Saturday, June 30, 2012

Carlyle Group's New Life Force

A Carlyle Group press release stated:

The Carlyle Group today announced it has signed a definitive agreement to purchase a majority stake in Light Force SpA, owner of Italian womenswear brand Twin Set Simona Barbieri, from founders Tiziano Sgarbi and Simona Barbieri and Italian-based growth capital fund DGPA Capital. Integral to the transaction, Carlyle has formed a partnership with Mr Tiziano Sgarbi and Mrs Simona Barbieri to develop and grow the Twin-Set brand.
Like Scalina, Carlyle's Brazilian affiliate, Twin Set Simona Barbieri sells lingerie.  Twin-Set also has beachwear, jeans, and girls clothing.

Light Force is headquartered in Carpi (Modena, Italy) and, with approximately 300 employees, is one of the fastest growing Italian companies in the womenswear “accessible luxury” sector. 
Other brands using the "accessible luxury" moniker include Banana Republic and Paule KA, which is owned by Change Capital Partners. 

Twin-Set news highlighted placement of their bikinis with Bikinis.com:



Expansion is ahead...

Update 7-19-14:  Carlyle will suck dividends from Twin Set.

Update 4-15-17:  Carlyle now owns 100% of Twin-Set and founder Simona Barbieri is no longer the company's creative director. 

Carlyle's "Seminole Project": Tax Supported

The Carlyle Group, with over $159 billion in assets under management, will develop Catalyst, a mixed-use development near Florida State University, alongside Chance Partners LLC and the Community Redevelopment Agency of the City of Tallahassee.  MarketWatch reported:

The Community Redevelopment Agency will make a significant contribution to the Project   

The press release did not state the amount of public money going into Carlyle's coffers.  Tallahassee contributed $450,000 to a Marriott Residence Inn in 2006 and nearly $500,000 to another mixed-use development along with 30 parking spaces.  How much did Carlyle get in "significant contributions" for a $25 million project?



One might expect that information to be public.  It's not.

Update 7-2-12:  Another news piece on the subject made no mention of this significant contribution or its exact size.

Friday, June 29, 2012

Health Insurance Premiums Ruled a Tax

Given the Supreme Court ruling that dollars paid to a private company is a tax, what would happen if I claimed the full amount of my health insurance premiums as tax paid in a calendar year? Will TurboTax allow me to attach the Court's decision to my filing? 

Sunday, June 24, 2012

McDonnell's Teachable Moment on UVA's Presidency


The saying goes "you can't unring a bell," however one always has the option to ring it again, if it's not stolen or destroyed.  The University of Virginia Board of Visitors hired Dr. Teresa Sullivan, before it effectively fired her.  The Board meets Tuesday to put this issue to rest.  Will the Board, minus one Vice Rector Mark Kington, make the same decision, this time with a forma vote?

Virginia Governor Bob McDonnell turned strict father by telling the board to do it right Tuesday or they'll all be fired.  McDonnell's office was clearly in the loop on Sullivan's resignation, as evidenced by the Governor's June 10 press release.

Which McDonnell will come to fore in the coming week, the one with effusive praise for Sulivan?

"(Sullivan) has fulfilled her duties with honor, energy and good stewardship. In addition, President Sullivan has been a great partner with our Administration in our efforts to increase access and affordability at Virginia’s colleges and universities. Through her leadership, Virginia added nearly 1,000 new student slots and recently enacted the lowest yearly tuition increase in over a decade."

Or the McDonnell who believed a more "right individual" exists to lead Mr. Jefferson's University?. 

"I have great confidence that the Board of Visitors will conduct a thorough and diligent search for the next President of the University and will find the right individual for this prestigious and pivotal post." 

UVA's designated Interim President Carl Zeithaml is on hold until Tuesday's board meeting.  Zeithaml proposed this situation be a teachable moment.  I don't recall many teachable moments with clear rectification.  They seem to be more "It's over, let's talk about it and move on."

The last public teachable moment got a black man and a police officer a beer with President Obama at the White House.


What might Governor McDonnell offer to Rector Helen Dragas and President Sullivan?  I suggest McDonnell dig into Virginia history and offer a peace pipe and smallpox blanket.  The question is who gets which?

