Monday, September 22, 2014

Carlyle to Make $225 Million on Park Water


The Carlyle Group is happy to make money off public infrastructure.  Ring the bell for the announced sale of Park Water Company for $327 million in 2015, a mere four years after buying the company for $102 million.  That's a $225 million or 220% gross profit.  The race is on to see who the City of Missoula will try to wrest control of their public water system from, Carlyle or the announced buyer Algonquin Power. 

Carlyle said it would give the City of Missoula first rights to buy Mountain Water, a Park Water subsidiary.  It seems Carlyle used the City to up the price for sale to Algonquin.  That's the role of government today, to ensure private equity underwriters (PEU's) make more ka-ching through direct sales, publicly awarded franchises and now bidding up asset prices at resale.  It's a PEU world, where politicians Red and Blue love PEU. 

Sunday, September 21, 2014

UAE, Carlyle to Host 2nd Africa Business Forum


New Business Ethiopia reported:

Held under the patronage of Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai, the Forum's objective is to facilitate a high-level dialogue and advice on key strategic directives related to Africa's economic outlook.

With Dubai becoming a significant investor across Africa and a base for fast-growing bilateral trade the Forum will exemplify why the Emirate is growing as a hub for African entrepreneurs to access global markets. It will also define why it forms an international investor base for African operations.

This exclusive, invitation-only event will bring together over 500 high-level decision makers.

The list includes African Heads of State, Ministers and dignitaries, prominent CEO's and Directors, and heads of private banks, sovereign wealth funds and private equity underwriters (PEU's).  The Carlyle Group is among the list of expected attendees.

How many centuries has Africa been under the patronage of others?  Is it the UAE's and associated PEU's turn at the helm?

Friday, September 12, 2014

Billionaire Power Player List Lacks Rubenstein


A new list assessing billionaire political power is out and it's missing Carlyle Group co-founder David Rubenstein.  How is #12 Mark Zuckerberg more politically influential than Rubenstein, a man who's call is taken at any time by U.S. Presidents, Cabinet members and Congressional leaders?

Carlyle located their private equity firm in Washington, D.C. precisely for the purpose of exercising political power. After thirty years on the Potomac Carlyle is now so synonymous with dirty political water it cannot be seen.

"Obama had reached out to the business community, they just haven't liked all of his decisions and some of his rhetoric. But generally, I think the administration is quite open and accessible." (David Rubenstein)

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage."
(John Kenneth Galbraith)

"One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.”(Carl Sagan)

It wouldn't do to put David Rubenstein, a PEU and Brookings board member, in a poor light.

Update 9-14-14:  The billionaire list on Naked Capitalism is also missing a Rubenstein.  The Carlyle co-founder is famous for saying, "All I'm doing is I'm filling out my tax returns - or my accountants are, and I'm paying whatever I'm supposed to pay, though I'm giving away a large amount of the money and that probably lowers my tax rate because I'm giving away so much money. But change the law, but don't blame me for the law. I'm not writing the law. I didn't write the law." No, but he lobbied Capital Hill numerous times to keep his preferred carried interest taxation. 

Tuesday, September 9, 2014

Fed Favors PEU Funding of Public Infrastructure


Washington's Blog reported:

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). 
Who has trillions on the sidelines marked for public infrastructure, normally financed by municipal bonds?  Private equity underwriters (PEU's) do.

By disqualifying municipal bonds from the category of liquid assets, the biggest banks are likely to trim back their holdings in munis which could raise the cost or limit the ability for states, counties, cities and school districts to issue muni bonds to build schools, roads, bridges and other infrastructure needs. This is a particularly strange position for a Fed that is worried about subpar economic growth.
It's not strange for a Fed favoring the billionaire PEU class. This would dramatically shift infrastructure funding to the private sector, where PEU's have replaced banks by securitizing huge chunks of corporate debt.

A second stressor is coming for municipalities, GASB requirements for public pension fund accounting.  Government pensions will need to get greater returns to stitch the gargantuan hole in their balance sheets from 2015 pension fund liabilities.  That means rolling the dice on PEU investments.

What if cities could invest public pension funds in PEU's and have the PEU finance their public infrastructure?  The PEU gets 20% annual return on equity and the public gets addicted to external, vulture funding   You get the Fed picture.

