Monday, March 30, 2015
Carlyle Group's 14k Tweets
Rounding up The Carlyle Group has 14k Twitter fans. Having Congress in your pocket is pure gold.
Note: The PEU lobbying group spent a"great day on Capitol Hill. My pet name for this association is Private Equity Capital Knowledge Executed Responsibly (PECKER). To me it fits.
Sunday, March 29, 2015
Carlyle's Commitments Don't Hold Water
The Carlyle Group made two promises to Missoula, Montana when it purchased Park Water in 2011. It said it would offer the City of Missoula an opportunity to purchase the Mountain Water division. Second, it said it would not bottle Montana Mountain Water to sell on a global stage. Both promises evaporated when Carlyle reached a deal to sell Park Water to Algonquin/Liberty Utilities.
Carlyle found public infrastructure distasteful and shifted gears to energy. It seems a better fit for oily private equity underwriters (PEU), given their practice of holding others over a barrel.
Update 4-3-15: Carlyle's Robert Dove testified that he did not negotiate with the city for the purchase of Mountain Water.
Saturday, March 28, 2015
Obama's Intelligence Oversight Board a Corporate Lot
Curious about the Justice Department's decision to call "state secrets" in a civil lawsuit against United Against Nuclear Iran (a nonprofit advocacy group), I wondered who provides oversight for President Obama?
The President has an Intelligence Advisory Board and Intelligence Oversight Board. All of the Oversight Board members sit on the larger Intelligence Advisory Board.
One name jumped out at me, The Carlyle Group's Julius Genachowski.
Julius Genachowski-
Managing Director and Partner -- The Carlyle Group
Board of Directors -- MasterCard and Sonos
Carlyle's global reach and ability to entice and influence politicians are legendary. The private equity underwriter (PEU) has nearly $200 billion in assets under management and is focused on acquiring cheap oil/energy assets
Jami Miscik
President and Vice chairman -- Kissinger Associates, Inc.
Board of Directors -- Morgan Stanley and EMC
Global Head of Sovereign Risk at Lehman Brothers, a former investment bank (June 2005 to September 2008) when Lehman Brothers imploded
Henry Kissinger's consulting firm has long been associated with global tamperers. It is bipartisan in nature. I'm not sure I'd want to list a global risk job with Lehman Brothers on my resume. The government did not bail out Lehman Brothers, which employed Jeb Bush in its private equity division. However, the Federal Reserve Bank of New York provided $138 billion in loans to Lehman.
Mona SutphenMona Sutphen is a partner with a firm offering political risk, risk management, government relations, strategic scenario planning, and frontier markets advisory services. Drilling Info Holdings services those in the global race for oil. Last year Patent Properties announced it would soon offer a "disruptive licensing solution for the mass market of patent owners and users." Patent rights sharing is timely as secret trade deals work their way through the White House and Congress.
Partner MacroAdvisory Partners
Board of Directors Drilling Info Holdings
Board of Advisors Patent Properties
Former UBS Managing Director
Shirley JacksonMs. Jackson has by far the most corporate board positions and director income. Also, four of the five public companies are global.
President -- Rensselaer Polytechnic Institute
Board of Directors -- Marathon Oil, FedEx Corporation, International Business Machines Corporation, Medtronic, Inc.and Public Service Enterprise Group Incorporated
Former Chairman of NYSE Group, Inc.
Former Director of AT&T, U.S. Steel, KeyCorp and NYSE Euronext
Neal Wolin, Chair
Retired from Interim Secretary U.S. Treasury in September 2013. Neal planned "to take a post with a not-yet-determined think tank as he mulls other options outside government."
Unlike Secretary Tim Geithner (Council on Foreign Relations and Warburg Pincus), Neal Wolin has not announced any think tank affiliation, much less PEU employment in the eighteen months since. His bio states about his current activities:
He is a member of the Council on Foreign Relations, of the bar in Illinois, Connecticut and the District of Columbia, and is currently a member of the President's Intelligence Advisory Board.It makes one wonder if Neal is cashing in via an off the record, black box venture. Neal chairs the group responsible for intelligence oversight which is relatively new in composition. Ten of its fourteen members turned over in 2013. A board's character can be seen by who they ask to leave:
“They kicked me off,” said former Rep. Lee Hamilton (D-Ind.). “I was on it a long time under Bush and under Obama. They wanted to make some changes.”
“I don’t know anything about whether they’ve brought in new members. They thanked me and that’s about all I know,” added Hamilton, widely known for his service as vice chairman of the 9/11 Commission.
The 82-year-old former congressman — who has headed Indiana University’s Center for Congress since 2010 — said he wasn’t upset about being booted from the PIAB, although he remains in the dark about precisely why he was shown the door.
Why would Obama's intelligence oversight board remove an ethical representative with decades of historical knowledge like Lee Hamilton? They didn't say.
What intelligence oversight does this crew provide? I'll venture they push their corporate and personal interests. It may be subtle, but I doubt it. America's corporatist global perspective is in your face and ready to spread.
Thursday, March 26, 2015
Carlyle Buys Romanian Assets from Sterling Resources
Business Review reported:
Sterling Resources announced on Thursday that it has entered into the “Romanian Sale Agreement” to sell its entire Romanian business to Carlyle International Energy Partners (CIEP), an affiliate of The Carlyle Group
Carlyle's deal is with a financially stressed energy company:
The next such amortization and interest payment is due on April 30, 2015, but as previously reported the company does not expect to have sufficient funds to make the payment in full on that date. As completion of the Romanian sale is likely to be after this date, the company is considering options to improve its short term liquidity position.
