Wednesday, April 30, 2014

Energy Transfer Partners to Sell Carlyle Group Gasoline to West Texans?


Energy Transfer Partners announced the purchase of Susser Holdings, merging two convenience store and gasoline distribution operations.  Susser is Texas based and has Stripes convenience stores.  ETP is heavy on the East Coast and includes Sunoco.

On October 5, 2012, ETP completed its merger with Sunoco. On September 8, 2012, Sunoco completed the exit from its Northeast refining operations by contributing the refining assets at its Philadelphia refinery and various commercial contracts to PES, a joint venture with The Carlyle Group. Sunoco also permanently idled the main refining processing units at its Marcus Hook refinery in June 2012. The Marcus Hook facility continued to support operations at the Philadelphia refinery prior to commencement of the PES joint venture. Under the terms of the joint venture agreement, The Carlyle Group contributed cash in exchange for a controlling interest in PES. In exchange for contributing its Philadelphia refinery assets and various commercial contracts to the joint venture, Sunoco retained an approximate 33% non-operating noncontrolling interest. The fair value of Sunoco’s retained interest in PES, which was $75 million on the date on which the joint venture was formed, was determined based on the equity contributions of The Carlyle Group. Sunoco has indemnified PES for environmental liabilities related to the Philadelphia refinery that arose from the operation of such assets prior the formation of the joint venture. The Carlyle Group will oversee day-to-day operations of PES and the refinery. JPMorgan Chase will provide working capital financing to PES in the form of an asset-backed loan, supply crude oil and other feedstocks to the refinery at the time of processing and purchase certain blendstocks and all finished refined products as they are processed. Sunoco entered into a supply contract for gasoline and diesel produced at the refinery for its retail marketing business.

The announced strategy included:

Entry of the Sunoco brand into Texas and neighboring states presents opportunities for additional margins through expansion of dealer and distributor channel.
Susser sells nearly every brand of gasoline other than Sunoco, supposedly under long term contracts.  How might those change over time?  Could Texans be fueling up with Carlyle Group gasoline? Consider Carlyle's history with Petroplus, a European refinery.  Carlyle made huge money flipping Petroplus in 2007.  The debt bloated firm struggled until 2012, then collapsed under the weight of its PEU debt.  That story has a familiar ring.

Energy runs in cycles.  Both ETP and The Carlyle Group believe they have tailwinds.  Their gain would likely be our pain.  

Energy Future Holdings Goes from PEU to PEU


Energy Future Holdings, formerly TXU and the largest private equity deal in history, finally imploded under the weight of nearly $40 billion in debt.  Major losers include EFH's original debt holders as well as KKR, Goldman Sachs Capital Partners and TPG's investors. 

Ironically, PEU's like Apollo, Oaktree and Centerbridge purchased deeply discounted EFH debt and will be the company's new owners.  After the 2007 financial crisis this became a viable PEU acquisition method.  The Carlyle Group back doored Brintons and Mrs. Fields via discounted debt holdings.

Energy Future Holdings prepackaged bankruptcy comes as legendary Texas heat prepares to return.

They announced the deal one month before the maximum price cap rises to $7,000 per megawatt hour, as approved by the Texas Public Utility Commission.  This is up from $3,000 per megawatt hour in 2012.  The cap rises to $9,000 per megawatt hour on June 1, 2015.  That's a 66% increase in the cap in just three years.

Should power get out of balance the next two summers, electrical generators could make huge money.  It'll be a different PEU triumvirate looking to profit big from EFH.  The question is how much Texas citizens will pay so billionaires can become kajillionaires.

Update 5-25-14:  Carlyle's Claren Road bought EFH debt on the cheap, looking for a quick payoff.  Claren is challenging typical PEU moves regarding asset transfers and management fees.   

Sunday, April 27, 2014

PEUniversity Commencement Speaker


The Richmond Times Dispatch reported commencement speakers for various Virginia/Maryland colleges/universities:

George Mason University – May 17. Speaker: David M. Rubenstein, co-CEO of The Carlyle Group global asset management firm.
Carlyle and its various affiliates could be hiring in Northern Virginia.  Rubenstein could also push 401(k) investments in private equity to parents of graduates.  He's the consummate salesman (or deliverer of puffery).  It's sure to be entertaining.

Friday, April 25, 2014

Hillary's Undeclared Conflict of Interest on Snowden


The Hill reported:

Former Secretary of State Hillary Clinton says she is baffled about leaker Edward Snowden's motive for fleeing the country to expose U.S. surveillance programs.

Instead of hiding out in China and then Russia, Snowden could have taken whistle-blower protections and stayed in the U.S., the former first lady said this week.

"When he emerged, and when he absconded with all that material, I was puzzled because we have all these protections for whistle-blowers," she said in Wednesday night remarks at the University of Connecticut, as seen in a video clip that surfaced on Friday.

"I don't understand why he couldn't have been part of the debate here at home," she added.

"I think turning over a lot of that material intentionally or unintentionally, because of the way it can be drained, gave all kinds of information, not only to big countries but to networks and terrorist groups alike," she said.

The Hill only referred to Snowden as a NSA contractor.  He worked for Booz Allen Hamilton, an affiliate of The Carlyle Group which paid Hillary Clinton over $200,000 for a speech at their annual investors meeting.

Besides not coming clean on her financial ties the article paints Hillary as clueless:

But despite Clinton's faith in whistle-blower protections, Snowden would likely face decades in prison if he ever returned to the United States.

Whistle-blower laws in the United States do not apply to employees or contractors at U.S. intelligence agencies, like Snowden. Additionally, the types of programs he has revealed are generally considered to be legal under current law, which would make it more difficult for him to obtain legal protection.

President Obama has a war on whistleblowers which Hillary will continue if elected President of the United States.  Her skirmish on the Snowden affair reveals her desire to discredit a very important whistleblower.

June 2013 - Snowden blows whistle from work inside Booz Allen Hamilton
June 2013 - Carlyle group owns 69% of Booz Allen Hamilton
September 2013 - Hillary speaks at Carlyle Group's annual investor meeting for speaking fee of $200,000
February 2014 - Carlyle sells stake in Booz, ownership of company down to 53%
April 2014 - Hillary speaks of whistleblowing but does not declare her conflict of interest with The Carlyle Group, 53% owner of BAH.

I take it conflict of interest laws do not apply to the Hillary class.