Just as human resources became a tool to treat people inhumanely, regulation and accounting have become tools for the greedy and arrogant.  It's a PEU world, where politicians red and blue love PEU.

Sunday, September 7, 2014

Eric Cantor Investment Wanker

Forbes reported:

Moelis & Co., announced on Tuesday that it had landed a high-profile new employee: Former House Majority Leader Eric Cantor. Moelis & Co.’s new vice-chairman and managing director will get a $3.4 million pay package between September and the end of 2015.

Moelis' SEC filing stated that Cantor will become a member of the board of directors. The press release was disturbing as Eric Cantor has been anything but "conflict free."

Virginia voters ousted Eric Cantor because they're sick from what we've become. Cantor's absurd negative ads backfired, making people want to vote against him and his cocky, hyper-competitive, arrogant ways. 

So America, this is the face of globalism.  And we wonder why the world's problems are growing in magnitude?  The Moelis-Cantors have offered the world greed and control by any means (including violence).  However, they do it with discretion:

We believe our discretionary approach to compensation leads to exceptional advice, strong client impact and enhanced internal collaboration.
Moelis will steer a discretionary $3.4 million to Eric Cantor for the next 16 months of work.  How much will Eric get in retirement and other benefits from his years of public service?

Here's a message to people around the globe:  if you see Eric Cantor coming, bar the door.  Don't vote for what he's selling (or any other ex-public, now self servant)..

Congress is less popular than zombies, witches, dog poop, potholes, toenail fungus, hemorrhoids, cockroaches, lice, root canals, colonoscopies, traffic jams, used car salesmen, Genghis Khan, Communism, North Korea, BP during the Gulf Oil Spill, or Nixon during Watergate
Eric Cantor is a key part of American's disgust in Congress.  How far can he drag down the already low regard the public has for Wall Street, investment banks and private equity underwriters (PEU's)?  Yes, when I think of Eric Cantor, dog poop does come to mind.

Monday, September 1, 2014

Carlyle Group: Best of America?


A Carlyle Group press release stated:

Global alternative asset manager The Carlyle Group L.P. (NASDAQ: CG) today announced that its Co-Chief Executive Officer David M. Rubenstein will present at the UBS Best of America’s Conference in London on Thursday, September 11, 2014 at approximately 3:50 PM BST (10:50 AM EDT).

Rubenstein's talk will occur on the thirteenth anniversary of 9-11 and occur roughly twenty minutes after the North Tower collapsed.   President George W. Bush closed U.S. airspace but allowed the Bin Laden family, attending the Carlyle Group annual investor meeting, to leave via private plane. 

When George W. Bush was elected Carlyle had $3.3 billion in assets under management.  Today it is over $203 billion and Carlyle is a global juggernaut.  PEU billionaires reshaped the world for 30% annual returns.  While they won big, others suffered greatly.  Greed and violence can reshape the world, but it brings with it countless victims. 

Carlyle's Image Maintenance Cost $115 Million


The Carlyle Group's signature aim is to control the narrative by "maintaining its good name."  The private equity underwriter (PEU) recently challenged five expert witnesses in the longstanding price-fixing collusion lawsuit brought by investors. 

Law360 reported:

Carlyle moved to strike five expert witnesses that the plaintiffs — a proposed class of shareholders of companies bought out by the private equity firms — said they planned to rely upon at a November antitrust trial in the case.

Carlyle's defense was seemingly based on principle:  Fortune stated:

Carlyle had been holding out largely because its co-founders — David Rubenstein, Dan D’Aniello and William Conway — were said to be personally offended by the notion that they had been involved in an illegal act, and who felt that any settlement would be a tacit admission of wrongdoing.
Tacit admission it is:

The Carlyle Group has agreed to pay $115 million to settle its part in a massive private equity collusion case, Fortune has learned from a source close to the situation.  A Carlyle spokesman declined comment.
How can this be?  Name maintenance.  Since companies are people for the purposes of election funding, they can also be people with damaged psyches.

The implicit goal of any primary narcissist is to maximize their image in each and every present moment.  There is no other criteria.  Anyone looking for core beliefs or fundamental truths will be driven crazy by their ability to say the exact opposite position from five minutes ago and treat you with complete and total disdain for suggesting they said anything otherwise.

A Labor Day weekend news release should help that story sink to the bottom of the news ticker.  Image maintenance achieved!