When the British historian E. J. Hobsbawm died on October 1, 2012, at the age of 95, the “respectable” media on both sides of the Atlantic joined in a chorus of hosannas to his memory. The BBC broadcast an hour-long retrospective. TheGuardian ran thousands of words about him, including an exhaustive obituary by Martin Kettle and Dorothy Wedderburn, whose first few sentences made him sounds like something just short of a god:
Had Eric Hobsbawm died 25 years ago, the obituaries would have described him as Britain’s most distinguished Marxist historian and would have left it more or less there. Yet by the time of his death…he had achieved a unique position in the country’s intellectual life…he became arguably Britain’s most respected historian of any kind….Both in his knowledge of historic detail and in his extraordinary powers of synthesis…he was unrivalled.
No less fulsome was Hobsbawm’s New York Times obituary, by William Grimes, which overflowed with words like “masterwork,” “incisive,” “eloquent.” Nick Higham’s piece for the BBC website was equally fawning.
And the New Yorker ran a cozy tribute by historian Stephen Kotkin, who, calling Hobsbawm “refreshingly serious—intellectually curious and politically engaged—yet un-full of himself,” proceeded to celebrate Hobsbawm’s books, which “put considerable empirical flesh on the classical Marxist bones,” and closed with the admiring observation that “having embraced and never relinquished the passionate early Marx, E. J. Hobsbawm…was in it to change the world.” Hobsbawm, Kotkin concluded, had “long ago become probably the world’s best known living historian, with books translated into some forty languages.”
As those last few sentences suggest, to be sure, there was one ticklish little fact about Hobsbawm: he was a lifelong Stalinist. Most of those who extolled him in the “respectable” media did acknowledge this detail, but they all found curious ways to, shall we say, diminish its importance.
While admitting, for example, that critics saw Hobsbawm as “an apologist for Soviet tyranny,” Higham was quick to add that the late, great Kremlin toady “was too shrewd, too open-minded to pursue a narrow Marxist approach in his work or his politics.” The Guardian obit proffered a strikingly similar “yes, but” formulation on Hobsbawm’s Communism: “Hobsbawm was never to leave the Communist party and always thought of himself as part of an international communist movement….Yet he always remained very much a licensed free-thinker within the party’s ranks.”
Higham, indeed, referred neutrally and without irony to Hobsbawm’s “Marxist ideals” (can one imagine a writer for the BBC ever citing in this way someone’s “Nazi ideals”?) and quoted then Labour Party leader Ed Miliband’s praise for Hobsbawm as “an extraordinary historian, a man passionate about his politics and a great friend of his family” and as a man who “cared deeply about the political direction of the country.” Kettle and Wedderburn, for their part, even saw Hobsbowm as a victim – a man whose university career was hampered by “a very British academic McCarthyism” (read: a disinclination to allow a Stalinist to indoctrinate students).
This week we’ve been examining various aspects of CNN’s stoogery – among them its appeasement of dictators in order to maintain access to their countries and its reluctance to call Islamic jihad by its own name. Not unrelated to its delicate concern for Islamic sensibilities is another attribute – namely, its systematic anti-Israel bias.
In August 2014, during that year’s Gaza War, protesters outside CNN’s studios in New York condemned the network’s anti-Israeli slant – and that of many other news operations. Jeremy Dery, a former parliamentary assistant in the Knesset, complained that thanks to the media, the world “believes that Israel targets innocent people.” Journalist Stephen Tebid, who held a poster reading CNN = Crap Not News, charged that coverage of the war didn’t include a single “picture of Hamas shooting a rocket.” That July, Ron Dermer, Israel’s ambassador to the U.S., chastized CNN, which had shown pictures of children killed in an Israeli strike on a U.N. school but had omitted to mention that Hamas was hiding rockets in those schools – as well as in hospitals and mosques.
In the same month, comedian Joan Rivers – in an impromptu airport interview with the celebrity news website TMZ that went viral immediately – censured CNN and the BBC for their hand-wringing over “civilian deaths” when, in fact, many of the “civilians” in question were actively helping terrorists and storing weapons in their homes. “The BBC should be ashamed of themselves,” she insisted. “And CNN should be ashamed of themselves!” But far from exhibiting any shame, CNN later ran a report on follow-up remarks by Rivers in which it seriously misrepresented her position – the obvious goal being to make her look bad.
Like many other news media, CNN frequently reports on terrorist attacks in such a way as to suggest that they were ethically neutral military or civilian conflicts. In November 2014, for instance, two Palestinians were killed committing a terrorist assault on a Jerusalem synagogue that claimed the lives of four Israelis. CNN’s headline read: “4 Israelis, 2 Palestinians dead in Jerusalem.” To compound the outrage, CNN described the atrocity as an “attack on Jerusalem mosque” – allowing viewers to assume that perhaps a gaggle of violent Jews had preyed on a congregation full of innocent praying Muslims. (Le Monde‘s headline about the same incident read “Six killed in Jerusalem.”) CNN later apologized for misrepresenting the facts – but somehow it keeps on doing exactly the same kind of thing.