Thursday, April 24, 2014

Carlyle Buys into Turtle Bay Gardens


The Carlyle Group purchased a signature New York townhome for $13.5 million.  The townhome listing stated:

Few houses possess the grace, sense of grandeur, and at the same time comfortable intimacy that this house presents. A cornerstone of Turtle Bay Gardens, a unique enclave of townhouses on an exclusive central garden promenade, this outstanding home features a small hall of mirrors leading to a double height grand ballroom, with 22 ft. ceilings. Above is an expansive double height sky lit artist's studio. In addition to the private garden with its own central fountain, the property gives directly on to the historic promenade, the famed willow tree, and 'Medici fountain' modeled after the original in Rome. Stepping into this 38 foot mansion is a rarefied experience. With four to five bedrooms, seven fireplaces, garage, elevator. A magnificent property, and unique opportunity to participate in New York City's glamorous history, and future.

Turtle Bay Gardens was created by Charlotte Martin in 1920, when she bought a collection of 1860's townhouses, transformed them, and sold them to a select group of friends. The twenty houses and private gardens face onto an elegant communal garden, where over the decades some of the most creative and celebrated New Yorkers have called home.

Long renowned for its fiercely loyal inhabitants, Turtle Bay is the quintessential New York neighborhood. Situated along the east river, and central to all parts of New York, Turtle Bay has a sense of history, with room for bold visionaries. Encompassing the United Nations, Beekman Place, and the historic enclave of Turtle Bay Gardens, it is quietly local, yet at the crossroads of the world.

Carlyle is now the proud owner of the "evil villain's lair."  It's fitting/  With Wall Street and the United Nation nearby, it's now in the global PEU crosshairs.

Wednesday, April 23, 2014

PEU Recaps: From Liquidity to Leveraged

Obtuse PEU's continued innovating names they foist on the public to hide loading up affiliates with debt so they can pay themselves huge dividends.  Two years ago the PEU boys referred to such events as "liquidity recaps."  They're now "leveraged recaps."  Much clearer?  Right!

They are dividend bleedings, a sponsor driven monetizing move.  Bain and KKR bled giant for-profit hospital chain HCA for $4.25 billion before taking the company public.  HCA, in another charitable PEU move, may help The Carlyle Group and TPG monetize Australian hospital chain Healthscope.  The price is said to be double for Carlyle & TPG, but that doesn't count PEU deal fees, annual management fees or any "leveraged recaps." 

Private equity has their lingo and I have mine, like private equity underwriter (PEU).  The PEU trade group I call PECKER, Private Equity Capital Knowledge Executed Responsibly.  


The Rich Have Installed the Pathological


Washington's Blog ran a piece on how an empire implodes from within.  Two points resonated with my observations on the deteriorating state of leadership in organizations, both business and political.  They are:

3.  Self-serving institutions select sociopathic leaders whose skills are not competency or leadership but conning others into believing the institution is functioning optimally when in reality it is faltering/failing.
I've been surprised by my growing experience with these types in the last decade.  I'll add that these leaders optimize their personal power and income to the detriment of the organization, not to its benefit.  They also pressure others into creating and maintaining their fictions.  Anyone exposing elements of the truth are in for a world of hurt.

12. The feedback from those tasked with doing the real work of the Empire is ignored as Elites and vested interests dominate decision-making.   The point is that decisions made with no feedback from the real-world of the bottom 95%, that is, decisions made solely in response to the demands of cronies, vested interests and various elites, are intrinsically unsound and doomed to fail catastrophically.

PEUReport ran pieces on policy making billionaires, the Bush/Obama White House frequent hosting of and fawning over PEU's.  The average person's voice has been marginalized and ignored for at least a decade.  Neither the Red or Blue Team care to reverse this entrenched pattern.  It's a PEU world.  Greed, power and hubris are clearly on display.

Update 7-16-17:  Psychology studies show the impact of power on emotional intelligence.  It dumbs it down.  “Hubris syndrome,” as he and a co-author, Jonathan Davidson, defined it in a 2009 article published in Brain, “is a disorder of the possession of power, particularly power which has been associated with overwhelming success, held for a period of years and with minimal constraint on the leader.” Its 14 clinical features include: manifest contempt for others, loss of contact with reality, restless or reckless actions, and displays of incompetence.

Monday, April 21, 2014

PEU Grady-Gov. Christie Meet Pres. Obama-PEU DeParle

New Jersey Governor Chris Christie's longtime mentor Bob Grady is a private equity underwriter (PEU).  He was with The Carlyle Group before leaving to join Cheyenne Capital.  In 2010 Christie appointed Bob to the committee that oversees state pension investments, where he has since risen to Chairman.

PandoDaily takes on Grady's potential conflicts of interest in steering $300 million in dedicated investments to The Carlyle Group and how this might personally benefit Grady.  The article stated:

“The contracts that pension funds sign with private equity firms and hedge funds often say certain investors who are strategic – like, former firm partners – can be designated ‘strategic investors’ and given preference.”
This brought back PEUReport's find that White House Health Reformer Nancy Ann DeParle received a distribution from the sale of MQ Interholdings (owned by CCMP Capital Partners).  This occurred in 2011 while DeParle worked in the White House and after she "divested all conflicting assets." 

PEU's became ubiquitous the last decade, with the media only paying attention when Mitt Romney ran for President.  That coverage barely broke the surface of private equity's harm to so many. 

After her public service Nancy Ann DeParle returned to her healthcare PEU roots.  If America's healthcare reformer came from private equity and returned to private equity, who do you think stands to gain from health reform?  I'd bet private equity.

Clinton's PEU Staff Pushed Dropping Glass Steagall


Three close advisors to President Bill Clinton pushed repeal of Glass Steagall in the 1990's.  They are:

Bo Cutter
Gene Sperling
John Podesta

This trio is in addition to Larry Summers and Robert Rubin.  Former Co-Chairman of Goldman Sachs Robert Rubin went on to work for CitiGroup before joining PEU Centerview Partners as Counselor.

Bo Cutter left the Clinton team to work for PEU Warburg Pincus from 1996 to 2009.   Gene Sperling made good money working for the PEU boys in 2008:

Goldman Sachs paid Sperling $887,727 for his advice in 2008, according to Bloomberg News' analysis of financial disclosure forms. 