Which leads us to another way Carlyle takes over distressed energy assets, buying senior debt which becomes equity after default. I sense gypsies, tramps and thieves of the PEU variety.
Update 6-19-15: Carlyle closed on Sterling Resources.
U.S. Interest in Protecting Fran
Why would the United States Justice Department assert "state secrets" in a civil defamation lawsuit against UANI, a nonprofit issue group? Because United Against Nuclear Iran is not a nonprofit issue group. It's a federal corporate, economic and political lever.
Frances Fragos Townsend helped found and runs UANI. Consider a few of her many appointments:
Ms. Townsend chairs the Board of the Intelligence and National Security Alliance and is a member of the Board of the Bipartisan Policy Council. She is also a member of the Council on Foreign Relations and the Trilateral Commission.
Ms. Townsend spent 13 years at the U.S. Department of Justice under the administrations of President George H. W. Bush, President Bill Clinton and President George W. Bush. Ms. Townsend is a Director and chairs the compensation committees of three private company Boards and serves as Director of two public companies.Also, Ms. Townsend served on President George W. Bush's and Barack Obama's Presidential Intelligence Advisory Board. CNN stated Townsend serves on the Department of Homeland Security and CIA external advisory committees Either agency could be behind UANI.
Fran gave her loyalty to political hackery long ago and the system will protect her.
Tenet Healthcare's lobbyists visited the White House several times while Fran's "researched" her report. Jeb Bush joined the Tenet Healthcare Board of Directors a year after brother W.'s White House foisted Fran's whitewash on the public.
Frances Townsend has been richly rewarded for putting corporate loyalty above public service. President George W. Bush refused to release e-mails from Townsend, Andy Card, Joe Hagin and others involved in his hapless Hurricane Katrina response. I imagine those e-mails are buried under legal protection, "state secrets" or otherwise.
The public has no right to know how insiders protect and enrich each other as they dance between public service, private equity underwriters (PEU)and government front groups. Under the Government-Corporate Monstrosity, they are one in the same.
Update 11-1-15: Fran started another NGO to upend radical Islamic terror, specifically recruitment and financing. The Counter Extremism Project sounds similar to effort started by the Concordia Kids.
Tuesday, March 24, 2015
Carlyle's Rubenstein Wants TPP Trade Deal
CNBC interviewed Carlyle Group co-founder David Rubenstein. Near the end of the interview he addressed trade legislation:
"... the business community would like to see is trade legislation passed by the Congress in this session. I think that would do a great deal for the U.S. economy, particularly the Pacific related trade agreement. If that could get done, passed through the Congress I think that would do a great deal for the U.S. export market. I think it would be good for the countries that sign on to it. We're very focused in the business community on trade legislation. That's probably the highest priority right now."Got that Congress? They pushed through pension busting legislation for the business community with no sunshine or debate. Next up are trade deals that put business rights above national laws and court systems. It's our PEU world, where politicians Red and Blue love PEU.
Monday, March 23, 2015
U.S. Congress Clears Deck for Pension Decimation
The Columbus Dispatch reported:
Many retirees are unaware "of the risk to their pension as a result of the legislation passed in December as part of a spending bill meant to run the federal government through the rest of its fiscal year. The legislation affecting the retirees was added at the last minute. It is targeted at companies that enter into pension plans with other companies. There are about 10 million workers and retirees in 1,400 multiemployer plans, according to the Pension Rights Center in Washington."How does such an important piece of legislation, one impacting millions of retirees on a long term basis, get inserted into a federal temporary funding bill? It's a result of corporate sponsored politicians.
The Carlyle Group's major innovation was locating in Washington, D.C., the home of purchased politicians and a $3.5 trillion budget.Corporations and their private equity underwriting (PEU) owners hate funding pensions. They'd rather use cash and borrowings for dividends and special distributions.
Consider this 2011 statement from an ex-business reporter:
I have seen so many people -- particularly those in their 50s - 70s -- taken apart by what has happened in their industry as greed has hollowed out the economy. These are people took pride in their jobs and held themselves to this invisible standard that we all just took for granted, but is being wiped out.The Carlyle Group shed their pension liability in their deals for RAC and Brintons'. PEUs will take any chance they have to dump health care and retirement expenses to workers.
Congress helped them out with PPACA, commonly known as Obamacare. Corporations imitated public exchanges, offering private exchanges to retirees. In doing so many turned retiree healthcare into a defined contribution benefit, where the employer pays a fixed amount and the retiree "shops" for a plan.
The big hits are on the horizon. Pension accounting changes are expected to show massive funding deficits for many state and local pensions. If you think this isn't coordinated consider:
May 3, 2014The greed and leverage boys know tapped out state and local governments, with reduced ability to raise debt, will need to turn their way for infrastructure projects. Private equity likes paying reduced prices for predictable revenue streams.
A new office at the U.S. Treasury Department will focus on state and local finance issues, including distressed municipalities and their management of pension and other unfunded liabilities.
September 9, 2014
In an inscrutable move that has alarmed state treasurers, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, just changed the liquidity requirements for the nation’s largest banks. Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA).
PEUs and their purchased politicians never let a good crisis go by. Pensions are the target, which happen to come with spillover benefits.