Update 6-27-12:  Dr. Teresa Sullivan got the peace pipe and reinstatement as UVA's President

Forbes: China to Buy More U.S. Companies

Forbes reported:

China is coming to town. Like Japan in the 1980s, China will be the big Asian investor buying up pieces of America’s landscape, natural resources and companies.  It’s a good thing.

Over the weekend a U.S. Commerce Department official said during a conference in Nanjing that China investment in the U.S. was set to double.
The U.S.-China Cities Forum on Economic Cooperation and Investment began June 22 in Nanjing, China. Here's how the event was billed:

The two-day forum is co-organized by the US Department of the Treasury, US Department of Commerce, US Conference of Mayors, US-China Business Council, American Chamber of Commerce in China, and comparable Chinese governmental entities.  The conference will focus on economic partnership at the local level and explore ways for city-level government to assist in the expansion of economic cooperation and investment opportunities between the United States and China. 
City level government often has funds for small to medium enterprises, something important to corporate owners and investors.

What's driving China to invest in the U.S.?  China's foreign minister stated in The China Daily::

The Chinese government wants to develop industries with comparative advantages, while the US government hopes to expand its exports and revitalize the manufacturing industry, which allows much room for bilateral cooperation.
How might China use any U.S, investments for comparative advantage, their clearly stated aim?

The 2011 conference was held in Chicago.  The U.S. hosted version has the agenda and six audio recordings from the event.

Later in 2011 Carlyle Group co-founder David Rubenstein advised China to invest in the U.S.  Rubenstein's earlier predication had China becoming the largest private equity underwriter (PEU) in the world.  Carlyle recently announced the sale of AMC Entertainment to a Chinese firm.  That came after a Chinese bank refinanced Carlyle's New York property 650 Madison Avenue.

At the 2012 World Economic Forum in Davos, Carlyle's Rubenstein expressed his preference for the Chinese totalitarian model of central planning.  Rubenstein offered a dark vision for those not adhering to his advice.

"Our children are going to have and our grandchildren are going to have" a lower quality of life and a less affluent lifestyle than we enjoy today
In many ways PEU Rubenstein already made his vision a reality.  Take United Components (UCI) which Carlyle owned from 2004 to 2010.

When Carlyle purchased UCI it had no Chinese subsidiaries.  By 2010 UCI had thirteen subsidiaries in China or Hong Kong.  The number of employees fell from 6,900 to 4,350.  Carlyle pulled $35.3 million from UCI via a special dividend in 2007.   Add their $2 million annual management fee and the total rises to $47.3 million.  How many jobs did Conway send to China outside UCI?
UCI's is but one story of American jobs going overseas   This drives the current efforts to revitalize U.S. manufacturing, two of which are Renewing America (Council on Foreign Relations) and SelectUSA (U.S. Department of Commerce).   
The China Daily clarified who would provide incentives:

Unlike China, where incentive programs for foreign investors are mainly initiated by the central government, it is central and local authorities in the US who are responsible for drafting these policies.
The U.S. government and cities have the money and authority to lure Chinese investment.  I've not read about Chinese incentive programs where the government paid foreign investors, only the opposite.  Foreign investors need to pony up for the right to do business in China.

Returning to the UCI example, will U.S. backed Chinese firms get federal and local money for bringing jobs back?  UCI's Chinese subsidiaries are the right size, according to Steve Olson, SelectUSA's Executive Director.

The US welcomes more small- and medium-sized enterprises as well as entrepreneurial investors from the world's second-largest economy (China). 
Many small and medium sized enterprises are owned by private equity underwriters (PEUs).  Ubiquitous global PEUs are offered as the tonic to all ills.  SelectUSA's website highlighted various American industries and how interested parties could pursue incentives.  The section on Financial Services makes no mention of private equity.  Yet clearly, federal and local incentives will go to private equity affiliates, which will help the rich grow richer.  It happened in Texas under The Carlyle Group's ownership of Vought Aircraft Industries.  To think my tax money could benefit China owned PEU affiliates?  I find that singularly distasteful. 

China, with its abysmal quality, is coming.  Here's the rationale from one Carlyle executive, Managing Director David Marchick::

“Chinese investment would promote new economic activity and expose Chinese companies to Western standards of corporate governance, reporting, and accounting.”
Marchick was silent on Carlyle affiliate China Forestry, when it could only account for 1% of booked sales. 

