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Fed should pay every American more, let hedge funds and billionaires ‘get wiped out,’ says Social Capital CEO

'What we’ve done is disproportionately prop up poor-performing CEOs and boards,' Social Capital CEO Chamath Palihapitiya says. 'Let them get wiped out.”

4/10/2020 3:52:00 AM

'What we’ve done is disproportionately prop up poor-performing CEOs and boards,' Social Capital CEO Chamath Palihapitiya says. 'Let them get wiped out.”

Is the Fed’s massive coronavirus stimulus package helping the ultra-rich at the expense of ordinary American workers? That’s what Chamath Palihapitiya, chief...

“ “On Main Street today, people are getting wiped out. Right now, rich CEOs are not, boards that have horrible governance are not. People are.” ” — Chamath Palihapitiya Appearing Thursday on CNBC’s “Fast Money Halftime Report” Palihapitiya said the U.S. shouldn’t be bailing out billionaires and hedge funds when it’s the people on Main Street who are the ones actually getting hurt.

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Jobless claims hit nearly 17 million on Thursday, and are likely even higher as businesses across the country close in an effort to slow the spread of COVID-19. Economists say the unemployment rate has likely surged above 10% and will only get worse.Palihapitiya’s argument, basically, is: Let those businesses fail, but without layoffs, and let the rich stakeholders absorb the pain.

When a business typically fails, Palihapitiya said, “it does not fire their employees,” instead going though a bankruptcy process that often preserves pensions, and employees end up owning more of the company in the end.“The people who get wiped out are the speculators” who own debt, and the equity holders. “These are the people that purport to be the most sophisticated investors in the world. They deserve to get wiped out,” Palihapitiya said. “But he employees don’t get wiped out. The pensions typically don’t get wiped out.”

iframe.twitter-tweet { width: 100% !important; } A baffled Scott Wapner, the show’s host, asked why anyone “deserves” to get wiped out.“Just to be clear on who we are talking about. We’re talking about a hedge fund that serves a bunch of billionaire family offices. Who cares? They don’t get the summer in the Hamptons?” Palihapitiya said. “Who cares? Let them get wiped out.”

“What we’ve done is disproportionately prop up poor-performing CEOs and boards, and you have to wash these people out,” he said.The Fed on Thursday set up a new $2.3 trillion lending program to help prop up small and mid-sized businesses.But Palihapitiya argued that rather giving workers relatively small $1,200 checks, the U.S. would be better off giving everyone larger payments directly, and skip businesses entirely.

“It would be better for the Fed to have given half a million to every man, woman and child in the United States,” he said.Later, Palihapitiya tweeted that Americans should also get their 2019 taxes refunded as a form of universal basic income. Read more: MarketWatch »

Including Virgin and its related companies it would seem. Yea, sending rich people into space is 'essential'. PrisonPlanet Hard not to consider that he has valid points. stop promoting this dude for god sake. Feds will never let our economy and valuable companies go broke . The government is making people stay at home, because they failed to properly prepare for, detect and then respond to a global health emergency. How is this the fault of businesses and their CEOs? I didn't agree with the 2008 bailouts, but this is very different.

We is waiting to for the opportunity I agree with him! If these corporate leaders can’t prepare for the worse case scenario then we as tax payers shouldn’t pay for the short comings of their ignorance. I am ok if market does it & not coronavirus. That’s what makes this Chamath a charlatan 🙄 Capitalism is what pays for socialist to exist. Hard truth, this social CEO clearly has no idea who pays him to exist. Quit the hypocrisy

Why not start with this CEO? He's rich and willing! End the Fed. They are the cause of the problems - not the solution to the monetary / financial system. Keep pushing Chamath. We are listening and onecssy accomplish our goals. Thing is the government made the businesses close. This guy is actually is being a simpleton

I agree companies that have a history of performing poorly should not be bailed out by the federal government. We keep supporting these failing companies and spending millions of dollars doing it. This is the biggest crock. He is speculating about things that have not even happened. Am I a speculator holding UA or Delta debt or an I believer in American Companies? guypbenson redsteeze

Really ? Go research the United Airlline bankruptcy ...every employee lost ! Especially the lower paid employees that lost a part of their pension Chamath for President! This guy wants to be a billionaire himself. And he would LOVE it if he could buy up cheap stock from bankrupt corporations. LiquidityTrap: Thank you chamath; wisely spoken!