Sunday, March 22, 2015
Carlyle's Rubenstein Prophesized Bowden
Carlyle Group co-founder David Rubenstein spoke to SEC regulation of private equity in a Yale interview in 2013. He stated (at roughly the twelve minute mark):
"Relatively speaking we're not that heavily regulated. Dodd-Frank legislation was 2,300 pages. It more or less didn't do anything to private equity."
"It said if you manage $50 million or more, you register with the SEC. It doesn't really mean all that much in terms of oversight."
Which brings us to the SEC's Andrew Bowden, the man who once talked tough about private equity doing shady things to limited partners via fee allocations. NakedCapitalism reported Bowden's flip-flop at Stanford Law School, where he appeared with a KKR board member (the moderator) and Oak Hill's general counsel. Bowden's former tough talk turned to pander:
...the people in private equity, they’re the greatest, they’re actually adding value to their clients, they’re getting paid really really well, you know, if I was in that position, the one thing I would think to myself as I skipped to work was like just “Let’s not mess it up. You know, this is the greatest thing there, I’m helping people, I’m doing OK myself.”
And so my view on the small ones is, I still think this is one of…I tell my son, I have a teenaged son, I tell him, “Cole, you want to be in private equity. That’s where to go, that’s a great business, that’s a really good business. That’ll be good for you.” So for me personally, as we share our opinions…
Questioner [interrupting] I’d love to hire your son, by the way. That’s a deal.
KKR already hired General David Petraeus and Ken Mehlman. The Carlyle Group hired a young Frist and Axelrod. Give the teenage Bowden his $18 million, like GTCR founder and Illinois Governor Bruce Rauner did for a younger Rahm Emanuel. With his security pot in place the teen can focus on making the world safe for private equity, which is the real aim.
Mr. Rubenstein spoke to the top seven to ten private equity underwriters (PEU) in the Yale interview. He mentioned Carlyle, Blackstone, Apollo, TPG, KKR, Bain, Oaktree, Warburg Pincus and Ares.
They are all based in the United States How can it be that the United States, which was 46% of the world's economy in 1960, now about 20%, 19% or so. How can we have 100% of the global private equity firms?"Rubenstein sees that changing as people in other countries start private equity firms, some with government support. His prediction provides insights to why America spanks the world in the global private equity race 100% to zero. First, PEUs avoided oversight, while retaining preferred taxation. Second, many affiliates receive direct and indirect public subsidies, federal, state and local.
I don't believe the "helping people" meme, especially as Mr. Rubenstein envisions a world where the wealthy do very well and children have less prosperity than their parents. He and his private equity brethren created that very world. He need not act like he was a bystander for this sad development.
Carlyle and company are a root cause. Bowden is part of the system making the world safe for global private equity.
U.S. Billionaires Target Global Oil
"The North Sea is uninvestable, a no-go area," an anonymous investment banker said. "Anybody who has a mature position is desperately trying to get out. But it is extremely difficult to get out."
That means cheap prices for those wanting to get in, like Carlyle and Blackstone. The United Kingdom made it easier for private equity underwriters by "slashing taxes on industry profits and introducing a new investment allowance to boost exploration."
Sixty per cent of Carlyle's fund was likely to be invested in producing fields, much of them offshore, with a substantial portion in the UK North Sea, said people familiar with the plans.
That's the PEU way. One the way in they prefer to buy cheap, pay interest-not taxes, and get direct public subsidies. They also thing long term. Might Carlyle's North Sea oil production be shipped through an open Arctic, another area where Rubenstein likes to play and invest?
Update 3-24-15: Carlyle's Rubenstein told CNBC oil and energy are the place to be.
Thursday, March 19, 2015
Carlyle's Addison Lee Private Jets
Private Fly's press release stated::
Addison Lee Private Jets, will provide Addison Lee customers with free executive transfers to and from private London airfields for all charter flights booked via the service.
Launching as part of Addison Lee's redesigned new website, Addison Lee Private Jets offers its customers instant online cost estimates for private jet hire with access to an accredited global charter operator network. PrivateFly.com will also provide Addison Lee customers with 24-hour access to a dedicated operations team for phone advice. Every booking will include Premier VIP Mercedes return transfers.
In addition Addison Lee began offering taxi services in New York City. DisCo reported:
Driven on by the deep pockets of owners Carlyle Group, Addison Lee has exploded this month into the New York City cab market. They are taking the first step towards what CEO Liam Griffin says will be the first “truly integrated global network of ground transport providers”Carlyle is a truly integrated global network of billionaires and gosh darn it, they need luxury transportation. I bet they don't have to share the Premier VIP Mercedes with five other people.
Wednesday, March 18, 2015
Apple Valley, Call Missoula re: Carlyle's Greed
Hesperia Star reported:
Scores of residents turned out Monday for two public hearings on the proposed sale of a local water supplier to Algonquin Power Company's Liberty Utilities. More than 150 people crowded the conference room at Apple Valley's Development Center at 2 p.m. Monday. A night session at 6 p.m. attracted even more people.
The proposed sale faces approval or denial by the California Public Utilities Commission and would include payment of $325 million, including assumption of $80 million in debt.
The Carlyle Group owns Park Water Co. and Western Water Holdings LLC. The sale price would be $405 million, plus whatever fees Carlyle can take on. Carlyle paid $102 million for Park/WWH in 2011. That's a $303 million profit, nearly a triple bagger.
Also, Carlyle charged Mountain Water $2 million a year in management fees. They frequently charge a multiple of that amount to cancel those fees. In addition, Carlyle siphoned off at least $5 million in dividends from Park Water/WWH.