PEU China, greedy, controlling and heavy handed,  will invest in the U.S. to its sole advantage.  China understands economics as an element of warfare.  Carlyle Group executives know this.  When greed is the prime motivation and government is but a tool, anything goes.

What happens when PEUs are ready to liquefy their small to medium sized Chinese firms doing business in the U.S.?  Will they crowdfund?  What information will be available to protect potential investors?

China imported a financial Wild West.  It stands ready to export it back to the U.S. Buyer beware.

Saturday, June 23, 2012

UVA's Presidential Business

Near the end of my call home for Father's Day my father said, "Something's going on at UVA.  They fired the President.  You should check it out."  I avoided his advice until yesterday  My cursory review concluded the conflict to be the result of PEU/corporate memes being imposed by University Board members.  PEU is my abbreviation for private equity underwriters, whose memes include:

The belief that programs should pay their way from tuition/fees and be self sustaining (there is no intrinsic knowledge worth preserving through social/economic cycles).  

The drive to the lowest common denominator on costs, usually headcount and/or worker pay/benefits  (executive pay and political donations are exempt from this drive).

The unending demand to do more with less (based on whim, not on an understanding Dr. Deming's teaching). 

The notion that people are like rats and pigeons and must be extrinsically motivated to do a good job (If I am greedy, then you must be too, only extrinsic motivators cause great harm in organizations).  

After reviewing e-mails between UVA's Rector Helen Dragas and Vice Rector Mark Kingston, it appears the pair micro managed University President Teresa Sullivan, at least in the facility arena.  The e-mails start with both Board members wanting to drive down the cost of historical building renovation to condo construction or home renovation levels.  They shift to hiring a public relations firm and efforts to sell the firing.

Rector Dragas is President and CEO of a real estate development corporation in Virginia Beach, while Vice Rector Kington is Managing Director for X-10 Capital Management LLC, a "long-short hedge fund."  Kington is also President of Kington Management Corporation and a former PEU Managing Partner for Columbia Capital LLC.  In the small world of corporate boards, Dragos and Kington serve on the board of Dominion Resources. 

The insular corporate/PEU world has founders and partners querying affiliates outside the public eye.  There would be zero chance of involving legislators or garnering access to e-mails.  Teresa Sullivan had the fortune to work for Thomas Jefferson's University, steeped in tradition and a certain nobleness.

UVA's Faculty Senate stated in a letter to  the Board:

“We believe that this abrupt and, from our point of view, opaque decision will deeply threaten the way UVA is perceived by prospective as well as current faculty, students, and donors.  We strongly urge the Board of Visitors to reopen discussion with President Sullivan and the faculty.”
Politicians hate to be made the fool by people they appointed.  Vice Rector Kington resigned quickly, even though he was in line for the top spot.  Rector Dragas' train continues to wreck.  Will the PR firm find a way through the maze?

Governor Bob McDonnell charged the board with a final answer on Tuesday  My father, a former MCV faculty member, predicted Dr. Sullivan will be reinstated this week. I'm not so sure. Nevertheless, the stakes are sufficiently raised.

Update 6-24-12:   Some 1,500 people rallied on the Lawn in support of President Sullivan. 

UVA's PEU Presidency



The controversy surrounding the University of Virginia's Board of Visitors' firing of President Teresa Sullivan is founded in management theory.  Sullivan's differed from the Board.  News reports shared the Board's displeasure with Sullivan's failure to eliminate low volume programs and layers of educators and staff.  For being "incremental" in her approach, President Sullivan lost her job.  She was effectively fired by the Board.

UVA's Board appointed McIntire School of Commerce head Dr. Carl Zeithaml as Interim President.  Disclosure:  I graduated from UVA with a B.S. in Commerce in 1980.  Fortunately, it was prior to private equity's evolution from leveraged buyout organizations (LBOs).  However, a more refined name (than LBO) did not eliminate greed as the central core.

McIntire embraced alternative assets and private equity underwriters (PEUs).  PEU is my pet name for the greed and leverage boys, hence the name of this blog.  Under Zeithaml's leadership UVA's undergraduate business school implemented a tuition premium, i.e. massively higher fees to obtain the coveted McIntire degree.  I like to think of McIntire's "differential tuition" as a PEU education management fee. 