It was a lucrative year for Sperling. During that time he also earned $250,000 for giving briefings to two hedge funds, Brevan Howard Asset Management and Sterling Stamos Capital Management. He also earned $480,051 as director of the Philadelphia Stock Exchange. During October 2007, he was paid to speak at an event sponsored by Citigroup.
John Podesta founded the Center for American Progress.  His lobbying brother Tony and sister in law Heather made out like bandits from the Podesta insider connections.  Tony's firm earned $27.2 million in lobbying fees in 2013, while Heather grossed $7.6 million.

Clinton White House political affairs director Rahm Emanuel made his PEU haul after leaving public service.  More recent Blue White House members to join the PEU class include Peter Orszag - CitiGroup and Tim Geithner - Warburg Pincus.

They're all lining up for Hillary, the next Blue PEU pot of gold.  To think Hillary could be running against Jeb Bush of Lehman PEU fame.  It's the state of our PEU world, where Red and Blue love PEU.

Sunday, April 20, 2014

Image Obessed Leaders Distort: The Emanuel Effect

Rahm Emanuel cited three priorities when he was sworn in as Chicago Mayor.

In shaping that future, our children, and their schools, must come first.  Second, we must make our streets safer. Third, we must put the city of Chicago’s financial house in order, because we cannot do any of these things if we squander the resources they require. 

Ironically, Chicago is the place where Rahm's personal financial house expanded greatly in terms of resources.  As an investment banker Emanuel made $18.5 million in two and a half years.  His political influence grew as a member of Congress and President Obama's Chief of Staff.

In his Mayoral swear in speech Emanuel said:

As some have noted, including my wife, I am not a patient man. 

Underlings know what to bring and what not to bring such men.  Their demands must be met, ethically or unethically.


Which brings us back to Chicago crime rates.

Reporters detailed a number of incidents in which crimes were reclassified in order to fit the narrative that crime overall was falling in the city.  One reporter said. “You would hear Superintendent McCarthy and Mayor Emanuel talk about these massive crime drops but people in the neighborhoods didn’t see this and the cops in those areas didn’t see it.”

To please those in command calculations are altered.   Questions about these changes become lost in a bureaucratic maze.  Everything in the present moment must fit the narrative that Mayor Rahm Emanuel's rule is supremely successful.  It's the platform for Rahm to advance to the next stage.  The charge for underlings is to optimize Mayor Emanuel's image.  Job preservation requires this be done at all costs.

Fear is back in force.  It's a primary motivator for politicians and PEU's, second only to greed. Managers leveraging greed and fear induce massive distortions over time.  Most end badly.  Even so, it's never their fault.

Update 4-23-14:  The disease has infected the Census Bureau where data is "changed at the whim of supervisors who are more concerned about making quotas."  Here's the irony:  Quality guru W. Edwards Deming honed his management theory, not only in post-war Japan, but at the U.S. Census Bureau.  I wish he could visit us from the grave.  As he said many times, "Fear causes wrong figures."  With wrong figures who can manage?

Saturday, April 19, 2014

Carlyle Group Double: A Look Back at Horizon Lines


Private equity underwriters boast of their successes.  CNBC recently hosted Carlyle Group co-founder David Rubenstein with two of Carlyle's operating executives.  They bragged of doubling employment, while never offering the affiliates name (AxleTech).  In order to balance coverage I offer the PEU story of Horizon Lines.

WSJ reported in February 2011:

Horizon Lines Inc. agreed to plead guilty to a felony charge of conspiring to fix rates for marine freight transportation over a six-year period and will pay a $45 million fine, according to the Department of Justice. 

The container-shipping and intermodal-transportation company was accused of fixing rates between Puerto Rico and the U.S. from as early as May 2002 until at least April 2008.

Under the terms of the deal, Horizon Line said the Justice Department has agreed not to bring criminal charges against any current director or officer, although the pact doesn't apply to the company's current chief executive or chief operating officer.

Five former company executives received prison sentences after pleading guilty to bid rigging, price fixing and other charges in October 2008.  
Why would the Justice Department exclude board members or officers?

1,  Ex-Commerce and Transportation Secretary Norman Mineta served on the Horizon Board from 2006 to 2011. 
2.  The Carlyle Group owned Horizon Lines from February 2003 to May 2004.
3.  John Snow's CSX owned the company during the initiation of price fixing in May 2002.  John Snow became President George W. Bush's Treasury Secretary in February 2003.

The fine fell to $15 million according to a Horizon SEC filing.

On April 28, 2011, the U.S. District Court for the District of Puerto Rico amended the fine imposed on us by reducing the amount from $45.0 million to $15.0 million. 
Horizon settled with competitors damaged by their felonious acts:

Horizon Lines agreed to settle with shippers at a total cost to the company of $13.75 million in exchange for full release of all antitrust claims.  Under the terms of the settlement agreement, Horizon Lines will make a payment of $5.75 million within 10 business days of the November 23, 2011, effective date, a payment of $4.0 million by June 30, 2012, and a final payment of $4.0 million by December 24, 2012

"We are very pleased with this settlement, which brings to closure our last known major financial exposure relating to antitrust claims involving the Puerto Rico tradelane," said Michael T. Avara, Executive Vice President and Chief Financial Officer. "It also eliminates the potential for protracted and costly litigation."  
Last month Horizon announced a second settlement with the government:

Charlotte-based shipping company Horizon Lines said Friday it has agreed to pay a $1.5 million settlement in a price-fixing case brought by the federal government, the company’s most recent outlay in an investigation stretching back to 2008.

The settlement announced Friday resolves complaints from the U.S. departments of agriculture, defense and the postal service. As a result of collusion between Horizon and Sea Star Line, a Jacksonville, Fla.-based shipping company, the government was overcharged for shipping mail, food and other products, according to the complaint.

Read more here: http://www.charlotteobserver.com/2014/03/07/4748777/horizon-lines-to-pay-15-million.html#storylink=cpy
I wrote about Carlyle's massive profit from Horizon six years ago. The Honolulu Star chronicled Carlyle's financial windfall in May 2004.

The Carlyle Group said yesterday that it will sell Horizon Lines, one of the market leaders in Hawaii-mainland shipping, to private-equity firm Castle Harlan for $650 million -- more than double what Carlyle paid for Horizon just last year.

The Carlyle Group bought Horizon from Virginia-based rail-transport company CSX Corp. in February 2003 for $300 million when it was still known as CSX Lines and changed the name.  