Carlyle's offered their usual spin at the town hall meeting in Apple Valley:
"Carlyle recognized the short-term ownership was an issue," Robert Dove, managing director of The Carlyle Group, told the Daily Press during a break in the first of two sessions. "I think (Liberty) would be a good steward of the asset."
Flash back to 2011:
While Carlyle often sells companies it acquires for a profit, "it's a very long-term process," Searles said. "These folks are characterized by their ability to boost capital."
Carlyle has been willing in the past to have a fairly long-term investment horizon. The group's approach, generally, is not to drain money out of an acquired company and then try to sell it, Searles said. In fact, Carlyle could spend as long as a decade investing in the water companies to increase their value.
"They typically have not been quote ‘flippers,' " Searles said.
Carlyle is a six pack short of a decade. Say whatever is necessary to look good in the present moment, that's what PEU boys do. Robert Dove transformed from a long term investor to a "short-term owner." It's flipping time.
Monday, March 16, 2015
Carlyle Flipped Indian Companies
The Carlyle Group monetized a number of Indian affiliates for huge returns. BusinessStandardreported:
Carlyle exited Repco Home Finance with a 6x return, Elitecore with 8x return and Tirumala with 4.5x return on investment.Returns like that are untouchable.
Sunday, March 15, 2015
Winning Global Teacher Gives Away $1 Million PEU Reward
BBC News reported:
Nancie Atwell, an English teacher from Maine in the United States, has been named as the winner of a competition to find the world's best teacher, with a prize of $1m (£680,000).
But Ms Atwell has promised to donate the money from the Global Teacher Prize to the school that she founded.
In 1990, Ms Atwell founded a school, the Center for Teaching and Learning in Edgecomb, Maine, where ideas for improving the teaching of reading and writingcould be tested and shared.
The article highlighted all the things a $1 million prize for the best global teacher is intended to achieve:
1) raise the status of teaching
2) help remind the public of the importance of teaching
3) attract the best people into teaching
4) hold teachers in high regard
5) serve as a a high profile way of demonstrating the importance of teaching
6) show teaching should be recognized as much as other high-paying careers, such asfinance or professional sports.
7) return teachers to their rightful position, belonging to one of the most respected professions in society
8) where teachers feel that society values their job, outcomes can be a lot better
Who is behind this Herculean effort?
The award has been created by the Varkey Foundation, the charitable arm of the GEMS education group, as a high-profile way of demonstrating the importance of teaching.GEMS Education is an affiliate of Blackstone, a huge private equity underwriter (PEU). Five months ago Blackstone invested in GEMS.
Fajr Capital, Mumtalakat and Blackstone acquire significant minority stake in GEMS Education. GEMS Education, a UAE born brand founded 54 years ago, is now the world’s largest provider of K-12 private education. (Blackstone Press Release 10-15-14)
Underlying the prize are rich financial firms intending to make huge profits from corporate education. The who behind the prize is discordant, but the how is also problematic. This occurs at two levels, actually educating young people and managing an education enterprise.
What insights might Ms. Atwell, the prize winner, have for us? Here's what she wrote in her book on how best to teach reading and writing (In the Middle, Chapter 12: The Business of Writing):
I don't teach expository prose to prepare students for the essays on standardized tests. The version of exposition called for by these prompts is so odd and specific it's a genre unto itself and should be taught and practiced, in the week or two before the test, using the test maker's sample prompts and under test-taking conditions. It's not necessary to devote a school year to test prep. But teachers do need to familiarize students with the format and demands of the writing task
I teach exposition so students will learn how to make writing work for them in the world—advocate for causes they believe in, seek answers to questions that baffle them, shed light, weigh in, and clear the way. To paraphrase Murray, problems make great subjects, especially for young writers. Expository genres teach them how to articulate ideas, gather evidence, send both out into the world, and try to have an influence there.
It's clear Ms. Atwell is intrinsically motivated by her love of reading, writing and teaching these subjects well. She donated the $1 million reward to the nonprofit school she founded. This evidence supports her commitment to her mission. Ms. Atwell did not spend her prize like a Wall Street banker at bonus time or professional boxer after a big win.
Her counsel on standardized test preparation puts in perspective our extrinsic judgment and reward systems. They exist and must be dealt with, but they are not a sound strategy for improving reading and writing for lifelong application.
Test prep, school rankings and concomitant rewards make manipulative managers happy. Speaking of such:
Ahead of the announcement of the winner, the US secretary for education, Arne Duncan, rang the US finalists to congratulate them.
Education Secretary Duncan had the opportunity to learn from the best global teacher. I doubt he listened. If he did, I'll bet Arne felt his story to be more inspiring.
Unfortunately abysmal management is again epidemic across our globe. Leaders' primarily employ weapons of minimum standards and extrinsic rewards.
A man once worked tirelessly to raise people and quality worldwide, Dr. W. Edwards Deming. He derided bad managers for using minimum standards to beat up workers. He taught leaders to focus on learning and improving processes. Dr. Deming rejected extrinsic rewards for the damage they inflict on individuals and teamwork. Manipulating people with rewards harms results and joy to be had from accomplishing complex tasks that require teamwork.
Dr. Deming said his lifetime body of management theory/practice, which is so badly needed today, came down to one thing, the Human Spirit.
Ms. Atwell has it, but global leaders don't understand it, much less how to foster its growth. Our best global teacher is surrounded by management blinded by greed and power. They want to wear her as a badge, a symbol of their greatness.