Back to the ouster of Dr. Sullivan, which outraged professors, alumni and the public   Resignations flew from high profile professors, the Board, and alumni donors.  The Associated Press stated:

"Zeithaml said he is suspending negotiations for his takeover as University President until the Board of Visitors meets next week."

"Suspending takeover negotiations," it doesn't get more explicit than that.  Dr. W. Edwards Deming, the legendary management guru, taught:

"Quality starts in the board room."  

Dr. Deming continued to learn until his death in 1993.  In his final years he stressed transformation of management using his system of profound knowledge.  Deming decried LBO's (and their eventual PEU brethren) as harmful to constancy of purpose.  PEUs employ financial machinations like "optimizing capital structure" (loading up debt) and "liquidity recapitalizations" (bleeding cash via debt-financed special dividends).  They also rob resources with annual management fees. 

Near the end of his life, Deming said "It comes down to one thing, the human spirit."  Many of today's management practices crush the human spirit with an over reliance on extrinsic motivators and obsession with outcome targets.  "Meet the numbers or we'll find someone who will" is a common management threat.  This is the essential message from the Board of Visitors to President Sullivan.   .

The human spirit remained alive at Mr. Jefferson's University, as people sought information on what happened and why.  The Board didn't take a full vote on asking for Sullivan to step down.  It hired a public relations firm to manage any blowback.  When governance fires a leader outside the sunlight, how are people in the organization to interpret the act?  How should they behave going forward to avoid a similar fate?  UVA's Board drove in fear, which is deadly for an organization wanting to survive.      . 

"The most important things are unknown and unknowable."--Dr. W. Edwards Deming

What's the cost of a surprise firing of UVA's President?  What's the cost of a school in chaos?.

This decision ultimately rests in Governor Bob McDonnell's hands, given his power of political appointment.  He is the fox guarding Mr. Jefferson's University, only McDonnell has two pups matriculating to UVA.  It should be an interesting week.

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.  

Friday, June 22, 2012

What Krugman Missed on Community Education Centers


NYT columnist Paul Krugman noted governments contacting out functions to corporations with political connections.  Krugman's example is Community Education Centers, a firm running prison halfway houses in New Jersey.   New Jersey Governor Chris Christie once lobbied for Community Education Centers. 

The NYT did a nice job highlighting horror stories and Krugman noted crony capitalism with his: 

"glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation." 

However, both missed the PEU connection.  Private equity firms Primus Capital and LLR Partners invested $53 million in Community Education Centers in 2007.

Primus is based in Cleveland, Ohio, while LLR Partners is in Philadelphia, Pennsylvania.  Fellow PEU Carlyle Group expects 30% annual return on investment.  Does Primus do likewise?

Gov. Christie knows who to cater to and how.  PEUs make rain and fund kings.  Prince Christie could be in line for the top spot in America's Kingdom.

(Thanks to Economic Policy Journal)

Tuesday, June 19, 2012

Nonprofit Health Care vs. Wall Street Securitizations

The business of packaging debt and reselling tranches could remain tax free, while nonprofit, community hospitals become taxable.  The Illinois State Legislature passed a bill specifying levels of charity care for hospitals to remain tax exempt.  Illinois S.B.3261 requires for most nonprofit, community hospitals a:

Charitable discount of 100% of its charges for all medically necessary health care services exceeding $300 in any one inpatient admission or outpatient encounter to any uninsured patient who applies for a discount and has family income of not more than 200% of the federal poverty income guidelines.
That's free care.  How many uninsured people in Illinois are at less than 200% FPL?  Governor Quinn's news piece refers to an unsustainable Medicaid.  That's before PPACA adds another 30 million people to Medicaid rolls.  Might the state shift the cost of low income care further onto hospitals?

Consider what is universally tax free in the U.S., packaging and reselling debt through asset backed securities:.

.... (consider) principal types of asset-backed securities and the ways in which the issuer-level tax problem has been addressed.. In brief, such a tax may be avoided by using an issuer that is considered transparent for tax purposes and allocating its income to holders of ownership interests in the entity, by paying out income in the form of deductible interest on debt, or by moving the issuer offshore.
 Wall Street activities may remain tax exempt while community hospitals pony up.  It's a longtime vision for Senator Chuck Grassley (R-IA).  Who knew two Chicago Democrats would help Chuck's vision become reality.  That includes tax free political 527 plans.  Who benefits from tax free securitizations and political donations?  Might it be Chuck and friends?

