The Power of the Boycott - Max Keiser on Economics 101

[Poboy]

The Power of the Boycott - Max Keiser on Economics 101

Max Keiser joins us to talk about Karmabanque, a way to use the leverage of the hedge funds to turn Wall Street against the multinationals. We discuss the Coke boycott and the power of strategic activism.

VIDEO-10 minutes
http://vodpod.com/watch/4026038-the-power-of-the-boycott-max-keiser-on-economics-101

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He explains it simply and how effective this strategy might be. The powers are too big to fight head-on, so this is a financial jujitsu of sorts.

Here is a direct link to the site itself that he talks about in the video-
http://www.karmabanque.com /

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Background/past as example-


Boycott Coca Cola

The campaign tried to help activists, environmentalists, etc. expand the public domain by first cleaning up the toxic slick in financial markets. The right wing tried to shut this campaign down, of course, by smearing it in the press; falsely accusing us of instigating market manipulation. But they ended up with egg on their face as their crony legal friends over at Washington Legal foundation, after looking at Karmabanque wrote an opinion that basically gave the green light to combining boycotts with short selling to pressure companies to amend their public domain threatening ways.

We had outsmarted them using bastard capitalism- financialism - to undo the damage wrought by the bankers and brokers operating behind their unregulated financial curtains. Unfortunately the activist community never jumped on this opportunity for reasons I have discussed many times, mainly, they thought that any strategy that utilized markets was somehow a net gain for the corporations even though the clear purpose of the campaign was to pressure a net loss in the form of a dropping stock price.

The charge of instigating market manipulation got me interested in exposing real market manipulation so we made some documentaries for Al Jazeera, including “Rigged Markets,” a film that exposed how the SEC was doing nothing to stop naked short selling, a technique of counterfeiting stock to drive down the price in such a way that the film posited was creating systemic risk similar to what we saw in 1929. Within a couple of years both Bear Stearns and Lehman Brothers were destroyed by hedge funds manipulating and colluding using naked short selling – as we explained in our film – to wipe out these companies and set the stage for the global financial meltdown we are all familiar with.

http://maxkeiser.com/2009/04/19/max-keiser-blog-revisiting-boycott-hedge-fund-campaign-against-coke /


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The Bonnie and Clyde of Karmabanque
Smart boycotts: redistributing wealth away from social irresponsibility

Greenpeace International


The boycott was invented in 1880 in Ireland. It's been a staple of labour, human rights, and environmental activism ever since, in basically the same form as when a group of Irish tenants refused to sell to, buy from, or otherwise deal with an English landowner, Capt. Charles Cunningham Boycott, because of his eviction policies. Well-run boycotts have been successful in enforcing government and corporate responsibility for more than a century. But if Max Keiser and Stacy Herbert have their way, the traditional boycott is going to make room for a new and improved formula: the internet-enabled, market-savvy, hedge-fund leveraged "smart boycott." It's the founding concept behind a new web community called "Karmabanque."
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Karmabanque describes its audience as "Activists, Anarchists, and Hedge Funds." It's a stock exchange of sorts, but with a brilliant and maniacal twist: it trades on the strength of boycotts.

If you're an activist, you can research a corporation's vulnerability to a boycott by using the Karmabanque "Boycott Profitability Ratio." The Boycott Profitability Ratio (BPR) roughly measures the impact that every dollar you DON'T spend with a company will have on its market capitalisation. A company like Exxon is highly insulated from a retail boycott - only a small percentage of its profits come from consumers at the pump. A campaign, like Greenpeace's, to encourage people to not buy Exxon has to be global in reach and expect a long, hard haul before it sees results. Coca Cola, on the other hand, derives almost all of its value from how often consumers buy Coke, and a boycott of Coke can hit the company very hard very quickly.

Anyone can start a boycott of any company. By doing so, you create a new 'security' and the KbQ database calculates where it stands in the KbQ index, taking into account the company's vulnerability, and the level of support from other Karmabanque members for the boycott.
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If enough funds are betting that a stock is going down in value, shareholders and investment analysts begin to bail out of their long positions on the stock. Stock value further collapses, and by now any good activist is talking to the company about how it can make changes that will end the boycott.

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Q: Max, you talk about "smart boycotts" at Karmabanque. What's dumb about traditional ones?
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Q: So you're recommending that hedge funds put their money where the boycotts are, and bet against the success of socially irresponsible multinationals?
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Q: We at Greenpeace have tried for decades now to "monetise" environmental harm by ensuring that the whole cost of a product is reflected in its price -through government regulation, trade restrictions, and cradle-to-grave responsibility for a product's harm. You're really talking about pitting a corporation's greed against the public perception of harm.
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FULL-
http://www.greenpeace.org/international/en/news/features/the-bonnie-and-clyde-of-karmab/

[handmade34]

1. been talking boycotts for

40 years... it takes commitment and (often) sacrifice

grapes anyone?

[Poboy]

2. While this is true, the OP is informational in the idea of the strategic boycott.

I had posted within a thread a few days ago, and a few people suggested I make it an OP.