Blackstone's Stephen Schwarzman is predicted to the be the first man to bring home $1 billion in a year. Long ago Dr. Deming lamented the rise of leveraged buyouts (since re-branded private equity). Dr. Deming noted LBOs financial manipulations and how they hurt constancy of purpose. Private equity's intent is not to be in a business, but to flip that business for huge profits, while mining it for annual management fees and special dividends/distribution, often debt funded.
PEU greed and horrific management methods underlie the global teacher prize. The recipient Ms. Atwell rises above both, because that's who she is. Who do you want rebuilding our world, those with useful knowledge and theory or those with aspirations of greed and power?
I can hear Dr. Deming's voice booming, "Substitute Leadership." Instead we have leadership substitutes. Global management's march of madness continues. Is anything truly charitable in our PEU world?
Update 4-26-15: Dr. Deming said his message came down to one thing, the human spirit. PEUs and their horrific management practices can be seen in a powerful story of how management crushes that very thing.
Update 8-6-16: Arabian Business News reported "President Bill Clinton was paid $500,000 by GEMS Education in 2011, $1.25 million in 2012, $1.75 million in 2013 and $2.125 million in 2014, amounting to a total of $5.625 million to date. The Intercept reported Blackstone sponsored an invitation only reception the final night of the Democratic National Convention in Philadelphia. Blackstone COO Hamilton "Tony" James held a fundraiser for Hillary Clinton in his home.
Carlyle Affiliate Writes EPIC Panda Insurance
AJC.com reported:
House insurance, car insurance — now there’s panda insurance too.
Last month Zoo Atlanta took out a policy on their quartet of fuzzy bears: mom and pop pandas Lun Lun and Yang Yang and their twins, Mei Huan and Mei Lun.
The policy, with San Francisco insurer Edgewood Partners Insurance Center (EPIC), protects against theft and loss in Atlanta and during transit between the U.S. and China.
Private equity underwriters (PEU) tout their strategic, long-term thinking. Did Mr. Rubenstein fund panda fertility in order to create demand for an innovative product, panda insurance? Here's a timeline:
December 19, 2011 - Rubenstein donated $4.5 million to National Zoo panda program
November 14, 2013 - Carlyle announced investment in leading insurance broker EPIC
January 9, 2014 - Carlyle added Atlanta's McCart Group to EPIC creating a national insurance broker
March 11, 2015 - EPIC issued a press release on its new product offering
EPIC Insurance Brokers and Consultants announced that it has added Panda Mortality and Transit Insurance to a growing list of specialty risk management products and consulting services that the national firm provides.
Carlyle's insurance footprint is intended to be national:
Since The Carlyle Group became the firm’s major investment partner in December 2013, EPIC has completed six strategic acquisitions/purchases, adding nearly 300 employees in 12 new locations across the United States.
That's strategic, long term thinking for an insurance firm announcing Panda-Monium. Think of how far the PEU mind can take this. Does the policy provide for replacement pandas? Carlyle Group co-founder David Rubenstein has inside connections for new baby pandas.
Going one step further, pandas work for free. They have little interest in sex, thus pandas can focus on job tasks. They have no wages, health insurance or pensions. They eat healthy and don't smoke or drink alcohol. That's the kind of employee PEUs love. How far can Carlyle take its panda profit center?
Saturday, March 14, 2015
Senator Lindsey Graham's Virgin E-mailing Mouse
Washington's Blog reported:
Lindsey Graham – a member of the powerful Senate Subcommittee on Privacy, Technology and the Law – admitted Sunday that he has never sent an email in his entire life.
Bob Wenzel at Economic Policy Journal educated us on this practice five years ago:
The power elite don't use email, or at least an email account you are going to be aware of.
NYT published today a Deborah Solomon interview with former Bear Stearns chairman Ace Greenberg. At one point the interview goes like this:Solomon: Do you e-mail your clients?This is really a common situation with the power elite, and just plain super-rich.
Greenberg: No. I never use e-mail. The girls use the e-mail.
It's been publicly reported that billionaires Phil Anschutz, developer of L.A. Live, and Warren Buffett don't use email. Like Greenberg,all emails go through a secretary.
In a private conversation, Council of Foreign Relations chairman Bob Rubin told me that all his emails go through his secretary.
These guys simply have too much to lose to have emails coming or going directly, so they build a wall between their emails with a secretary.
It's only the rest of us schmucks that can't afford to have a secretary read us our emails while we lounge and eat grapes, who are going to get nailed by the government for something we wrote in an email. For Greenberg, Anschutz, Buffett and Rubin when the government comes to ask about their email accounts, they just answer, "Don't have one. The girls use the email."
Hillary Clinton is a girl who ignored her obligation to archive communications made while Secretary of State. Rules don't apply to the Grahams, Clintons or Bushes. They make and arbitrarily apply rules to their favor.
Senator Lindsey Graham will be handsomely rewarded by defense and homeland security contractors, as well as private equity underwriters and Wall Street, for his service to the billionaire class while in office.
Carlyle Group co-founder David Rubenstein received a technology award for owning a company that enabled e-mailing from planes.
I'm sure Senator Graham and PEU Bob Rubin are appreciative of the girls who email from their private jets. Do the ladies launder, cook and clean as well?
Easy Money Economy Begins & Ends with PEU
If companies can't obtain junk debt financing through traditional sources with virtually no covenants, private equity underwriters (PEU) stand ready with mountains of cash to "help out." Here's the irony: PEUs loaded up affiliates with junk debt, often to line their pockets with borrowed dividends.