CNN has also routinely passed along fairy tales served up as fact by various pro-Palestinian propaganda outfits or by the official – and famously unreliable – Palestinian Authority “news” agency. A particularly absurd example: in June of last year, CNN ran a story by Don Melvin under the headline “Israeli settlers reportedly chop down 800 Palestinian olive trees.” There was no truth whatsoever to the account – but instead of withdrawing and apologizing for it, Melvin followed up by (believe it or not) pretending that he’d written it on the assumption that readers would realize that the report in question was unreliable.
Some CNN talking heads, when confronted with Islamic terrorism, instantly head in the opposite direction from moral clarity, rushing to speak up for Islam while at the same time making absolutely no sense. After the Charlie Hebdo massacre in Paris in January of last year, for example, CNN anchor Jim Clancy tweeted as follows about the satirical magazine’s Muhammed cartoons: “The cartoons NEVER mocked the Prophet. They mocked how the COWARDS tried to distort his word. Pay attention.” What?
This was only the first of a series of tweets – described as “bizarre” by Israel National News – in which Clancy managed to change the subject from Islamic terrorism to alleged Israeli perfidy. The good news is that Clancy left CNN shortly thereafter; the bad news is that Clancy, by that point, had spent 34 years spreading disinformation at the network.
Every now and then, the truth about CNN gets out…on CNN itself. In August 2014, a reporter for the network asked Ben Shapiro of the Truth Revolt website: “Has Israel somehow lost more in the eyes of the world than Hamas has?” Shapiro said yes, explaining that while “Hamas is a terrorist group…Israel, thanks to outlets like CNN, has been turned into the villain….If Hamas could have come up with any sort of outlet that could have created more will to kill more Jewish babies and Palestinian babies, CNN would have been it.” Shapiro faulted CNN for failing to inform audiences of the “restrictions that Hamas puts on your reporting inside the Gaza Strip,” of Hamas’s use of children as human shields, and of the Hamas charter’s commitment to the destruction of Israel and the murder of Jews worldwide.
He’s been called “the most damaging British traitor of the Cold War,” “the spy who got away.” His name is George Blake, and he’s 93 years old. Today he’s a doddering, harmless-looking old coot living in Russia. Half a century ago, however, he was a very slick character indeed who, to quote an interviewee in a recent BBC documentary, was “responsible for getting people killed.”
The documentary, entitled George Blake: Masterspy of Moscow, aired on the BBC last year. Made by filmmaker George Carey (not to be confused with the former Archbishop of Canterbury of the same name), it recounted Blake’s exceedingly curious and colorful early years: born in Rotterdam in 1922 with the last name of Behar, he grew up in the odd position of being unable to communicate with his own father, an Egyptian Jew, hard-working businessman, and British subject who, though he lived in the same house as his son, spoke English and French but not Dutch, which at the time was the only language the son spoke.
After the father died, in 1936, leaving the family in financial difficulties, it somehow came to the attention of his widow and children that he had a rich sister in Cairo who lived in a palace, no less. George, then in his early teens, came into contact with his aunt and presently relocated to Cairo, where he moved into the palace, enrolled at the English School, and learned both French and English. (One presumes he must have picked up at least some Arabic, although there is no mention of this in the documentary.)
He was visiting his family in The Hague when World War II broke out, and a year later was in Rotterdam for the Nazi air raids of May 14, 1940. Returning to The Hague to discover that his mother and sisters had fled for Britain, George joined the Dutch Resistance, found his way (a rather spectacular feat) to the U.K. via Spain in 1942, and, after arriving in London, managed to parlay his remarkable personal story into a job with the Secret Intelligence Service (SIS), better known as MI6, which sent him to Cambridge to learn Russian.
It was there, in a class taught by a professor who inspired in him “a romantic admiration for everything Russian,” that Blake, according to the documentary, first began to sympathize with Communism. (Blake himself has testified otherwise: when he’d first moved to Cairo, he’d met one of his cousins, Henri Courel, a Communist whose views, he said years later, “had a great influence on me.”)
Sent to Seoul by MI6 in 1948, Blake was apprehended by the Communists after the Korean War broke out. They could’ve executed him, but instead he allowed himself to be turned – to accept the role of a double agent, spying on the British for the North Koreans’ Soviet masters. By this point, he was not a tough sell: “I felt I was on the wrong side…that it would be better for humanity if the Communist system prevailed, that it would put an end to war.” Indeed, Blake, who had once aspired to be a pastor, would later say that he “viewed Communism as an attempt to create the kingdom of God in this world.”
Six counts of indecent assault, four counts of rape, two counts of bodily harm, one count of cruelty to a child under 16. These, as we saw yesterday, were the charges of which a Maoist cult leader by the name of Aravindan Balakrishnan was convicted in December in a London court.