Carlyle Group spokesman Chris Ullman said the equity firm, which has $18 billion under management, decided to sell Horizon Lines so soon due to Carlyle's quick success in turning it into a stand-alone shipping company. Just one and a half years after Carlyle bought it, Horizon Lines is already about to surpass a five-year goal for earnings, Ullman said, though he provided no figures.

"And that's been during a weak economic period. Imagine how well the company can do during better times. That's been a key selling point," Ullman said.

He said Horizon's hefty mark-up reflected that success and improvements in U.S. capital markets which have made it easier for Castle Harlan to leverage a deal.

That was in the early days of PEU frothiness and CSX/Horizon's price fixing.  Castle Harlan did a debt for dividend on Horizon, taking $51 million out in shareholder distributions. 

Castle Harlan took Horizon public a year later and the sad story is below.



Read more here: http://www.charlotteobserver.com/2014/03/07/4748777/horizon-lines-to-pay-15-million.html#storylink=cpy
What is in PEU management that causes executives to lie, cheat or steal to outperform on targets?  Carlyle examples include Synagro (bribing), ARINC (procurement violations), Horizon (price fixing), SemGroup (energy betting) and itself (several settlements for bribing). 

How does their influence induce public servants to stay silent about Carlyle companies and their role in deadly or nefarious events?  The Bush White House did it for LifeCare Hospitals (Hurricane Katrina deaths) & Landmark Aviation (rendition carrier).

Texas Governor Rick Perry repeatedly lied about Vought Aircraft's actual job numbers after giving the Carlyle affiliate $35 million in 2004 (promise 3,000, result 35).

Like the directors and officers of Horizon PEU players and their sponsored politicians skate. 

Lew Hosts Infrastructure Confab


Economic Policy Journal provided the names of attendees at an Obama Infrastructure meeting hosted by Treasury Chief Jack Lew.  They include (bolded names have PEUReports)::

D.J. Gribbin, Macquarie Group  (oddly the owner of 40 small Texas newspapers along the route of the proposed Trans-Texas Corridor)
.
Nicolas Rubio, Cintra (partnered with Macquarie on two U.S. toll roads-Chicago Skyway and Indiana Toll Road)

Erik Savi, BlackRock (stiffed Fannie Mae and Freddie Mac on Stuyvesant Town)

Bruce MacLennan, Global Infrastructure Partners (went after Edinburgh Airport in partnership with The Carlyle Group)

Tyler Duvall, McKinsey & Company (former Bush Undersecretary of Transportation)

Rob Palter, McKinsey & Company (highlighted the new PEU ecosystem)

Janet Kavinoky, U.S. Chamber of Commerce

Kevin DeGood, Center for American Progress (founded by John Podesta)

Jim Perry, Morgan Stanley (winner of Chicago Parking concession)

Ed Pallesen, Goldman, Sachs & Co 
 
Dolly Mirchandani, Allen & Overy
Robert Keough, Balfour Beatty Infrastructure Partners
Denis Hughes, Stonepeak Infrastructure Partners
Matt Fabian, Municipal Market Advisors

Absent were The Carlyle Group's Infrastructure Head Robert Dove and KKR's Marc Lipschultz. 

Update 8-23-14:  Macquarie et al declared bankruptcy for their Indiana toll road project.

Thursday, April 17, 2014

Crime in Our PEU World

Consider two contrasting news stories.  The first involves a common laborer taking liberties at the soda refill counter.

Christopher Lewis, an on-site construction worker, said he didn't know refills at the VA Medical Center in downtown Charleston came at a price, and Wednesday, during his lunch hour, he was originally slapped with federal charges. The ticket was issued by the Federal Police Force at the VA Medical Center in downtown Charleston after Lewis refilled his soda without paying the $0.89. A hospital spokesperson on Wednesday called it a "theft of government property."

"Every time I look at the ticket, it's unbelievable to me,” Lewis said on Wednesday. “I can't fathom the fact that I made a $0.89 mistake that cost me $525."

Lewis is now out of a job. According to a hospital spokesperson, signs are posted in the cafeteria informing patrons that refills aren't free. Lewis says he never noticed the signs and admits he had refilled his drink without paying on other occasions. He says after he went back for seconds on Wednesday, a man who identified himself as the chief of police, stopped him.

"As I was filling my cup up, I turned to walk off and a fella grabbed me by the arm and asked me was I going to pay for that, and I told him I wasn't aware that I had to pay for that."

Lewis says he tried to pay the $0.89 right there, but wasn't allowed to. He says he wasn't given the chance to pay the cashier either.

"I never had an option to make right what I had done wrong."

He says he was taken to a room, given the $525 ticket for shoplifting and told not to return to the property.

The other story has a corporate Vice President taking construction liberties.

A high-ranking manager has been fired from a construction firm that's playing a key role in reconstructing service areas on Connecticut highways after he improperly obtained more than $50,000 worth of improvements to his home, the firm alleges in a lawsuit.

David J. Papandrea of Old Saybrook was fired March 3 by Centerplan Construction Co. LLC of Middletown – after the company discovered that he "utilized his control over and access to confidential information to implement a fraudulent scheme whereby he obtained free labor, materials, and construction services for his residence," Centerplan alleged in a suit filed April 8 in Middletown Superior Court.

Papandrea also has established a public profile as a Democratic political operative at both the state and national levels. He served as a key staff aide for state Senate Democrats' majority caucus until several years ago, and was active in Democratic legislative campaigns.

He's also friends with Gov. Dannel P. Malloy, who helped him become a $5,000-a-month fundraising consultant to the Democratic Governors Association , which helps elect and re-elect Democratic governers. The DGA has paid Papandrea's consulting firm, DJP Strategies LLC, at least $120,000 from January 2012 through December 2013, public records show.

Centerplan's CEO, former Democratic state Rep. Robert Landino, said in an interview last week that he knew Papandrea through state politics, but hired him three years ago because Papandrea had held a responsible position with another construction company.

No criminal complaint has been filed, Landino said, adding that he hopes the matter can be resolved without that occurring
There's justice and "just us."  The greed and power class talk the former but play the latter.

Researchers concluded that US government policies rarely align with the the preferences of the majority of Americans, but do favour special interests and lobbying organisations.
This how former Senator Rick Santorum (R-Pa) and Rep. William "Cold Cash" Jefferson (D-La) end up on the same side of health care legislation favorable to the dialysis industry.