Now they want to provide financing to those who don't meet Wall Streets paltry standards? Hardly, PEUs want to take over companies by owning debt, not equity which disappears when a company declares bankruptcy. Notice that The Carlyle Group's CLO Funds will invest in senior secured bank loans. That's the lever for a backdoor takeover.
Friday, March 13, 2015
Kleiner Perkins Caulfield & Byers: PEUtocracy
High finance has highs and lows. One such drama is playing out in court. Blue Al Gore and Red Colin Powell's serve as advisors to investment firm Kleiner-Perkins-Caulfied-Byers. NYT described the company:
"as a place where, whatever its undoubted excellence, the loudest people win, the most aggressive win, and those who can find a mentor by sucking up win. This does not sound like a family, a meritocracy or even a place that is a successful investor over the long term."
"The key thing was to be a little more self-centered and a little more willing to hype yourself."
Greed, image, hype, these are signature features of private equity underwriters (PEU) and the billionaire investor class. Kleiner Perkins broadened its bipartisan side, investing in Alien Vault which has General Peter Pace as a board member.
Politicians Red and Blue love PEU. It looks like America's Royal Family Presidential fight in 2016 will feature two PEU politicians, Hillary Clinton vs. Jeb Bush. They clearly are a little more self-centered and willing to hype themselves.
Tuesday, March 10, 2015
Blackstone's Fantastic News
Two news stories featured Blackstone, the giant private equity underwriter (PEU) founded by Stephen Schwarzman and Pete Peterson. The first involved a Blackstone Senior Managing Director in their private equity unit. FinAlternatives reported:
Anjan Mukherjee has left Blackstone and joined the U.S. Treasury Department as counselor to the secretary and deputy assistant secretary for financial institutions.Mukherjee appears to be both a political and financial animal:
In his new role, Mukherjee will advise Treasury Secretary Jack Lew. In a memo to employees, Blackstone CEO Stephen Schwarzman said that Mukherjee was “a core member of the private-equity team. ”
Following several roles at Morgan Stanley, he joined the Department of Education during the Clinton administration. He joined Blackstone in 2001, but also worked in the transition team of President Barack Obama, where he focused on economics and international trade matters.What might a PEU do for the Blue Treasury team? Help his former boss get richer while raising political money from his PEU brethren for the Blue team. How might Mukjerjee
...make Blackstone's Stephen Schwarzman the first leader of a public company to be paid more than $1 billion in a single year.
I have faith our elected and appointed officials can optimize billionaire pay. Politicians Red and Blue love PEU.
Monday, March 9, 2015
Varo Energy Fails "Know Your Sponsor"
The Carlyle Group's Varo Energy failed to utilize its sponsor's correct logo on the company's website. Instead Varo used the logo of a defunct executive recruiting firm. It's an odd error within a PEU intent on maintaining its image at all costs. Maybe it's disinformation for the Russians, whose energy products Carlyle hopes to supplant in Europe.
Sunday, March 8, 2015
Clinton E-mail Staffers Now PEUs
The DailyMail reported:
The Clintonemail.com domain name was originally registered to Bill Clinton confidante Eric Hothem, the Times discovered.
Hothem is the same aide who was charged with packing up and carting off furniturefrom the White House at the end of Bill Clinton's presidency that he said was 'Clinton’s personal property.' The furnishings were later determined to be government property, however, and the Clintons were required to pay $86,000 in restitution for the items they kept. Others, they had to return.
Hothem now works in finance (for J.P. Morgan Securities) in Washington, D.C., and another former Clinton staffer's name is on the server registration - Justin Cooper. It is set to expire in 2017, when Hillary Clinton would theoretically take office if she were to compete for and win the presidency next year.
Cooper has also since left the employment of the Clintons for Teneo Holdings, a firm managed by a former Bill Clinton adviser Douglas Band.
What are the odds two ex-public servants would end up working for Wall Street or private equity? Pretty high, actually.
It's time for the shady Clintons to come clean yet again. They won't. Rest assured a lackey will take the fall and in time, their rewards will be great.
Water Charges Garner Ire of Ireland
The long suffering Irish may finally rise up over water. NYT reported:
Since the banking crash of 2008, they have borne big tax increases, severe cuts in public services, mass unemployment and the large-scale emigration of their children. A 2012 study by the International Monetary Fund found that Ireland was in the “undesirable position” of owning “the costliest banking crisis in advanced economies since at least the Great Depression.” And it was “still ongoing,” imposing a huge public debt and dire fiscal costs on Irish citizens.
Irish citizens are angry about having to pay for that which Mother Nature provides for free. BBC Newsreported:
Raising money from water charges was a condition imposed on Ireland by the EU-IMF-ECB troika as part of the country's bailout in 2010 following economic collapse.
Should charging citizens for water involve the very same practices that contributed to the financial crisis? Irish Times reported:
The Government has not been helped by Irish Water itself, an entity which seems to have gone out of its way to demonstrate that the lessons of the banking crisis have not been learned.See if this sounds familiar (Irish Examiner):
Finance Minister Michael Noonan has admitted that €490m meant for local services is to be diverted into Irish Water.It harkens Lehman Brothers after the crash, where executives got massive bonuses for driving their company into the ground and rhe Fed provided $138 billion in loans. The financial crisis has a direct link to the Irish having their dander up over water (NYT):
Nearly 300 staff at Irish Water are entitled to bonuses of some €2.1m. Mr Martin said Irish Water was like a “secret service” until facts began to trickle out during the row over the €180m start-up costs, almost half of which will go on outside consultants.