The child in question was Katy Morgan-Davies, who was born in 1983 and who, during her childhood and youth, was beaten regularly and prohibited from attending school or making friends. Her mother was a member of Balakrishnan’s commune, the Mao Zedong Memorial Centre, who died under suspicious circumstances in 1997. After Katy’s liberation from the commune, she told a BBC reporter that her father had “wanted the whole world to be like the collective where he is in charge and everybody is his slave.” Indeed, she said he “was using the sect as a ‘pilot unit’ to learn how to control people before taking over the world” – which made her think: “God, if the whole world is going to be like this, what way out is there? How am I going to live? I cannot live in this. So I used to think that the best way would be to die.”
Katy had actually escaped once – way back in 2005 – only to be returned to her father by the police. In 2013, it was the police who saved her, plucking her out of her father’s homemade hell at a time when she suffering from diabetes and desperately in need of medical treatment. At Balakrishnan’s trial, Katy described the commune as the headquarters of a “hate cult” that “was full of violence and horror.” Calling her father a “narcissist and a psychopath,” she said: “The people he looked up to were people like Stalin, Mao and Pol Pot and Saddam Hussein – you couldn’t criticise them….They were his gods and his heroes. These were the sort of people he wanted to emulate.” She said she’d “felt like a caged bird with clipped wings” and had finally left the house because she “didn’t want to live like an animal anymore.”
One detective said that Katy had been so profoundly indoctrinated that when she finally was freed from the house, she “genuinely believed…she was going to explode – that her life would come to an end.”
In late January, Balakrishnan was finally sentenced to 23 years in prison by Judge Deborah Taylor, who told him in open court that he’d been “ruthless” in his “exploitation” of his followers, that he’d “engendered a climate of fear, jealousy and competition for [his] approval,” that he’d treated his daughter like “an experiment,” subjecting her to “a catalogue of mental and physical abuse,” and that these were “grave and serious crimes conducted over a long period of time” for which he had “shown no remorse whatsoever.”
Ideologically, of course, what Balakrishnan preached was hardly orthodox Maoism. But in his intellectual tyranny, and his employment of physical abuse and psychological terror to enforce his power, he was a Maoist through and through – a man expertly schooled in the ways of totalitarianism. And the fact that this bullying mediocrity was able to draw so many followers only reflects the perennial power of utopian ideology to attract the gullible and psychologically needy.
In December, a court in London convicted a man named Aravindan Balakrishnan of six counts of indecent assault, four counts of rape, two counts of bodily harm, and one count of cruelty to a child under 16. The child was his daughter, Katy Morgan-Davies, formerly known as Rosie Davies, who by the time of Balakrishnan’s conviction was over thirty years old. Until being rescued by police in 2013, she had spent her entire life as part of a cult of brainwashed, browbeaten men and women in a commune in Brixton, south London.
A Maoist commune.
Balakrishnan was originally from Singapore. He came to London in 1963 and was converted to left-wing extremism at the London School of Economics. (Not a surprising scenario, by the way.) In 1970, he founded a Maoist group called the Workers Institute Marxism Leninism Mao Zedong Thought – Brixton Institute for short – which, headquarted in a squat, ran a bookstore and a “meeting place.” While active in the Communist Party of England (Marxist-Leninist), he began to establish his own group of followers within the Party, whom he persuaded to obey his command and subscribe to his version of Maoist dogma – including his conviction that Britain would soon be “liberated” by Chinese Communists.
So disruptive was he of the English Communist Party’s order and canons that in 1974 the Party’s Central Committee issued a statement saying that “after 7 years of struggle to unite together in order to strengthen the proletarian revolutionary movement,” it was suspending “Balakrishnan and his clique” from Party membership, because Balakrishnan had “tried to conspire to build a clique of people around ‘his line’ and establish his centre whilst still claiming to be in the Party, continuously saying one thing to the Party comrades and preaching and practising another to younger comrades and comrades under his ‘discipline.’”
Balakrishnan established the commune, whose official name was the Mao Zedong Memorial Centre, on the very day, September 9, 1976, when his “beloved Chairman Mao passed away.” The institute was shuttered (or went underground) after a police raid and mass arrests in 1978 –following which both Balakrishnan and his wife served prison sentences for assaulting an officer – but the commune lived on. Residing there with the Balakrishnans were several of his adherents, most of them women and many of them foreign students who “refused to recognise the legitimacy of the state and maintained a hostile attitude towards the establishment and towards the rest of the far-left in Britain at that time.”
Balakrishnan – who taught his disciples that Mao was a god and convinced them that he himself was one, too –allowed them to read only a small selection of leftist works, encouraged them to spy on one another, beat them, sexually assaulted them, and claimed to wield an invisible spiritual force named “Jackie” through which he could read their minds. Reportedly, he even “convinced his followers that he controlled the sun, moon and wind” and that any disobedience on their part would give rise to natural disasters. His goal, according to testimony given at his trial by a former cult member, was to create “a cadre of women soldiers who could withstand the sugar-coated bullets of bourgeois culture.” Some of his women eventually became disenchanted and left the commune; others who wanted to leave were actively prevented from doing so.