Our world has politicians Red and Blue.  Both love PEU. 

Economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence.

Research confirms what many of us already knew in our gut.

Update 4-20-14:  President Obama's "Just Us" Department overlooks serious financial crime while common folk face charges from a new litany of offenses.

Tuesday, April 15, 2014

Mystery: Wall Street Suspense Writer Endorses PEU Carlyle


Barron's reported on "The Whodunit Advisor":

When not advising celebrities and others, Marvin McIntryre of Morgan Stanley pens thrillers set in D.C. and on Wall Street. Imagining private eyes, recommending private equity. 

Plenty of ink has been spilled looking back on the credit crisis, but no author has had the perch of Marvin McIntyre, a top Morgan Stanley financial advisor whose office is just blocks away from the White House.

Oddly, The Carlyle Group is also located just blocks from the White House.


In 2011, McIntyre self-published a novel called Insiders, which tracks a sadistic hedge fund manager preying on politicians and CEOs. The story's hero is a financial advisor named Mac McGregor, who tries to balance the safety of his family and the needs of his clients while helping the government pursue the rogue investor.
The Carlyle Group lost their Blue Wave Partners hedge fund and Carlyle Capital Corporation (CCC) before the fall 2008 financial crisis.  Carlyle got back in the hedge fund business in a big way the last two years.

In real life McIntyre plugged Carlyle in the Barron's piece:

McIntyre's distrust of hedge funds extends beyond the fictional realm. He cautions his clients against hedge funds and their inherent need to add risk when returns go south. Instead, McIntyre puts faith in private-equity managers; he has long-running ties to David Rubenstein, the Carlyle Group's co-CEO, and likens private equity to the stock market "with advantages."

As for returns going south Carlyle made over $650 million in capital calls to CalPERS in the 2008 financial crisis.

With 2008 in the rearview mirror, McIntyre isn't letting down his guard, or his writing. In his upcoming third novel—tentatively titled Upside Down—financial perfidies give way to political corruption

Carlyle has other sinister stories, including bribery of a Congressman's wife and losing another Congressman's $20 million investment.  Carlyle affiliate SemGroup imploded from over $3 billion in bad energy bets, while another affiliate suffered 25 patient deaths in Hurricane Katrina and its toxic aftermath.  Carlyle's LifeCare Hospitals and Landmark Aviation have nightmarish stories, which the George W. Bush White House kindly kept hidden.

The book is a page turner, packed with lurid scenes of sex and murder.
Carlyle has a number of lurid stories, Synagro, LifeCare, SemGroup, Brintons, Blue Wave Partners, CCC, and Oriental Trading (complete with toxic jewelry for kids).  Marvin McIntyre is in the business and that requires PEU pandering.  There's plenty to mine at Carlyle, but McIntyre is better off looking the other way.

Monday, April 14, 2014

Brazilian PEU's Seek Lower Taxes


The Carlyle Group's Fernando Borges, currently managing director and co-head of South American private equity, wants lower taxes on investments in Brazil. Borges is also the new head of the Brazilian private equity and venture capital association.  He offered this at the group's annual meeting in Rio de Janiero:

Borges noted that "a more benign fiscal and tax structure for these vehicles would help ensure their survival and, why not, their blossoming as a stronger source of money for new enterprises in Brazil."
Borges echoed Carlyle's familiar "lower tax" refrain, regularly offered by the PEU's high profile co-founders.   Carlyle's co-founders aren't satisfied having their company be a virtual nonprofit.  

Bazillionaires win in our PEU world.

Sunday, April 13, 2014

IRS Goes for Little Guy


WaPo reported:
Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check.

The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years.  

The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.

Four years ago private equity underwriters successfully defended their preferred private interest taxation.  PEU's pay virtually no federal income taxes.  The Carlyle Group reported $104.1 million in net income in 2013.  It noted a $2.2 million provision for federal income taxes, a 2.1% income tax rate. 

While Uncle Sam holds average citizens responsible for debts they never incurred PEU boys are taxed like a nonprofit charity and get to park money offshore.  Care to play "Count the Cayman's"?  The game is correctly counting the number of Carlyle Group affiliates in the Cayman Islands (from their 2013 SEC filing).  It may be time to update the challenge.

Update 4-14-14:  The government stopped this practice as of today.

Debt PEUniverse Orbits Back to 2007


Did global efforts to save our financial system in 2008 put the world at more risk five years later?  That's the concern of Bill White, former chief economist of the Bank for International Settlements.  ZeroHedge reported:

"It all looks and feels like 2007. And frankly, I think it’s worse than 2007, because then, it was a problem of the developed economies. But in the past five years, all the emerging economies have imported our ultra-low policy rates and have seen their debt levels rise. The emerging economies have morphed from being a part of the solution to being a part of the problem.

When you talk about crisis resolution, it’s about attacking the fundamental problems that got you into the trouble in the first place. And the fundamental problem we are still facing is excessive debt. Not excessive public debt, mind you, but excessive debt in the private and public sectors. To resolve that, you need restructurings and write-offs."

Excessive private debt has that 2007 feel with the return of covenant lite borrowings.  FT reported:

Dollar-denominated cov-lite loans to US and European companies reached a record $260bn in 2013, or 57 per cent of the total volume, and 69 per cent more than in 2007.

This has prompted the Federal Reserve and the Office of the Comptroller of the Currency to warn that the lack of “meaningful” covenants was a sign that “prudent underwriting practices have deteriorated”.
Forbes added:

Whether covenants afford much protection or not, the pressure from private equity sponsors on financiers to ditch them is building.

US lenders hungry for yield are keen to fund European companies, which means sponsors always have the option to take their deals across the Atlantic to take advantage of low margins and looser terms
Returning to Bill White and his concerns:

The first thing I would worry about are asset prices. Every asset price you could think of is in very odd territory. Equity prices are extremely high if you at valuation measures such as Tobin’s Q or a Shiller-type normalized P/E. Risk-free bond rates are at enormously low levels, spreads are very low, you have all these funny things like covenant-lite loans again.
Private equity underwriters (PEU's), at least those monetizing affiliates, couldn't be happier with extremely high equity valuations and dirt cheap financing.  The question is how much can they cash in before things change.

The strengthening growth might be a mirage. And if it does not materialize, all those elevated prices will be way out of line of fundamentals.
It's one of three scenarios offered by White. 

