph
Nader while no one is hounding John Meriweather. In fact, the Federal
Reserve System, nominally nongovernmental (wink wink) just helped to bailed
out his firm, Long-Term Capital Management.

Gates, you see, has a non-leveraged investment of $50 billion in Microsoft.
No borrowing, no margin debt, just plain old-fashioned ownership.

Meriweather, on the other hand, started in 1991 and took in money from
speculators. He took the $2.2 billion and borrowed with it, hitting the
$125 B in borrowed assets point. Then he and his rocket scientists
essentially borrowed still more, using this $125 B to leverage $1.25 T. (T
for "trillion.")

Not  bad, going from $2.2 B to $1.25 T, a mere 500-fold increase.

(Like taking the money one planned to spend on a new PC, a couple of
thousand or so, and instead controlling a million dollars worth of
financial instruments.)

Had the folks at LTCM made the right bet on the roulette wheel, by guessing
the direction of interest rates, the tens of billions of profits would have
been theirs to keep, with little work on their part. (Some of the
principals are now disclaiming responsibility, saying LTCM was only a
sideline interest.)

Ah, but they guessed wrong, and now they and their lenders are being
bailed out. In America, profits are private but losses are public.

Meanwhile, Gates sticks to building up his company, selling actual
products.  No margin debt, no loans for the American taxpayer to cover, no
overextended lines of credit. Oh, the horror of it!

Gates must be attacked by the U.S. government and all of his incompetent
competitors! He must be driven out of business! We need to  make the world
safer for folks like Meriweather.

(Think of what Meriweather could be doing with the $50 B that Gates has!
Instead of being worth a piddling $50 billion, Meriweather and Scholes and
that bunch could double down, double down again, and again, and turn it
into $25 trillion! All with just some computer commands. American
capitalism at its best.)

We bail out Meriweather. We try to bust Gates. I'm going to  be sick.

The reformatting of this country is overdue.

--Tim May


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---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   831-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Licensed Ontologist         | black markets, collapse of governments.