We’ve already written here about the head of Britain’s Labour Party, Jeremy Corbyn, who’s a fan of Hugo Chávez’s disastrous socialist “revolution” in Venezuela, and about the party’s recently appointed spokesman, Seumas Milne, who (to put it mildly) has a soft spot for Stalin.
Well, here’s another high-profile Labourite for whom the label of useful stooge is manifestly appropriate: Diane Abbott, an MP since 1987 and currently Shadow Secretary of State for International Development. Abbott was Britain’s first black female MP, and has long been notorious for her incendiary comments about race. In 1988, for example, she told an audience in the U.S. that “the British invented racism.” And eight years later, she complainedthat a hospital in her “multicultural” district had hired nursing trainees from Finland. Why? Because, she said, the “blonde, blue-eyed” Finns had probably “never have met a black person before, let alone touched one,” and were therefore incapable of handling black patients. “The hospital,” she maintained, “should have taken on Caribbean staff – they know the language, British culture and institutions.”
Abbott’s remarks outraged one of her Tory colleagues, Ian Bruce, who said: “I have never heard such racist rubbish from an MP in recent years….Most Finnish girls are dark-haired,” he noted, and all of the Nordic nations “have people from African and Caribbean countries living there.” The Royal College of Nursing reacted too, issuing a statement to the effect that Abbott’s comments seemed intended to “set nurse against nurse.” The story even made the news in Finland, where Katri Luukka, head of a nursing school in Helsinki, called Abbott’s statement “[r]eally thick, even for an MP.” The Spectator pointed out that some nursing trainees from Finland were, in fact, black, and that the then-reigning Miss Finland was also black.
Did Abbott learn from that misstep? Nope. On a BBC TV program in 2010, she said that “West Indian mums will go to the wall for their children” – in response to which the host, Andrew Neil, asked: “So black mums love their kids more than white mums, do they?” The next year, in another TV appearance, she called David Cameron and Nick Clegg, the then leaders of the Conservative and Liberal Democratic parties respectively, “two posh white boys.” And the year after that, she stated in a tweet that whites “love playing ‘divide and rule.’ We should not play their game.”
After that tweet, there were calls for her to resign. Iraqi-born Tory MP Nadhim Zahawi said, “If this was reversed, I guarantee a white politician would have to resign their frontbench post or be sacked.” But Abbott, in a live TV interview with Sky News (see the first video below), held firm, insisting that the problem was not with her views but with people who’d interpreted her words “maliciously.” Her tough stand didn’t last for long, however. During the Sky News interview, her cell phone rang. The caller was Ed Miliband, who at the time was the Labour Party leader. While the TV cameras continued to roll, he gave Abbott “a severe dressing down,” ordering her “to apologise unreservedly” for her tweet. She obeyed – kind of. “I understand people have interpreted my comments as making generalisations about white people,” she said in a statement released after the interview. “I do not believe in doing that. I apologise for any offence caused.”
But none of these foolish remarks was quite as disgraceful as a claim that Abbott made on a TV chat show (see video below) back in 2008 – and that the Spectator reminded us of in a recent item. Michael Portillo, sitting beside her on the show, observed that Prince Harry had been widely criticized for wearing an SS uniform to a party – but “had he worn a Mao outfit, nobody would have blinked.” When host Andrew Neil asked why this was the case, Abbott chimed in: “I suppose that some people would judge that on balance Mao did more good than wrong. We can’t say that about the Nazis.”
Exactly what good did Mao do, in Abbott’s view, that would outweigh his murder of tens of millions of people? Abbott’s answer: “He led his country from feudalism, he helped to defeat the Japanese, and he left his country on the verge of the great economic success they are having now.”
Well, let’s break that down. On her first point: yes, Mao led the Chinese from feudalism…to totalitarianism. On her second point: no, Mao didn’t help defeat the Japanese; Chiang Kai-shek and the Kuomintang did. Third, while Taiwan, under the Nationalist Chinese, was becoming a developed nation, the Chinese economy under Mao remained undeveloped. Even now, four decades after Mao’s death, when China is considered an economic powerhouse, its per capital GDP, at around $7,000, is still only a fraction of Taiwan’s, at $32,000. In short, Mao didn’t pave the way for his country’s economic success – his imposition of brutal totalitarian rule prevented his people from attaining Western-style prosperity.
Of course, even if Abbott’s assertions about Mao’s supposed accomplishments were absolutely true, her belief that they somehow outweighed or legitimized or made up for his annihilation of tens of millions of his own people is reprehensible, and should have resulted in her immediate forced resignation from Parliament. But no: she’s still there, and seems to have no plans to leave anytime soon.
Another month, another new low for Kyle Bass, the favorite hedge-funder of Argentine autocrats.