This is the last of a whole series of bubbles that have been blown.
The bubble may gently decompress or it may burst.   It's our bubble blowing PEUniverse. 

Update 4-13-14:  Ashleigh Rogers of Seeking Alpha sees blue skies ahead for Carlyle.   She finds it a screaming buy.  This will improve her chances of interviewing Carlyle co-founder and chief salesman David Rubenstein.

Friday, April 11, 2014

Condoleeza Rice's Board Seats = Cashbox


Businessweek broke the news that Dropbox appointed Condoleeza Rice to its board of directors.  Rice's consulting firm worked with Dropbox.  The director's chair is not new to Condi.

Kior Inc. reported in a 2013 SEC filing:

Condoleezza Rice, Ph.D., age 58, has been a member of our Board of Directors since August 2011. Dr.Rice is on the board of Makena Capital, a private endowment firm, and C3, an energy software company. She has also served on the boards of directors for Chevron Corporation, Charles Schwab Corporation, Transamerica Corporation, Hewlett-Packard Company and the International Advisory Council of J.P. Morgan.


Kior - Rice's 2013 Director Compensation totaled $196,444.

The company's 2014 10-K stated:
We are a next-generation renewable fuels company, developing a commercial process to produce cellulosic gasoline and diesel from abundant, lignocellulosic biomass. We have substantial doubts about our ability to continue as a going concern.
Kior has nearly $70 million in loans from the Mississippi Development Authority which may come due to performance failures under the agreement.

Makena Capital - "We invest globally across multiple asset classes, including Private Equity, Real Estate, Natural Resources, Absolute Return, Global Public Equity, Tactical/Hedged Equity and Fixed Income, applying a proprietary currency management overlay to optimize risk adjusted returns."

C3 - "C3 Energy offers smart grid analytics SaaS solutions that enable utilities to realize the full promise of their investments in the smart grid." The company was poised to make money off carbon emission tracking and trading.

In addition Rice served as Senior Advisor for the Regions Financial Board of Directors for three years.

Back to Dropbox, Rice's latest board seat.  Earlier this year Dropbox raised capital through a $450 million stock offering.  Allen & Company and Goldman Sachs brokered Dropbox shares to private buyers.  Fidelity is one big shareholder. Others include BlackRock and T. Rowe Price.

Thursday, April 10, 2014

The Kidney Report: SEC Retirement



SEC lawyer Jim Kidney clearly understands "front stage" behavior for public consumption and "back stage" behavior for personal enrichment.  My favorite lines include:

1.  The revolving door is a very serious problem.

I have run into more ego obsessed leaders in the last decade who don't care a lick about anything other than managing their power, influence, compensation and image.  

2.  The only other item I want to be serious about, besides some personal observations in a minute, is the metric of the division of enforcement: number of cases brought. It is a cancer. It should be changed.   ...  I imagine they would welcome coming to an educational event about the Division’s new metric, one which focuses on quality, not quantity. Who could be against it? Goodness knows we spend millions promoting even our emptiest achievements. Why not promote a new metric that will be sensible and helpful.
The language of quality remains but its been co-opted by the aforementioned image obsessed leaders.  They toss out continuous improvement and quality whilst undertaking strategies that ensure the very opposite.  Dr. W. Edwards Deming must be chagrined at how his comprehensive management theories have been jettisoned for the siren song of cheap foreign labor and obscene executive incentive compensation. 

3.  The system is broken. The staff has to work with it. Lighten up on them. They are like refugees from the Crimea. Be kind.
Kidney recognizes what decades of #1 and #2 have fraught on our institutions.  The dual obsession with metrics and image make the workplace a dangerous place to navigate.  I agree we should try to be kind to fellow workers tromping through the toxic management swamp alongside us.

Jim Kidney spoke his heart, his mind and his funny bone.  I appreciate his insights and courage.

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.  

PEU Specialization Not New


Forbes reported:

The days when private equity fund managers and investors could make out-sized returns through plain vanilla, debt-fueled buyouts are over. Some of the best opportunities today are in specialist private equity funds that stretch the boundaries of the asset class.
The first area mentioned is litigation finance

A growing number of private equity funds follow niche strategies such as Longford (Capital Management’s litigation finance) and specialization is increasingly seen by wily finance professionals like Longford's Bill Strong (formerly of Morgan Stanley) as the best way to make double-digit annual returns from the activist, long-term investment approach that best defines private equity. “Litigation finance today” is where the buyout industry “was in the early 1980s,” says Strong. “The demand for the capital greatly exceeds the supply.”
Niche strategies in the 1980's provided seed money for The Carlyle Group's startup.  The niche was Alaskan Native tax losses and David Rubenstein the legal specialist.  Fast forward to yesterday when Alaska's largest daily newspaper joined the Rubenstein family (through his wife's ownership).

Niche strategies come and go, with some having cyclical patterns.  That leads to the second area Forbes identified, energy.  Forbes stated:

The oil industry is currently looking to sell more than $300 billion in assets as stock market investors press oil companies for lower capital expenditure and higher dividends after years when free cash was spent developing deep offshore wells and shale projects. Marcel van Poecke, an oil industry entrepreneur with over 25 years of industry experience, hired last year by private equity fund manager Carlyle Group, said at the recent FT Commodities Summit: “I’ve never seen the market with so many good assets for sale. It is the buyers’ market.”

The article should have said "rehired."  Poecke founded and worked for European refiner Petroplus, which became a Carlyle affiliate in 2005.  After making five times their original investment in two years Carlyle jettisoned a debt bloated Petroplus Holdings.  Petroplus carried its heavy debts for five years before imploding, i.e. declaring bankruptcy.

Energy cycles and Carlyle and company are ready to reenter refining in part to lock up supplies for commodity trading.  If Carlyle's staid pipelines can explode from bad energy bets, I expect refineries to be even more volatile

Update 6-17-15:  Reuters missed Carlyle's and Poeke's connnection to Petroplus' bankruptcy as Carlyle seeks to build a mini-major energy company in Europe.

Wednesday, April 9, 2014

Carpati Joins KKR's PEU Family

Bloomberg reported:

Bruce Karpati, a former top attorney at the U.S. Securities and Exchange Commission, is joining KKR & Co. as the private-equity firm’s global chief compliance officer.  
Karpati left the SEC in May 2013 after twelve years with the agency.  He oversaw 75 lawyers as head of the enforcement division’s asset-management unit.