Monday, June 18, 2012

Bob Johnson Pushes Black PEU's

Carlyle Group joint venture partner Robert L.Johnson proposed the following measures "to enhance Black businesses and increase Black wealth."

1.  Allow black businesses to be eligible for government set aside contracts if they own 10 percent of a business rather than the existing 51 percent rule due to the 10-to-1 wealth gap; and significantly increase the dollar volume of set aside contracts for Black businesses across all government agencies. 
Private equity loves the security of government business.  It provides a core foundation and the politically connected can grow government contracts dramatically.  That's why ex-politicians and bureaucrats plaster the Senior Advisor ranks of most private equity underwriters (PEUs)

Robert L. Johnson partnered with The Carlyle Group to go after minority owned business.  Johnson's proposed change would increase dramatically the number of "black owned enterprises" eligible to get guaranteed business from Uncle Sam.  It's literally minority owned by minority owner. 
  
2.  Encourage majority-owned businesses to invest in black-owned companies by deferring the taxes on the economic gain similar to the FCC "tax certificate program" which motivated major media companies to sell to minorities. 

PEUs hate taxes and would love to take advantage of this loophole.  Taxes are evil and one loophole is never enough:
3.  Allow African American families earning less than $250,000 annually to defer federal income taxes, without interest, provided tax deferrals are placed into a 401(k) type savings account which can only be drawn out at retirement or upon death at which time the government would be reimbursed for the deferred taxes. The gain on the 401(k) investment would be available to the families at retirement or passed on to future generations. 
While the Treasury is deferring all those taxes, it's expected to back bank loans to private black individuals, which will be securitized by Wall Street, i.e. fee generating..
4.  Create a Treasury-backed fund to securitize short-term borrowing or emergency loans made by minority banks or other lending institutions to Black families provided these loans are marketed and made in a regulated and transparent manner. The securitized loans would encourage banks and lenders to make short-term or emergency borrowing available at reasonable rates and end "payday" lending as we know it today.
Who will keep Wall Street predators at bay? 

5.  Require large banks under the Community Reinvestment Act to fund a nationwide marketing campaign targeted to the Black community with a focus on financial literacy and savings

What about the minority banks making the Treasury backed short term/emergency loans?  Aren't they obligated to educate potential customers? 

How might the founder of Black Entertainment Television be in a unique position to create this "nationwide marketing campaign?"  And what kind of car loan interest rates does RLJ's auto dealerships, partly owned by The Carlyle Group's T.F. "Mack" McLarty,  charge their black clients?

Something is distorted when the PEU model becomes the answer to all of America's ills.  Board room and trading floor greed can't be the answer to everything.

Sunday, June 17, 2012

Asian PEU News



Reuters reported:

CHINA'S NATIONAL Social Security Fund will increase investment in private equity funds by more than 50 percent in 2012 as China attempts to improve investment returns from its pension system, the official Shanghai Securities Journal reported on Monday.
How might private equity help the people?
CHINA'S BIGGEST milk producer by revenue, Inner Mongolia Yili Industrial Group Co, has recalled baby formula tainted with "unusual" levels of mercury in the latest safety scare for the country's dairy sector.

The Carlyle Group invested in Yashili,  a Chinese tainted milk producer.  Carlyle "cleaned up" the melamine and took the company public.  Will a PEU do likewise for Mongolia Yili?

What might Chinese PEUs do for the rest of the world?

THE NEXT wave of private investment in Africa is likely to come from Asian funds, lured by sustained high growth rates and increasing economic and political stability, according to the co-head of one of the continent's top private equity groups.
How might China's "dice roll" quality manifest in their private equity expansion? As for economic stability, one news post raised questions:

BLACKROCK INC said it has received several proposals to buy or help restructure its Australian unlisted property trust which has assets of A$468 million ($464.75 million) but is short of funds to meet redemption demands.

Short of redemption demands?  Do I smell a PEU run? 

Update 6-21-12:  China's longstanding abysmal quality showed up in food.  Carlyle affiliate Oriental Trading imported cadmium tainted children's toys from China. 