First, a quick recap. Bass, who founded his Dallas-based fund, Hayman Capital Management, in 2006, made his fortune – and international headlines – by correctly predicting the 2008 subprime mortgage crisis. For a while there, he was a superstar. He was M. Night Shayamalan in 2001, coming out of nowhere to get nominated for both his script and direction of The Sixth Sense. Observers jumped to the conclusion that Bass was some kind of genius who could do no wrong.
But time went on.
And time has not been kind to Kyle Bass.
The magic touch – if he ever had it – is long gone. Just as Shayamalan has made bad movie after bad movie, Bass has made bad call after bad call.
And he’s done it in full view of the market-following public. The guy seems never to turn down an invitation to go on TV and pontificate – proffering so-called “analysis” that invariably serves his own bottom line.
In addition to making bad calls, he’s made unsavory alliances. While pretty much everyone else in the business thinks that the economically illiterate Argentinian despot Cristina Fernández de Kirchner is the worst thing that ever happened to her country’s economy, Bass can’t stop singing the woman’s praises. Last year, her country defaulted on its sovereign debt for the second time in thirteen years – an action at once indefensible and irrational. But, as we’ve seen, Bass defended it and rationalized it anyway, sounding so outrageously out of touch with reality that, as the New York Post put it, he sounded more like Argentina’s leftist economy minister Axel Kicillof than a U.S. hedge-fund manager.
If Bass came off like one of the hyper-socialist Kirchner’s lackeys and minions, that should be no surprise – because he is one of her lackeys and minions. The BBC has said he has a good relationship with her. That’s putting it mildly: Bass has consistently championed her preposterously irresponsible economic policies and has delicately ignored the cartoonish degree to which she and her breathtakingly amoral cronies have ripped off their own people.
And he’s gone even further than that: when New York Judge Thomas Griesa ruled that Argentina couldn’t just shell out to creditors who’d agreed to settle for reduced amounts, but also had to pay creditors – including Paul Singer of Elliott Management – who insisted on full payment, Bass took Kirchner’s side, calling Singer & co. “immoral” for, as he put it, “holding poor countries as hostages” and “holding up 42 million people from progress.” As we’ve said before, what’s really holding up progress in Argentina are Kirchner and her staggeringly incompetent and corrupt flunkies, whose economic illiteracy and limitless avarice have sent poverty levels sky high in a once affluent nation.
The question is: why? Why is Bass such a Buenos Aires bootlicker? Why is his nose a bright salmon pink from rubbing it up against the walls of the Casa Rosada? What kinds of secret, unscrupulous deals does he have – or want to have – with the you-scratch-my-back-I’ll-scratch-yours Kirchner dynasty?
Bass’s shady ties with Kirchner and her crew aren’t his only ethical lapse since his fifteen minutes of glory. This is, for example, the guy who, in order to make good on his investment in General Motors, went on TV to try to shift the blame for fatalities caused by non-deploying airbags and faulty power steering in GM cars – problems that the auto giant knew about and failed to act on – onto the dead victims themselves, charging (disgustingly) that they’d either been drunk or failed to wear seatbelts.
Then there’s his business ties to the late Chris (American Sniper) Kyle, whose widow, Taya, is now embroiled in a messy lawsuit with one of Bass’s subordinates at Hayman, whom she’s accused of all kinds of unethical behavior. (Imagine!)
And this is also, note well, the guy who, as we’ve reported, came up a year or so ago with a ploy so vile that both houses of Congress are now working overtime – on a bipartisan basis – to close up the loophole that makes it possible.
The scheme is as simple as it is loathsome: Bass – in collusion with one Erich Spangenberg, known as “the world’s most notorious patent troll” – picks out certain pharmaceutical firms, short-sells their stocks, then challenges one or more of their patents via a front organization, the Coalition for Affordable Drugs, that he set up precisely for this purpose. The inevitable result: the stocks go down, Bass rakes in a few million quick simoleons, and the pharma companies’ prices go up while their motive to fund medical research goes down – thus causing palpable harm to the millions of people who depend on those firms’ products to ameliorate their suffering, relieve their symptoms, or prolong (or even save) their lives.
But why care about the sick and infirm when you’re in a position to turn a buck?
When Bass first got called on this sleazy dodge, he insisted he was doing it for a noble reason: bust patents and competition will drive drug prices down. On close examination, his explanation didn’t really make sense – and it didn’t fool anybody. “There’s nothing in this man’s history,” pointed out James C. Greenwood, a pharma industry leader, “to suggest he has any interest in lowering health-care costs.” Scott McKeown, an intellectual-property expert, dismissed Bass’s claim that he’s actually trying to help patients. Bass, he said, was “simply hoping to spook financial markets to his benefit.” Nobody disagrees.
So transparent was his pretense of altruism, in fact, that Bass has dropped it and switched to another defense. In a response to a filing against him by Celgene, the pharma firm that’s been his biggest target, Bass acknowledged he was motivated by a lust for profit – but quickly added that pharmaceutical companies, too, are driven by financial self-interest. So what, he asked, is the difference?
