Kochland by Christopher Leonard

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Jason
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Kochland by Christopher Leonard

Post by Jason » Fri Sep 06, 2019 7:47 am

For people like myself who like a good story about a business as opposed to technical book about business, this is proving to be very interesting read. Most profiles of the Koch brothers dig into how they spend their money, this delves into how they made it. Part business, part politics, part history, part corporate gossip, part sleuth, it totals into a compelling account of the most successful and despicable fucking douchebags in recent memory. I am enjoying it. It has movie written all over it.

sarger17
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Re: Kochland by Christopher Leonard

Post by sarger17 » Sun Sep 22, 2019 4:08 pm

LOLOLOLOLOL

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TheWanderingScholar
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Re: Kochland by Christopher Leonard

Post by TheWanderingScholar » Sun Sep 22, 2019 10:11 pm

Okay. Nice conservation buddy.

Jason
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Re: Kochland by Christopher Leonard

Post by Jason » Fri Sep 27, 2019 2:58 pm

Koch Industries makes their money in natural resources - oil, forestry, grain, livestock et. al. Everything from extraction, conversion, transportation, not to mention the creation of trading floors that revolutionized the exchange of these resources/commodities to the extent that Wall Street eventually emulated their methods. Their purchase of Purina was a disaster because they didn't conduct proper due diligence on pig contracts - they didn't realize their outstanding and on-going commitment to purchasing actual pigs which is well, allegorical to say the least. Because they weren't creating smartphones, or search engines, or social media platforms, they flew completely anonymously. I don't know exactly how the normal personal can make money from this area of the economy, but it is there, and people are making fortunes. I imagine it would be of interest to those looking beyond Facebook stock and real estate. As they say, between New York and Los Angeles, lies America, and these guys are monetizing it to no end without anyone knowing exactly who they are under a corporate structure that is impenetrable, like an invisible, raping Goliath that leaves not even a smidge of DNA behind.

Smashter
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Re: Kochland by Christopher Leonard

Post by Smashter » Fri Sep 27, 2019 3:29 pm

I really want to read this now. Thanks for highlighting it.

Are you liking them more or less as you learn their story? I feel like the "raping Goliath" part should answer my question, but you also called them "despicable fucking douchebags" which I take as a Jason term of endearment.
Last edited by Smashter on Sat Sep 28, 2019 4:22 pm, edited 1 time in total.

tonyedgecombe
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Re: Kochland by Christopher Leonard

Post by tonyedgecombe » Sat Sep 28, 2019 1:15 am

Jason wrote:
Fri Sep 27, 2019 2:58 pm
As they say, between New York and Los Angeles, lies America, and these guys are monetizing it to no end without anyone knowing exactly who they are under a corporate structure that is impenetrable, like an invisible, raping Goliath that leaves not even a smidge of DNA behind.
Only one of them is now:

https://www.bbc.co.uk/news/world-us-canada-49438682

Jason
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Re: Kochland by Christopher Leonard

Post by Jason » Sat Sep 28, 2019 7:31 am

There is Brothers Karamazof/Godfather three-brothers dimension to the Koch story. Like all analogies, it doesn't align perfectly because there were actually four Koch brothers, the oldest Fred Jr., never having anything to do with the business, leaving Charles as the singular force behind Koch industries which gives it a Trumpian correlation both in name and substance. David, who just died, was the public face as Charles was not comfortable in that role. David's twin brother Bill sued Charles, they settled, at which point Bill was no longer involved in the company. Bottom line, if you are born into a dynastic family, either real or fictional, and your first name is some sort of derivation of Frederick, you're fucked.* That being said, compared to Fredo Corleone and Fred Trump, Jr. at least Fred Koch has lived to see his younger brother rise to such rarified yet dubious heights.

The companion book to Kochland is Dark Money by Pauline Mayer which came out earlier and documents how the Koch brothers through the Citizens United Supreme court decision were able to channel unlimited funds into elections ( see Scott Walker, Milwaukee).

Kochland opens up with an investigation into how the Koch were stealing money from Indian reservations by underreporting the oil they were carting off. There is a criminality lurking behind their liberatarianism. I suppose my reference to them as douchebags is an admixture of admiration and revulsion. The sheer scope and strategy behind their corporate and political strategies are breathtaking.

Edit: *If there was a Fred Kennedy, one can assume he would have been shot in the head while driving his car at which point he and his mistress who was giving him fellatio at the time would have careened off a bridge at the exact moment a small plane crashed into the river.
Last edited by Jason on Sat Sep 28, 2019 8:50 am, edited 1 time in total.

jacob
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Re: Kochland by Christopher Leonard

Post by jacob » Sat Sep 28, 2019 8:44 am

Jason wrote:
Sat Sep 28, 2019 7:31 am
Bottom line, if you are born into a dynastic family, either real or fictional, and your first name is some sort of derivation of Frederick, you're fucked.
Uh oh ... : https://en.wikipedia.org/wiki/List_of_D ... 80%931863)

Jean
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Re: Kochland by Christopher Leonard

Post by Jean » Sat Sep 28, 2019 9:15 am

I happen to bé in Fredericia right now.