“The Taoiseach’s spokesman said the same, namely, that no bonuses would be paid. We then learned, yes, bonuses will be paid, that the Government approved the payment of bonuses, and that the Economic Management Council approved the structure of the establishment of Irish Water as a subsidiary of Bord Gáis, resulting in the reality of bonuses being paid.”
How much did international bondholders, including Goldman Sachs, Barclays, Credit Suisse, HSBC, BNP Parnibas and others, benefit? ECB President Mario Draghi stated in a letter dated February 17, 2015:There is a deep sense of injustice at being turned into one of the most indebted nations on earth in order to rescue international bondholders who gambled on rogue Irish banks. There is the way the pain has been inflicted most deeply on the poorest people — the last four government budgets have been regressive, hitting those on the lowest incomes hardest. There is the bitterness of yet again having to export the country’s greatest asset: its talented, highly educated young people.Above all, there’s the gap between the Irish story and the Irish experience. The story is upbeat — austerity works. The experience is rather different.
With proposals to gain in the region of €1.75 billion from burden-sharing with these bondholders, the ECB’s opinion was, and still is, that such gains were insufficient to warrant the risk of the unknown and unquantified costs of burden-sharing at a critical juncture in the Irish macroeconomic adjustment programme, given that the pillar banks had just been recapitalised and the system was being stabilised.So bankers behaved badly and that same group, as holders of other banks notes, needed to be bailed out. Irish people likely don't want to pay the price that bad actors never paid.
The stories of Lehman and Bear Stearns will undoubtedly remain in the annals of financial disaster for many years to come. To understand what has happened, and what lessons should be drawn, it is important to get the facts right. In contrast to what has been commonly assumed thus far, the top executives of those two firms were not financially devastated by their management of the firms during 2000-2008. They were able to cash out rather large amounts of performance-based compensation, both from bonuses and from share sale, during the years preceding the firms’ collapse. This cashed-out performance-based compensation was large enough to make up the losses on the executives’ initial holdings in the beginning of the period. As a result, the executives’ net payoffs from their leadership of the firm during 2000-2008 were decidedly positive.There is gold at the bottom of an Irish rainbow. It's the trickling water, which financial powers (who screwed things up to begin with) want monetized. I can see why the Irish are angry.
Update 3-22-15: Over 80,000 Irish citizens protested new water charges in Dublin.
Burning Oil Train's Destination: Carlyle Group Refinery
Bloomberg reported:
A BNSF Railway Co. train carrying Bakken oil for Mercuria Energy Group Ltd. continued to burn in rural Illinois two days after it jumped the tracks. Five of the BNSF train’s 105 cars remained on fire after Thursday’s derailment.
Twenty-one of the train’s 105 cars, which include two sand cars as buffers, jumped the tracks Thursday afternoon near Galena, Illinois, about 160 miles west of Chicago. The U.S. Department of Transportation said 14 cars were in a pileup and half of those were punctured. Emergency responders evacuated a 1-mile radius, which contained six homes.
From here we launch into the arena of high finance. Consider the hauler, owned by Warren Buffett.
“An initial pool fire occurred that we believe impacted five rail cars and that fire continues to burn,” BNSF, a unit of Warren Buffett’s Berkshire Hathaway Inc., said Friday in a statement about the Illinois crash. “Local, state and BNSF Railway emergency personnel are on the scene working to contain the incident.”Local and state emergency personnel are generally taxpayer funded. Recall how much America's billionaires hate paying taxes.
The next layer of finance is a Mediterranean commodity trader operating from Switzerland.
Mercuria, a Cyprus-based commodity trader, owns the crude and was working with the railway to investigate the accident, Matt J. Lauer, a Mercuria spokesman, said by telephone from Geneva. The oil was loaded at Bakken Oil Express LLC’s terminal in Eland, North Dakota, Joe Shotwell, operations director at the complex, said by phone on Friday.Mercuria. which "is registered in Cyprus and has its main trading operations in Geneva", took over J.P. Morgan's commodities unit in October 2014. What started as an announced $3.5 billion deal shrunk to $800 million by execution.
Mercuria was shipping the oil to Philadelphia Energy Solutions LLC’s refinery in Philadelphia, a person familiar with the situation said, while asking not to be identified because the information isn’t public. The company will work to fulfill the plant’s order with alternative supplies, the person said.
The Carlyle Group owns Philadelphia Energy Solutions, which until recently employed J.P. Morgan's commodities unit for trading, inventory handling and logistics. Carlyle contracted with Bank of America for working capital financing and hedging of price risk. Carlyle's PES took over its own logistics and trading. It will be happy to take Mercuria's alternative supplies.
Philadelphia Energy Solutions recently expanded its ability to accept 280,000 oil barrels per day by train. That's 400 train cars a day, 146,000 per year. PES IPO filing states:
Logistics has operated a crude oil rail unloading terminal with the capacity to unload four crude unit trains per day, or 280,000 bpd (the "North Yard terminal"), which provides certain logistics services to Refining. The North Yard terminal is located adjacent to the Philadelphia refining complex and is the East Coast's largest crude oil rail unloading terminal. The separation of our business into the refining and logistics segments provides flexibility in how we allocate capital and access capital markets, in order to balance the growth of our businesses and the return of capital to our stockholders. We intend to explore growth opportunities in both of our segments, either organically or through third-party acquisitions. These growth opportunities could include investments either upstream, downstream or within our current operations, including opportunities at the Philadelphia refining complex. Following this initial public offering, and subject to market conditions, in order to grow our logistics segment, we intend to explore an initial public offering of a growth oriented master limited partnership ("MLP") that owns a substantial portion of our logistics segment and that will be focused solely on providing logistics services to Refining and third parties (the "Logistics IPO").