Well, some people do see a difference, and they’re out to stop him. As we’ve noted, a government agency, the Patent Trial and Appeals Board (PTAB), is considering sanctioning Bass for abusing the system with his patent challenges. Also – get this – Celgene has charged Bass and Spangenberg with extortion. Spangenberg, apparently, sent Celgene drafts of patent-challenging petitions, saying, accordingto Bloomberg News, that “he’d file them unless given cash.”
Some observers might wonder why Bass, who for fifteen minutes there was the Wunderkind of the hedge-fund industry, would be engaged in such grubby hijinks. Why would a guy who’s flown so high and cashed in so handsomely sink so low in order to further line his already well-stuffed pockets? An August 13 article in Barron’s helps clear up that question. We already knew that Bass had lost his fabled magic touch. But it turns out things are even worse than we imagined.
Jim McTague tells the story: “Bass has had a dismal time of it recently….Suddenly, the former luminary can’t seem to get anything right.” While it’s hard “to know exactly how Bass’ funds are doing because he keeps his fund’s actual performance metrics close to the vest,” news reports say he “lost somewhere around 30% in 2014, the mirror opposite of the industry’s best-performing hedge fund managers.”
Thirty percent! No further questions, Your Honor.
McTague quotes a recent article in which Bass himself admitted to having had “a tough year.” “It’s nice to win all of the time,” Bass said. “When you are not winning and everyone else is, it makes life difficult.”
No wonder he’s pulling this chintzy pharma con and sucking up to Cristina Fernández de Kirchner, that despotic queen of the pampas!
According to McTague, Bass’s two current preoccupations are oil (everyone else to the contrary, he’s counting on prices to rise within a year) and Argentina (where, in McTague’s words, Bass continues to be “bullish where others are heading for the exits”).
Bass, reports McTague, refuses to talk about his and Spangenberg’s tacky patent ruse. Meanwhile, the latest news from Capitol Hill is that bills triggered by Bass’s activities have easily cleared both the House and Senate Judiciary Committees, with legislators hoping that by the end of this month a law will be on the books that “cut[s] the legs from under this particular Bass strategy.”
Once that happens, what’s on deck for Bass? What squalid swamp will he wade into next? What sordid small-time con will he cook up? We don’t hold his stock-picking powers in particularly high regard – not anymore, at least – but we’re bubbling over with confidence that this shameless bottom-feeder has a cornucopia of uniquely unethical make-a-buck stratagems left in him.
And, of course, if all else fails, he’ll always have Buenos Aires.
UPDATE, August 27: Only hours after this post went up, the Patent Trial and Appeal Board denied Bass’s first two patent challenges. The PTAB’s decision “sets a worrying precedent for Bass,” wrote Business Insider, which also noted this very illuminating response by Bass: “It should be axiomatic that people do not undertake socially valuable activity for free.” In Bass’s world, it’s all about the money.
We’ve been looking at some of Venezuela’s more prominent chavista creeps. But no account of useful stooges in that poor put-upon country would be complete without a mention of the so-called “Bolivarian Circles.” In 2001, the year they were founded, The Washington Post ran a puff piece about them by one Scott Wilson, who was not alone in describing them as part of a benign, civic-minded movement by ordinary people across the country to help one another. This, after all, was the official story about the Circles. Wilson just fell for it. He began his piece as follows: “They do not look like revolutionaries, the mothers and grandmothers, waitresses and street sweepers huddled around a sewing machine, making gingham slippers and cloth baskets for Christmas sweets.”
To be sure, Wilson acknowledged that for some anti-Chávez Venezuelans, the Circles brought to mind “Cuban-style revolutionary defense committees, designed to ensure fealty to the president’s populist agenda.” Yet Wilson, in his account of what he represented as a typical Circle meeting room, insisted that “aside from the poster of guerrilla leader Che Guevara on the wall, ideology rarely enters this room of swinging light bulbs, plastic furniture and scraps of colored cloth strewn on the cement floor.” Wilson even quoted a Venezuelan political science professor as saying that “[t]he idea that these circles could multiply and serve as centers of indoctrination and organization of a vast mass movement didn’t get off the ground.”
One wonders whether that professor was seriously misguided or was in fact a part of the chavista PR machine. For the fact is that even then, despite Wilson’s depiction of the Circles as essentially apolitical, Circle members were taking an oath to “completely dedicate [their] work to the Bolivarian ideology, to the popular organization, to popular mobilization, to popular power, to never abandon the struggle” and to “fight without rest for the defense of the revolution, even if I have to sacrifice my life, for the glory of Venezuela.” Let’s face it: it’s not exactly the kind of oath taken by members of your great-grandmother’s quilting bee.
Anyway, that was just the beginning. By 2004, the BBC was reporting that the Bolivarian Circles, which by then had grown into a network of about 70,000 local groups, amounted in fact to an “underground armed militia” whose critics called it the “Circles of Terror.” Tomorrow we’ll get into the details, and meet one of the most prominent members of those terrorist circles.