I'm sure he'll be working to defend KKR's PEU fees.  Karpati sounds like a name from a Mafia crime family.  My guess is he'll aid the wider PEU family through their trade group, which I've nicknamed PECKER (Private Equity Capital Knowledge Executed Responsibly).  KKR's Ken Mehlman is currently Chairman of PECKER.

I bet Karpati helps KKR and whole PEU lot.  They know the value of employing ex-politicians, bureaucrats and regulators.

Tuesday, April 8, 2014

Mrs. Rubenstein Buys Anchorage Daily News


Alice Rogoff, the wife of Carlyle Group co-founder David Rubenstein, approached McClatchy with an offer to buy the Anchorage Daily News, Alaska's largest daily newspaper.  They agreed on a $34 million deal which includes the newspaper's building.  Rogoff plans to sell the building after the deal closes.

Investment tea leaves show Carlyle going after global energy assets.  Carlyle has held pipeline companies and LNG providers.  Alaska is pursuing both.

Ukraine and Western Europe are already in play. Bloomberg said Carlyle's energy shopping spree is driven (in part) by:
Commodity traders are investing in infrastructure to expand their trading opportunities and secure supplies.

Carlyle owns a commodity trader, which lost clients huge money in bad energy bets.  They expect those fortunes to turn.

Rubenstein speaks regularly on how Alaskans can prosper economically.  How might a widely read Alaskan newspaper in the family help Carlyle's cause?  One, it could advocate for private equity underwriters (PEU's) given his lament that private equity underwriters' have been unable to explain their model in a way that ensures universal accolades.

Two, it could advocate for any energy positions Carlyle International Energy seeks in Alaska.

Three, Carlyle has an infrastructure fund searching for investment opportunities.  Alaska could be one place those funds are mobilized.

Four, Alaska has the Permanent Fund from oil production.  Carlyle would love to invest a larger chunk of those public monies.

Five, Alaska is close to Russia.  The geopolitical chess pieces are in play.  I don't think Mrs. Rubenstein can see Russia from her house, but proximity is a plus for global tamperers. 

Russia's stress could be increased by Western moves.  Think what Wall Street and their PEU brethren did to obliterate Libya's sovereign wealth fund.

Mrs. Rubenstein said she wanted to use the paper to “do more journalism, more multimedia and more stories about Alaska.”  What happens when the story involves her husband and Carlyle Group investments?

Here's a blast from the past.  Before founding Carlyle David Rubenstein profited on the backs of Alaskan natives.

In 1984, a law was passed allowing native corporations in Alaska—that is, Eskimo owned companies created by Congress to manage native lands—to sell their losses to businesses looking for tax write-offs. The Marriott executives, working with David Rubenstein at Shaw Pittman, discovered the Eskimo clause and vigorously bought the losses to offset gains. The adventure has become known in some quarters as the Great Eskimo Tax Scam.
It's the evolving Arctic which aims:

To investigate the progress of development in the Canadian Arctic and the needs to support an expanded shipping season for cruise ships, resource extraction and the potential traffic using the North-west Passage as a shorter shipping route. The Seminar will consider the resources in place for Search and Rescue, Oil Pollution Response, Ice-breaking, Ice-navigator services, re-fuelling, ship repair and places of refuge. Discussions will consider requirements for investments in infrastructure and regulatory regimes to protect seafarers, the fishery and the sensitive environment, resources and communities.

If past development is indicative of future development one thing's for sure.  Rubenstein and his PEU brethren get richer.

Update 4-14-14:  David Sirota picked up on this theme with his piece on Carlyle's huge presence in Alaska. 

Update 5-24-14:  The Alaska Permanent Fund entered into an up to $750 million account with Carlyle Group , approved in July 2013, to target natural resources, metals and energy.

Monday, April 7, 2014

PEU Fees: Most Are Inflated

Bloomberg reported:

A majority of private-equity firms inflate fees and expenses charged to companies in which they hold stakes, according to an internal review by the U.S. Securities and Exchange Commission, raising the prospect of a wave of sanctions by the agency. 

More than half of about 400 private-equity firms that SEC staff have examined have charged unjustified fees and expenses without notifying investors, according to a person with knowledge of the SEC’s findings who asked not to be named because the results aren’t public. While some of the problems appear to have resulted from error, some may have been deliberate, the person said. 
More than half of PEU's erred or cheated in calculating fees.  That beats corporate executives who backdated roughly one third of executive stock options in their decade long cheating of stockholders, enabled in part by SEC Chair Arthur Levitt under President Bill Clinton.

PEU victims are heavy hitters, the independently wealthy, sovereign wealth funds, private foundations and public pension plans. 

PEU's love to market their outstanding returns before fees and expenses.   Uncle Sam carved out a free range for the PEU boys to operate the last thirty years.  The Carlyle Group hired ex-SEC Chair Arthur Levitt in part to keep this uncharted territory.

This leak is a shot across the bow of the PEU boys.  Note the "go forward" language in the piece:

The SEC’s action against Clean Energy Capital is probably just the first of several enforcement cases that will draw the boundaries of what’s allowed.
Look for the PEU lobbying group, which I've nicknamed PECKER, to respond vociferously.  They have an image to maintain, complete with illusions.

Both political parties, Red and Blue, love PEU.  Watch for details, on both charges and new rules.  I expect it there to be populist rhetoric and with corpora-fornicating implementation.  PEU profits equal political donations from their numerous buckets of money.

Sunday, April 6, 2014

State Department: Internal Controls Lacking under Hillary

The U.S. State Department had woeful accounting and poor internal control systems for the last six years, much of that under ex-Secretary of State Hillary Clinton.  WaPo reported:

The State Department’s inspector general has warned the department that $6 billion in contracting money over the past six years cannot be properly accounted for and cited “significant financial risk and . . . a lack of internal control.”
Such failure, the IG said, “exposes the Department to significant financial risk and makes . . . oversight more difficult. It creates conditions conducive to fraud . . . [and] impairs the ability” of the government to protect its interests and “to punish and deter criminal behavior.”

Timing:  This has a similar feel to GM's deadly recall announcement after CEO Daniel Akerson stepped down to rejoin the Carlyle Group.