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Re: Kochland by Christopher Leonard

Post by Jason » Sat Sep 28, 2019 9:20 am

jacob wrote:
Sat Sep 28, 2019 8:44 am
Uh oh ... : https://en.wikipedia.org/wiki/List_of_D ... 80%931863)
Are you saying you're a descendant of that shield? That gold chain Frederick I is flashing has to be worth mad Jacobs.

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Re: Kochland by Christopher Leonard

Post by theanimal » Tue Oct 08, 2019 9:04 pm

I placed a hold on it at the library, I'm #12. I read through the free preview on Amazon and was hooked. Can't wait to get it.

Edit: For those who aren't aware, Charles Koch was on Tim Ferriss' podcast a couple months ago. https://tim.blog/2019/08/11/charles-koch/

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Re: Kochland by Christopher Leonard

Post by Jason » Fri Oct 18, 2019 7:36 am

Interesting chapter on derivative trading. By leveraging and expanding upon competitive advantages - namely information - due to their core business activities, the profit from their commodities trading eventually exceeded the profits from the actual sale of those commodities. Simply put, Koch Industries began making more money on trading oil contracts than on the sale of oil because of its expertise and experience in oil markets. They hired the best meteorologists to track weather patterns in order to pinpoint periods of volatility and subsequently traded on basic supply/demand discrepancies. However, they got to a point where they learned how to make money not on the ratio of supply/demand but on the ratio of volatility itself. All that was required was for oil prices to be volatile. They didn't need to know in which direction. It was like Tim Cook setting up a trading floor in Apple headquarters that specialized in iPhone futures and that division eventually becoming more profitable than the iPhone division.

Stahlmann mentioned in his investing thread "making money from money." It doesn't get any better than this. It has definitely made me think more about the concept, just on my own scale.

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Re: Kochland by Christopher Leonard

Post by Jason » Sat Oct 19, 2019 6:01 am

Some may recall the Sacramento, CA power crisis in 2000-20001 due to market manipulations of electricity supply. Big Brothers guess who was behind that (if you surmised Enron you are also correct). Being that the Koch brothers are still here, we now know who the smartest guys in the room really were. This event led to the demise of Governor Gray Davis and the ascension of Arnold Schwarzenegger to the governorship. So yes, The Terminator owes The Koch Brothers.

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Re: Kochland by Christopher Leonard

Post by fiby41 » Sat Oct 19, 2019 6:23 am

Jason wrote:
Sat Oct 19, 2019 6:01 am
due to market manipulations of electricity supply. (if you surmised Enron you are also correct).
Same Enron 'Power Play' (from the book with the same name) was here half the world across:

"Somewhere in my musty papers, I have a clipping of a Hindustan Times report from 8 July 1999. It says that the Maharashtra State Electricity Board (MSEB) asked the Tata Electric Co. (TEC) to “back down its power generation by 200-400 MW". TEC was then the major supplier of electricity to the city of Mumbai, and this was a significant chunk—11-22%—of its installed capacity.

MSEB asked for this “despite TEC offering power at a rock bottom rate of Rs1.80 per kwh. MSEB [was instead] sourcing its requirements from the controversial Enron’s Dabhol Power Corporation (DPC) which is charging anything between Rs3.01 and Rs4.25 [per kwh]." "

Jason
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Re: Kochland by Christopher Leonard

Post by Jason » Sat Oct 19, 2019 7:31 am

The topic is a conflation of complex financial instruments and complex scientific issues. At least to me.

The distinction between trading electricity and trading oil is that (1) oil can be stored and (2) the transfer of oil can be tracked in real time. Electrons are always active in the conduits. There is no such thing as an electron tank. Also, you don't know exactly where electrons are, you only can know where they were after they serviced the customer. Koch took advantage on both these characteristics of electricity, the latter illegally (they said they moved electricity that wasn't moved). The upshot is that the market manipulation had a real time consequence. The public services were forced to video gamesque routing of electrons when it came to making sure electricity was supplied where it was demanded. With regard to the financial end, suffice it to say Koch Industries is not subject to renegotiating outstanding invoices.

Koch Brothers benefited from the demise of New Deal regulation on public utilities and natural resources. However, the term is really not de-regulation its re-regulation. Regulation does not go away. It just gets moved to another regulator. Ultimately, in this instance, it was the financial markets.

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