The tweet came on June 5. “Former Iraqi Foreign Minister Tariq Aziz has died in jail: Nice guy in a nasty situation – made no better by Bush/Blair’s Shock and Awe.” The author of the tweet: Jon Snow. He elaborated in another tweet. “I spent time with Tariq Aziz, interviewed him often..Christian that he was – they didn’t kill him, they just let him rot to death in jail.”
Who’s Jon Snow? Now 67 years old, he’s a familiar face in Britain, where he’s been a news anchor for decades, previously on Channel 4, now on ITN. And who, for those who may have forgotten, was Tariq Aziz? Yes, he was the foreign minister for Saddam Hussein, one of the most monstrous dictators of modern times. But Aziz was more than that. For one thing, he was a very close friend and trusted confidant of Saddam’s; thanks, moreover, to his many appearances on CNN, the BBC, and other international news media, he was probably, for people in the English-speaking world, the most prominent apologist for Saddam’s tyranny. As one BBC presenter put it after his death, he was “the international face of Saddam Hussein’s regime.”
It will be remembered that many of the Western journalists and diplomats who interacted with Aziz found him personally charming. This was not unusual. Joachim von Ribbentrop, Hitler’s Foreign Minister, was charming, too. So was Maxim Litvinov, Stalin’s prewar Foreign Minister. (Molotov, his successor, was notoriously charmless.) Journalists and diplomats interacting with such persons need to be on guard against being taken in by their charm. Snow appears oblivious to this fact.
Snow’s tweets about Aziz drew criticism, much of it from other journalists. But he stood by his sentiments. “I can only say I interviewed him and got to know him quite well,” he toldThe Independent. “I think he was made the fall guy by the West. It’s a long time ago. He’s been in prison for a long time. There were plenty of people who needed to go to prison in that regime. He was one of the only ones who were picked off.” Apropos of the Iraq invasion and its aftermath, he added: “It’s an absolute tragic morass in which everybody has behave[d] badly. What was the idea of going in and smashing that place? It meant Christians couldn’t stay. It meant Jews couldn’t stay. He was picked off because he was a Christian. It’s all tricky stuff – so complicated.”
One might prefer simply to back away from that mishmash of inane remarks, but given Snow’s prominence and influence, it is perhaps salutary to pause for a moment and notice what Snow is doing in his tweets and his follow-up comments. For one thing, he’s not denying Aziz’s involvement in Saddam’s unspeakable atrocities; he’s simply taking the view that since Aziz was only one of many vile creatures whose hands were soaked with the blood of tortured women and children, why jail him when others were allowed to walk away? For another, the reference to Saddam’s nightmare society of torture chambers and mass graves as a “nasty situation” is a world-class understatement. And by describing the situation in Iraq as a “tricky” and “complicated” one in which “everybody has behave[d] badly,” and by focusing on the purported offenses of “the West,” which in his description went in and “smash[ed]” Iraq and made Iraq’s predicament “no better,” Snow is playing moral-equivalency games of the lowest order.
Michael Lewis, the financial writer, has said that when he first met Kyle Bass, “I had an experience I’ve often had while listening to people who seem perfectly certain about uncertain events….One part of me was swept away by his argument….The other part suspected he might be nuts.”
Lewis isn’t the only financial insider who’s had a mixed reaction to Kyle Bass. The Dallas hedge-fund manager has, it must be acknowledged, won his share of praise. Once upon a time, indeed, he was considered something of an instant legend. Only two years after launching his own hedge fund in 2006, he struck it rich as a result of having predicted the subprime mortgage crisis.
For fifteen minutes, he was the hottest guy in the game.
Since then, however, things haven’t gone very smoothly for Kyle Bass. Far from it. In recent years – not to put too fine a point on it – his fund, Hayman Capital Management, has often performed disastrously. It’s had its ups, but some of its downs have been headline-making. In April 2012 alone, it lost 29% of its value. During the first quarter of 2014, it dropped by over 6%.
Time and again, Kyle Bass’s confident forecasts have proven wrong – often catastrophically so. Most famously, he’s been saying for years that the Japanese economy is an immense Ponzi scheme and that any minute now the market will catch on – leading inevitably to a debt crisis that sends bond yields sky-high and makes the yen all but worthless. In July 2013, he warned that this implosion would come within about two years – and would rock international markets so dramatically as to force the Western world to reconstruct its economic order from the ground up.
His doom-and-gloom prophecies for Japan, however, have yet to be fulfilled. And as time has gone by, more and more observers have clobbered his analysis. In May 2012, Joe Weisenthal of Business Insider called Bass’s take on Japan “totally simplistic and incorrect.” Noting that Bass bases his forecast largely on Japan’s debt-to-GDP ratio, Weisenthal pointed out that debt-to-GDP “is a lousy measure of anything” because it “just doesn’t tell you anything about interest rate risk or credit risk.”