"Intend to explore an IPO"? It's well beyond that for PES Logisitcs. Carlyle filed for a PES Logisitics IPO on 9-22-14 and has updated the filing twice since. The refinery filing came on 2-17-15.
Despite the language stated above, which implies an investor might get part of the logistics segment, Carlyle is actively pursuing IPOs for both divisions.
MLPs, like private equity underwriters (PEU), pay preferred tax rates. First responders, be sure to remember Berkshire's Warren Buffet and Carlyle's David Rubenstein the next time a derailed oil car ignites into a fireball. This is but one face of PEU profits over people.
Friday, March 6, 2015
PEUs Feel Surge in Asset Prices: Time to Cheat?
The Sydney Morning Herald reported:
Private equity executives have identified surging asset prices as one of the biggest challenges confronting the industry in 2015, particularly as competition for assets remains fierce and globally firms have $US1.2 trillion ($1.5 trillion) in funds to deploy.This harkens back to the frothy days before the 2008 crash when private equity underwriters (PEU) colluded to reign in the very same surging asset prices.
6-12-14: Goldman, Bain Settle Private Equity Club Deal Lawsuit ($121 million combined) 7-11-14: Silver Lake The Latest To Settle LBO Suit With $30M Deal ($29.5 million)
8-07-14: K.K.R., Blackstone and TPG Private Equity Firms Agree to Settle Lawsuit on Collusion ($325 million)
9-08-14: Carlyle Deal Concludes a Lawsuit Against Private Equity ($115 million)
The settlement totaled $590/5 million. Carlyle passed the lawsuit costs onto investors, its limited partners. PEU founders cheated and passed the costs onto customers.
Rest assured any future collaboration will take place under the protection of Chatham House rules, whether it be in Davos, at Bilderberg or any SuperReturn conferences. E-mail will not be used.
Despite earlier predictions surveillance will not be employed on the ruling class. Technology will provide protection for the collusion class. The reason: PEU political sponsors need funding and post public service employment
Wednesday, March 4, 2015
Carlyle Needs Oil Bottom for Backdoor Takeovers
CNBC interviewed Carlyle Grooup co-founder David Rubenstein on oil patch investments. Yahoo Finance reported:
Carlyle Group's David Rubenstein told CNBC on Tuesday he is not waiting for oil to hit a bottom before investing in beaten-up energy companies.Ask Brinton's founding family how that backdoor takeover went. If oil companies conduct prepackaged bankruptcies with debt holders Carlyle must be at the table. That means buying debt before the bottom, the triggering event that gives Carlyle the chance to pounce.
"The great fortunes are usually made when prices are low. They're not usually made when you buy at the top and think they'll get higher," he said in a "Squawk Box" interview. "Prices are very low in energy, and a lot of people are scrambling, and that's where you make a lot of money."
Rubenstein has called distressed debt the single greatest new energy opportunity to invest," saying investors can by debt cheap and potentially take control of companies.
Tuesday, March 3, 2015
Petraeus Remains Free to PEU
ABC News reported:
Decorated war veteran and former CIA director David Petraeus has entered into an agreement with federal prosecutors in which he would plead guilty to a misdemeanor charge for mishandling classified information.The charge, unauthorized removal and retention of classified material, stems, in part, from documents the former director allegedly provided to his mistress.
The misdemeanor charge follows his words of contrition:
In addition, in a private letter to a friend two weeks after his (CIA Director) resignation, Petraeus wrote: “I screwed up royally. ... I paid the price, appropriately.”
He's paid virtually no legal price, just as his private equity underwriter (PEU) employer KKR pays virtually no taxes. They are free to PEU together, thanks to President Obama's "Just Us" Department.
Update 4-23-15: As expected Petraeus got off easy with two years probation and a $100,000 fine. His leaks were to inflate his ego and help his concubine. There were no higher ideals or desire to unearth injustice. That's exactly what we have, injustice.
Update 4-23-15: As expected Petraeus got off easy with two years probation and a $100,000 fine. His leaks were to inflate his ego and help his concubine. There were no higher ideals or desire to unearth injustice. That's exactly what we have, injustice.
Sunday, March 1, 2015
Ex-PEU Semiconducter Deal: NXP to Buy Freescale
NXP Semiconductors NV agreed on Sunday to acquire Freescale Semiconductor Ltd. in a combination that would create a chip giant with combined revenue of more than $10 billion.
Private equity underwriters (PEU's) did leveraged buyouts on the two firms in 2006. This was the period when PEU's did club deals to keep buyout prices down. All the private equity firms charged in the collusion case settled out of court for nearly $600 million.
After years of paying annual management fees and dividends to their PEU owners each company went public, NXP in 2010 and Freescale in 2011. NXP's buyout of Freescale will be Carlyle and company's last chance for profit as PEU's hold 64% of Freescale's equity.
Robber Barons Game Tax Structure
Blackstone co-founder Steve Schwarzman took home five hundredths of one percent of his compensation in salary. The rest of his $690 million in 2014 earnings is taxed at preferred, i.e. lower rates than salary. Congress had eight years to reign in such obscenities, but instead catered to the PEU crowd.
No comments:
Post a Comment
Comments always welcome!