Chamath has always awesome, more notes from his many podcast appearances below: LolaMotz Let. It. Burn. I’ve never seen almost all commenters on MW thread agree... More of the best of Chamath many podcast interviews: OMG.. who is this guy? Brilliant... why am I only learning of him now? He is right on.. if Darwinism is good for the lower classes it is good for the investor classes. Thin the heard of looser hedge funds I say!

'...Give half a million to every man woman and child.' It's not that easy, you'd have to have countless strings attached so the money stays in country and is used for the betterment of the community. Can't have millions of people buying meth and tigers because it's a thing How peculiar. RihardBranson = 'poor-performing CEOs and boards' we should as you say 'let them get wiped out' chamath He's always begging for UKGov money while taking our beloved health service NHS to court! Why are you the Chair virgingalactic?

This woke capitalist made his fortune from the Facebook IPO which itself was possible because the Fed bailed out Wall Street after the financial crisis Republicans are going to get slaughtered in November. I absolutely agree. The government shouldn't support those gamblers who screw with the market, they should lose like everyone else, this money should help the people who are trying to make ends meet, to house the homeless, not some arrogant gambling idiots

jimcramer The only guy on wallstret that tells it like it is ! Who knows if we are lucky maybe the entire empire will finally collapse one day and we can finally rebuild. People will be chanting end the Fed ! They can only do so much damage before the masses finally catch on. Legend Right on. Could not agree more!

Yep. Let the market weed out bad actors Some green shoots of common sense finally sprouting across the country. 'bout f'ing time. Accountability and responsibility are going right out the window in all aspects of life and it's here to stay in afraid. Sounds like a great idea! Exactly what ewarren was suggesting. Brilliant minds think alike JoeBiden SenSchumer SpeakerPelosi

This guy is right Yes I agree 100% People are catching up to Socialism for the rich, capitalism for the poor. It’s not going to end up well. Sooner or later crap it’s going to hit the fan. Glad that at least someone is brushing ears of the CNBC idiots ! Totally agree. Companies with poor management and no savings. Yet our tax dollars are going to bailout hedge funds and junk bond etf speculators so companies can give their CEOs and boards huge bonuses. GOP FederalReserve Bailouts

State Funding Woes Are Dragging the Fed Into Muni-Market RebootReviving the market for bonds sold by state and local governments is shaping up as one of the stiffest tests in the Federal Reserve’s campaign to restore financial normalcy. sorry, no spirit... later loooserssss! The Fed see anything above food riots as worthy of a nobel prize.

Why Won’t The Fed Help States Facing A COVID-19 Cash Crisis?The muni bond market is worth nearly $4 trillion, but the Fed has been reluctant to jump in. AaronLafond murdered Abigail Williams and Liberty German AbbyandLibby DelphiMurders TrumpPandemic Because the GOP Idea of “Conservatism” prevents federalist intervention into states. Remember, they call it “socialism”. This Pandemic shows Conservative Ideology to be worse than bankrupt, but also inhumane.

Fed temporarily lifts Wells Fargo's asset cap so bank can lend to small businesses

The Fed is lifting Wells Fargo's asset cap so it can help lend to small businessThe Fed had imposed the restrictions following the bank's fake account scandal in which it created millions of accounts for customers without their knowledge. The same Wells Fargo that FRAUDULENTLY opened accounts for it's own customers?...... 👍 Initial pop...then everyone saying 'wait, how bad was their balance sheet?' Aren’t these the crooks that were making fraudulent accounts and stealing from customers? Bad move.

Fed eases Wells Fargo restrictions to speed small business loansThe Federal Reserve eased the punitive growth restrictions it placed on Wells Fargo after a raft of consumer abuse scandals, allowing the giant bank to offer government-backed loans to small and medium-sized businesses This bank should have been closed and never reopened. Finally, the Federal Reserve has finally done some to help Wells Fargo's many American customers take part in the new Congressional commitment for government-backed loans to small and medium-sized businesses. I'm sure they will assist all customers with their individual benefits. Aren't Wells Fargo and Deutsche Bank linked?

Fed will keep rates near zero until economy has 'weathered' coronavirus impact, minutes showNot only did members believe it was important to use all their rate power now, but also that they intend to keep rates anchored at the bottom for the foreseeable future. Woo who! Rally time! more and more inflate market