After all, argued Weisenthal, foreigners hold plenty of U.S. debt, but this hasn’t sent the American economy into a tailspin; by contrast, Italy’s public debt is mostly held domestically, yet that country is headed down the tubes. Yes, Weisenthal acknowledges, “there are a lot of yen floating around the world,” but ultimately “that currency will find its way home.” This, in Weisenthal’s view, is what Kyle Bass doesn’t get:
For a country that borrows in its own currency, government spending finances borrowing! If Japan spends 100 billion yen on something, that’s 100 billion yen out there in the world that will eventually wind up in a financial institution, where ultimately 100 billion yen worth of JGB will be purchased.
Weisenthal also made this observation:
True sovereign bustups are not the result of accounting or numbers, but the result of some kind of social/political dysfunction. Japan is arguably the most stable society in the world, with low unemployment and a functioning economic and political culture. Thanks to the country’s population dynamics, Japan isn’t a growth dynamo, but there aren’t even the vaguest hints of instability. It’s not the kind of place where you’d see a meltdown.
Another expert who’s disputed Kyle Bass’s Japan scenario is Jesper Koll, head of Japanese equity research at J.P. Morgan Securities Japan. In Koll’s view, as paraphrased by Stephen Harner of Forbes, “Kyle Bass has not fully thought through some of his points, or has ignored contrary indications.” Yes, wrote Harner, the economic policies of Prime Minister Shinzō – who set a 2% inflation target and decreed a “Keynesian deficit spending stimulus” – might raise interest rates, but “there will be no crisis, and there may not be higher rates.”
Koll’s view, in short, is that Japanese government bonds “remain an attractive asset.” Koll made a number of cogent points – among them, that deregulation in several sectors of the Japanese economy could send productivity soaring and significantly boost the country’s economic health.
Curiously, while sounding a death knell for Japan, Kyle Bass has been bullish on – of all countries – Argentina. In September 2014, the BBC reported that unlike Moody’s and other ratings agencies, which were “very critical” of the regime of Cristina Fernández de Kirchner, “Kyle Bass believes that the current economic policy of the Argentinian government is the correct one.”
So gung-ho, in fact, has he been on investment in Argentina – which, it will be recalled, defaulted on its debt last year for the second time in thirteen years – that The New York Post commented on August 28, 2014, that Kyle Bass, addressing this subject on the previous day, had “sounded more like Argentina’s leftist economy minister Axel Kicillof than a U.S. hedge-fund manager.”
Was the Post on to something? Throughout Argentina’s debt crisis, Kyle Bass did come off not like a responsible financial manager but like a paid spokesman for the Casa Rosada (Argentina’s White House). As the BBC noted, Hayman Capital has a “good relationship” with Fernández – a leader who, like her late husband and predecessor, Néstor Kirchner, is notorious for her destructively socialist economic policies and her government’s staggering levels of corruption. The ruling by a New York judge that Argentina couldn’t dodge its debt to holdout creditor Paul Singer of Elliott Management was legally solid, but Kyle Bass wasn’t having any of it: Singer, he charged inappropriately, was “holding poor countries as hostages.”
Then there is his perplexing enthusiasm for General Motors. It’s been his biggest position for some time, although he admitted himself that a massive GM recall made 2014 “a tough year” for his firm. Still, he insisted that GM’s management was “doing a great job” and that the company was “much leaner” than in the 1990s. “By every metric” except the recall issue, Kyle Bass claimed, GM is “doing great.”
In February 2015, all his major moves having failed him, Kyle Basstried a new tack: selling pharmaceutical companies short and then exploiting a relatively new process, “inter partes review,” to challenge their patents. First he went after Acorda Therapeutics, whose major product is Ampyra, a treatment for multiple sclerosis, and whose stock fell nearly ten percent as a result of his challenge. It remains to be seen how this new move will pan out.
Meanwhile, Kyle Bass finds himself entangled in what may be America’s least enviable legal battle. A few years back, he went into business with the late Chris Kyle, subject of the recent film American Sniper and now a posthumous national hero; the enterprise has since gone bankrupt, and Chris Kyle’s widow, Taya, has sued a Hayman Capital attorney, making a host of serious charges, among them that he pressured her husband to surrender the rights to his firm’s now-iconic logo and that (in violation of Texas law) the lawyer never made clear that his ultimate loyalty was to Hayman and not Kyle. Also at issue are a loan on the Kyle family home and the profits from his bestselling memoir. However you cut it, it’s a shabby situation for a hedge-fund superstar to find himself in.
Briefly put, Kyle Bass’s star has slipped considerably since he made his name – and his fortune – on the subprime mortgage crisis. It seems fair to say that what looked for a while there like a Midas touch has turned out to be something more like a case of first-time gambler’s luck giving way to the usual Vegas pattern of loss after loss after loss.
Sure, he could still turn things around. Who knows? Stranger things have happened. But given his recent record, we wouldn’t bet on it.