Saturday, June 16, 2012

Zoelick Drops Lehman Bomb as He Leaves World Bank


Reuters reported World Bank Chief Robert Zoellick said:

"Europe may be able to muddle through but the risk is rising. There could be a Lehmans moment if things are not properly handled."
Zoellick;s advice to developing countries was:

"It will be better if they can avoid piling up short-term debts that can come due in volatile periods and look to the fundamentals of future growth - infrastructure and human capital," he said.

Financing long term assets with short term debt, combined with risky credit wagers, took down Lehman virtually overnight.  The monied class no longer trusted one another to make good on their debts (or bets).  

Zoellick steps down as World Bank Chief June 30.  The question is whether the global elite ordered another crisis or are helpless to stop the system they created that regularly distorts in excess.

Thursday, June 14, 2012

Co-founders Carlyle Stake

With The Carlyle Group's 306 million fully diluted units, per their latest investor presentation, one can calculate the holdings of Carlyle's three co-founders, David Rubenstein, William Conway, and Daniel D'Aniello.
Each co-founder holds roughly 47 million units, for a combined total of 143 million units.

That's nearly 47% of all Carlyle units.  At current valuations, each co-founder holds over $1 billion worth of Carlyle.

Monday, June 11, 2012

Rubenstein Delivers Buffet Cherry Cokes

Carlyle Group co-founder David Rubenstein loves the art of the get in obtaining speakers for the Economic Club of Washington's 25th Anniversary celebration.  Who knew it would be a contraband supply of Cherry Cokes?  That's what Rubenstein got Warren Buffet for his talk on June 5th, according to WaPo.



The Marriott Wardman Park, which is a Pepsi venue, made a special exception.
Marriot International CEO Arne Sorenson sat at the special head table.   Carlyle's Rubenstein can add another accomplishment to his vaunted resume, able to still the waters of global cola wars.

Sunday, June 10, 2012

Carlyle & Co. Liquefy Kinder Morgan

The Carlyle Group will liquefy a portion of its stake in Kinder Morgan.  Carlyle, Goldman Sachs and Carlyle/Riverstone will sell 63 million shares on Monday, June 11.  Proceeds of $2 billion are expected. 


It's not clear how much in total proceeds Carlyle will get, but it will be between $400 and $835 million.  Add Carlyle's Triumph offering on Tuesday and it could be a billion dollar week.  That should boost Carlyle's economic net income for Q2.

Saturday, June 9, 2012

Perry's Last Chance to Ask Carlyle to Repay


The Carlyle Group will sell its remaining shares in Vought/Triumph next week, according to Bloomberg-BusinessWeek.  The offering of 4.666,166 shares will close Tuesday, pending the arrangement of buyers by Credit Suisse.  Investors are instructed to request a copy of the prospectus from Credit Suisse. 

Public offerings haven't done well recently.  How might Carlyle's third Triumph offering fly? The Carlyle Group sold 5 million shares in November 2011.  Morgan Stanley floated those shares.  That was after a May 2011 offering of 2.5 million shares by Deutsche Bank

Carlyle shares total 12.16 million vs. 7.5 million reported by Bloomberg-BW.

Carlyle received about 7.5 million Triumph shares two years ago for selling Vought Aircraft Industries Inc. to Triumph.

Triumph took on Vought's obligations when it did the deal with Carlyle in 2010.  That included $35 million in Texas Enterprise Grant funds, courtesy of Governor Rick Perry.  Perry executed the deal in 2004.  Vought publicly reneged on their employment promises in 2007.  Despite this clear default Perry renegotiated the Carlyle's Vought deal in early 2010, just in time for the Triumph purchase.

Governor Perry could use his bully pulpit to ask Carlyle's billionaire co-founders to make Texas taxpayers whole, but that's not his style.  Pistolero Perry would rather ask for another 10% cut in the state budget.  It seems Perry's principals override his principles.

Last chance to ask the DBD's to refund Texas taxpayers.  Tuesday's coming and they should have plenty of cash.  Ironically, Vought's remaining TEF obligation is roughly 10% of Carlyle's expected proceeds of $280 million.

Did MF Global Commit Fraud?