Connections:  Coincidentally, ex-Secretary of State Hillary Clinton earned $200,000 speaking at The Carlyle Group's annual investor meeting. Carlyle co-founder David Rubenstein later interviewed Hillary, offering her a private equity underwriter (PEU) job.

Her words:  At her Joint Civilian Service Award ceremony Hillary Clinton said:

"We have pioneered a nimbler, more innovative, more effective approach to foreign policy, so I am enormously proud of what we have achieved, and I'm confident about the future."
"I like being on the American team, not the State Department team, not the Defense Department team, not the partisan team. I like being on the American team. And I think when we take these positions and take that oath of office, we really pledge to be part of the American team."--Secretary of State Hillary Clinton

Hillary earned the highest award the U.S. military can bestow to a civilian.  It seems appropriate given the Pentagon's inability to audit itself.

Words about Hillary:

"As Hillary often says, this is not just the right thing to do; it is also the smart and effective thing to do."--Mrs. Ververr

Content:  Poor accounting and loose internal controls aren't new to the Clinton gang.

The Clinton Global Initiative confessed to handling money poorly, which personally enriched the Clinton's close contacts.

My take:  It's a PEU world, where the greed and power class feel best interacting with their own.  There's an unstated obligation to enrich their friends, regardless of the money source.

Leadership Question:  The buck stops where?

Wednesday, April 2, 2014

PEU Boys Want to Profit from Publicly Financed, Private Education


The greed and leverage boys, also know as private equity underwriters (PEU), want to "save education" via corporate machinations.  It's bad enough education has imitated poor management practices that pit people against one another and result in widespread cheating, a.k.a. fraud. 

It's our PEU world, where politicians Red and Blue love PEU.  Predictable public money flows are tantalizing to modern day Robber Barons, thus their interest in education, health care and infrastructure. 

Diane Ravitch, Assistant Secretary of Eduation under President George W. Bush changed her mind on privatizing education after studying the issue in depth:

What surprised me the most, quite frankly, was the lack of any leadership in the democratic party to say no. And as I saw the amount of campaign contributions in state after state going to both parties, as I realized that anyone who wants to run for president has to go to Wall Street, it became very frightening to think that there might be a political way to actually stop this movement to destroy public education and to monetize public education.
Once the monetization starts it becomes a cycle of flipping, with each buyer looking to make their fortune on the backs of the affiliate's customers and its next buyer.

When I see a status quo that's controlled by the wealthiest people on our country in alliance with the political power in our country, it makes me want to rail against it. And I'm railing against it as best I can.
I resonate with her motivation, which was in part why I started PEU Report seven years ago.  Unfortunately, the toxins have spread.  I hate to think how education and health care will further distort in our PEUbiquitous world.

Tuesday, April 1, 2014

CalPERS Gives PEU Information to Oxford but Not to Naked Capitalism


Reuters reported:
 
The California Public Employees’ Retirement System has lawyered up as it continues to face withering criticism from a financial blog that says the system is stonewalling its public records request. The system has brought in Steptoe & Johnson — the firm that ran CalPERS’ internal investigation into pay-to-play activities a few years ago — to help deal with a data request from blog Naked Capitalism in a situation that has escalated to almost absurd levels.
CalPERS is not talking, preferring to leave it to the lawyers to handle the situation.
The data in question runs from 1990 to the end of 2008.   Why would CalPERS freely share data with Oxford University researchers and not with a respected financial blogger?  Clearly they view one as an ally and the other worthy of lawyering up.

CalPERS invested $175 million in The Carlyle Group in 2001.  They purchased 5.5% of Carlyle, which fell to 4.2% by the time Carlyle went public in 2012.  At the time Reuters reported:

CalPERS received $225.2 million in carry, fees and distributions from its Carlyle stake. By adding these distributions to the $284.1 million current public value of CalPERS's shares, CalPERS nets a combined, nominal value for its investment of $509.2 million. That figure represents a cash-on-cash multiple over its initial $175 million investment of 2.9x, and an IRR of between 12 and 13 percent over CalPERS's 11-year ownership period.

CalPERS has also invested in 26 Carlyle funds since 1996, making commitments exceeding $4 billion, far more than the $175 million ownership investment in the firm.
CalPERS did monetize their Carlyle Group equity investment in 2013, grossing an additional $90 million for waiting.  Bloomberg reported:

At Monday's closing price of $29.39, a sale of CalPERS' full stake would generate $374 million in proceeds, more than two times the pension fund's 2001 investment. That return doesn't take into account the dividends CalPERS has collected from its ownership.

Carlyle likes to brag about its 30% annual return on equity from its private equity investments.  That could be one reason for CalPERS to obfuscate PEU performance information.

Industry associated researchers seem happy to only include investment winners in their samples.  No bankruptcies allowed.  Many researchers stop the analysis when the affiliate is monetized.  This ignores how debt bloated firms perform after their ejection from the PEU system.

As for the end of 2008, that's a dicey time in the financial world.  Carlyle made over $680 million in capital calls to CalPERS during the financial crisis.

Eight Apollo funds called a total of $1.71 billion from CalPERS last year. Washington, D.C.-based Carlyle Group, the world’s second-largest private-equity firm, made $681.3 million of capital calls on the pension fund in 2008. Fort Worth, Texas- based TPG, which also has piled into distressed debt, drew down $272 million, and Blackstone Group LP in New York, manager of the world’s largest buyout fund, called $143 million. 

How might this information be represented in the Oxford numbers?

Naked Capitalism closed with:

CalPERS seems to see indulging the PE industry’s mania for secrecy as more important than meeting its obligations under the law and doing what is in the best interest of its beneficiaries. 

Bingo!  Welcome to our PEU world, infected by the greed and leverage boys and their need for stories to be told their way.  That's the function of the PEU research crew, foreign and domestic. CalPERS equals PEUbiquity in a world where politicians, Red and Blue, love PEU.

Update 4-2-14:  CalPERS clarified their noncooperation with Naked Capitalism by stating "perhaps the true intent of her infatuation with CalPERS was to seek a means to gain exposure for herself, her financial advisory services firm, or her blog (where paid advertising and her own book for sale are prominently displayed)."  More evidence that CalPERS sees Naked Capitalism as their foe in our PEUbiquitous world.

Update 4-4-14:  Naked Capitalism's foe position was strengthened by a DealBook piece.  It identifies a concern that actual PEU returns could be calculated and real returns could be much less than represented. I smell another Carlyle Group puffery defense