Did Jon Corzine's MF Global do more than misuse investor funds in its final days?  The Bankruptcy Trustee's Investigation Report alludes to fraudulent valuations in a graph on page 6 of Annex F.  The graph shows MF Global consistently priced above industry prices for repo and reverse repo transactions:

The body of the report mentions this only in footnote 59 on page 63.

Did MF Global fraudulently value its holdings as it robbed customers?  That may or may not be answered in a court of law.

Ex-President Bill Clinton and  Former Prime Minister Tony Blair can breathe a sigh of relief as Teneo was not mentioned in the MF Global Trustee's investigative report.  Jon Corzine, disastrous gambler or pathological criminal? The press pushed the gambler meme to date. 

Friday, June 8, 2012

PEU's to "Churn On" Says Rubenstein

Dow Jones PENews reported:

Private equity will take its licks during the U.S. presidential race, but the asset class will churn on, Carlyle Group founder David Rubenstein said.

Not only will PEU's churn, they'll bleed, monetize, liquefy, fornicate and suckle on.  PEU ex-President Bill Clinton sees wealth potential everywhere. 

The PEU stench is ubiquitous but will explode in public health care, infrastructure and education.  The Government Corporate Monstrosity ensures it   Churn on....

Wednesday, June 6, 2012

Clinton Sees "Wealth Potential Everywhere"


President Bill Clinton won't criticize Mitt Romney's Bain Capital experience.  That's because Clinton is also a private equity underwriter (PEU).  Clinton started as a advisor for Ron Burkle's Yucaipa and is currently Chairman of Teneo Capital's Advisory Board.  Britain's Tony Blair also advises Teneo.



Clinton won't slam private equity, as he is one.  Also, Clinton's Global Initiative counts on political and corporate heavyweights.  PEU's are ubiquitous across the globe.  President Clinton knows privatization and the politics of fellow back scratching.  That will be on display this week in Chicago, where Mayor Rahm Emanuel pushes his infrastructure bank.  That's one example Clinton offered to Maria Bartiromo during their CNBC interview.

We've got a Democratic mayor of Chicago who's working with all the Republicans in banking and finance there to give America its first urban infrastructure bank, something that used to have bipartisan support in Washington.  
Rahm will show up at Clinton's CGI America.



Chelsea worked for Avenue Capital and sits on IAC's board of directors.  Her annual board compensation is roughly $262,500. 

CGI America starts tomorrow, which helps explain Clinton's handling Romney's PEU background with soft gloves.  The new model of capitalism is colored Red and Blue.  It sees wealth potential everywhere, something not felt by most Americans.

Update 6-7-12:  Mayor Rahm Emanuel has a video out on Tax Increment Fund.  It follows a different video on Chicago's use of TIF's..

Update 6-16-13:  Hillary Clinton's favorite advisor Huma Abedin worked full time for the government and received big bucks consulting for Teneo.  Further evidence of the Government-Corporate Monstrosity.

Update 8-14-13:  The NYT finally noticed the sleaziness of the Clinton corporafornication model.   But they gave it short shrift, so the institutionalization solution could be proffered. 

Update 8-15-16:  ZeroHedge shared Huma Abedin also worked for the Clinton Global Initiative while also a government employee and Teneo consultant.  

Tuesday, June 5, 2012

PEU Reputation Rehab: Romney et al


Private equity framing went into overdrive this week. WaPo ran a number of pieces.  One focused on Carlyle Group co-founder David Rubenstein and his heavyweight business and political connections
"Value Added: David Rubenstein and the art of the ‘get'
Another dealt with the PEU lobbying group
"Romney’s run motivates group to defend private equity’s image 
Forbes reported how Bain co-founder Mitt Romney is a minor player compared to his peers, like Carlyle's Rubenstein::

If the former governor’s goal was to accumulate as much money as possible, he certainly made a huge mistake in calling it quits at the dawn of private equity’s so-called golden age, when buyout funds raised by Bain and its rivals ballooned from the hundreds of millions to the tens of billions. But the more likely scenario is that Romney had a pretty good sense of the momentum the private equity industry had gathered and simply wanted to focus on family, philanthropy and, of course, public life.
Mitt was more valuable to the greed/power boys on the government side of the equation.  It's all about new capitalists shaping our world.  That means PEU...

Update 6-6-12:  President Bill Clinton and Rep. Steny Hoyer professed their PEU love.  

Mitts on Bilderberg


The quadrennial Bilderberg pilgrimage for U.S. Presidential candidates continued with Red Team Mitt Romney's 2012 appearance, according to The Guardian.  Blue hopefuls Barack Obama and Hillary Clinton visited the very hotel in 2008.  Reports show Syrian up next for Western intervention, a la Libya.  Otherwise, Bilderbergers talked of their favorite thing, money.  The greed and power class made private equity underwriters (PEU's) ubiquitous the last decade. Next up, one of two CGI meetings, The Clinton Global Initiative or the Carlyle Group Investors meeting.  Red and Blue love PEU.  Global elites' calendar, anyone?

Sunday, June 3, 2012

Virginia Ports PEU Privatization Resurfaces


FT reported on a new unsolicited proposal submitted to Virginia's Transportation Secretary Sean Connaughton.  The Commonwealth of Virginia considered port privatization prior to Governor Bob MacDonald's election.

The Carlyle Group and Goldman Sachs' Goldman Capital were bidders in 2009.  They are expected to reenter the unsolicited proposal race, which ends July 12.  Virginia Ports could be privately operated as soon as January 1, 2013. That would be a sizable get.

Update 6-21-12:  People in Virginia's port cities are waking up to the privatization scam. Recall infrastructure is where PEUs expect to make 20% annual returns, virtually risk free.  Take Gov. Bob McDonnell's Dulles Toll Road.  "Tolls on the Dulles Toll Road could triple by 2018. Tolls for a one-way trip could jump from $2.25 to $4.50 next year and go up to about $7 by 2018."  It sounds like Chicago Parking.

Saturday, June 2, 2012

Bilderberg Grease: Spooks, Wankers and PEU Bankers


The Guardian cites the Bilderberg Group's CIA and big money roots.  I prefer to focus on more recent stories between Bilderberg's reported attendees.

Two years ago White House OMB Chief Peter Orzsag and BP's Bob Dudley teamed up to vastly underestimate the flow of toxic oil from the Deepwater Horizon blowout.

Former Fannie Mae Senior Executive Tom Donilon served during Fannie's spate of fraudulent accounting, which enriched top executives like Donilon. Will he and Jerry Speyer yuck it up over Tishman-Speyers defaulting on $2 billion in Stuyvesant Town debt held by Fannie Mae and Freddie Mac

The usual list of non-media media types are attending, WaPo's DonaldGraham, softball tosser Charlie Rose, WSJ's Peggy Noonan and FT's Martin Wolf.  Two reporters from The Economist are listed.  I take it their job is push Bilderberg meme's as reporting on the meeting itself is taboo.

I'd love to see Saif Gadhafi crash this party.  What might he say to Lord Mandelson, who worked hand in hand with Tony Blair to get the Lockerbie Bomber released, in return for BP access to Libyan oil.  Saif's attendance is not possible.  The same intelligence people behind Bilderberg likely broke Gadhafi the Younger long ago.

I do get a kick of the private equity underwriters (PEU's) at Bilderberg, many of them ex-politicians.  KKR's Henry Kravis and Red Ken Mehlman (KKR) join Blue James A. Johnson, Jr. (Perseus), Vernon Jordan (Lazard), Roger Altman (Evercore), Bob Rubin (Centerview), Steve Rattner (Willett) and Peter Thiel (Clarium).  The list is surprisingly consistent.

Fran Townsend sits on the board of DRS Technologies, which has a presence.  The Carlyle Group is there by extension, joint venture partner Mustafa Koc.  Fran did Carlyle a huge risk management favor after Hurricane Katrina.  She omitted affiliate LifeCare's 25 patient deaths from the White House Lessons Learned report.  Carlyle closed on LifeCare weeks before Katrina's landfall.

Fry up a big fat, greasy Bilderberger for global power/greed addicts.  How will they rehab the PEU image?  "Private equity capital knowledge executed responsibly" is abbreviated PECKER.

Update 6-4-12:  WaPo ran a number of pro-PEU pieces.  Did Donald Graham deliver a Bilderberg message?  Meanwhile, Bilderberger Charlie Rose interviewed Carlyle's Olivier Sarkozy as part of a series, "New Capitalists Shaping Our World."  It's underwritten exclusively by UBS