Wednesday, June 29, 2022

Pinhead Billionaire

Billionaire Amazon founder Jeff Bezos said:

 "Inflation is a regressive tax that most hurts the least affluent."

Price increases are not a tax as the money is received by the selling company and not a local, state or federal government entity. 

Does it gall anyone that a billionaire tax-paying minimalist is telling customers Amazon's price increases are going to the government he lobbies to not support financially but to control tax policy?  

By least affluent is he referring to the simple millionaire or the actual poor, many of whom he employs?  Bezos could easily afford to give them raises but finds it more profitable to insult them. 

Tuesday, June 28, 2022

Cheating, Unethical CPAs

Financial industry reviewers are supposed to be ethical professional accountants.  Consider this news story:

Ernst & Young LLP admitted that dozens of its audit personnel cheated on the ethics portion of the Certified Public Accountant exam and that the firm misled US regulators probing the misconduct.

Almost 50 EY audit employees improperly shared answer keys to the ethics portion of the CPA exam between 2017 and 2021 and hundreds more cheated on continuing professional education courses.

Not only did hundreds of CPAs cheat on their professional education, their accounting firm employer covered for them.  

Ersnt and Young isn't the only accounting firm involved in cheating.  KPMG did as well.  These disturbing events follow decades of erosion in accounting standards.   

Nonstandard accounting measures are widespread and give investors the impression that a firm is profitable when it is clearly not.  This form of cheating helps inflate stock and corporation values.  That helps the greed and leverage boys flip companies for greater profits. 

Monday, June 27, 2022

Rubenstein on Recession: Inevitable or Not?

CNBC spoke to Carlyle Group co-founder David Rubenstein in Aspen. He dropped his recession-banana analogy for the interview.

Rubenstein said. “I don’t think it’s inevitable that there’ll be a recession. I do think it’s tough to avoid a recession, but it’s not inevitable,” he added. 

Inside an organization as large as private equity giant Carlyle Group, he says there is no “common view on any one thing,” but he added “we don’t feel we’re going into a recession.” 

He said deals were still getting done but at lower multiples of earnings (however fictional).  Debt remains "readily available" (but much more expensive).   

If Carlyle felt we were going into recession that would be a trade secret the PEU would use to dump assets.  Rubenstein is the consummate salesman.  That's why Congress kept private equity's preferred taxation for decades (deeply against public opinion).  

The greed and leverage boys share one thing.  They can't get enough money, ever.  

Any student of history knows the next economic recession is inevitable.   An esteemed author saying otherwise looks like pandering to nervous investors so his firm or family office can exit first.

Saturday, June 25, 2022

The Greatest Fleecing is Yet to Come

When people are angry their leaders can rob them.  The pickpocket uses diversion and misdirection while fraudsters use secrecy and subterfuge.  America's leaders have access to all these tricks to enhance their wealth through illicit means.  

The current Supreme Court is out of a Dan Brown novel.  Trump's three appointees were presented as somewhat mainstream but that was just for public consumption.  His last appointee is a member of what would normally be called a religious cult which requires subservient females. 

Senators Joe Manchin (WV) and Susan Collins (ME) were surprised that the two male judges lied to them to get their seat on the court.  Collins said:

...the court’s abandoning of a 50-year precedent was “ill-considered action that will further divide” the country during an already fraught time.

The U.S. Supreme Court disrupted part of our healthcare system and allows state/local governments to make decisions about safe medical procedures and prescription drugs without any knowledge or training.

Prior to Roe vs. Wade Texas college coeds from wealthy families would fly Braniff Airlines to Japan for their arranged abortions.  Parkland Hospital's emergency room routinely saw black women presenting with a ripped uterus from back alley butchers.  Those days will return as America is made great/grate again.

Disruption is the province of private equity underwriters (PEU).  The greed and leverage boys upend industries, companies and workers' livelihoods in their pursuit of grand returns.  They align with political power and suckle from government coffers while enjoying preferred "carried interest" taxation.  Rest assured their will be no serious challenge to unjust PEU tax benefits while people are in the streets.  

The Federal Reserve Bank uses the language of helping the common person but has policies benefiting the PEU class.  Joe Manchin speaks regularly to and carries water for billionaires who do not live in West Virginia.

Robbing the poor and middle class to pay the rich, that is the PEU way.  Politicians Red and Blue love PEU and increasingly, more are one.  I smell huge profitgasms as elected officials pit citizen against citizen.  

Update 6-27-22:  The Q-Anut is back after a two year hiatus.  He must need more money.  Red Team grifter Steve Bannon continues to incite his followers to violence.  Bannon runs an "army of the manipulated." as he works to break the bonds of society.  Lord help us all.

Update 6-28-22:  PEU disrupters plan to reimburse employee travel for out of state of abortion services.  Blackstone, Apollo and Carlyle indicated this change in policy.

Wednesday, June 22, 2022

PEU Self Service Questioned


Vincent Mortier, Amundi Asset Management’s chief investment officer, said this month that parts of the buyout business “look like a pyramid scheme” because of “circular” deals in which companies are sold between private owners at high valuations. 

A common feature is that a stake in one or more portfolio companies is sold from one fund to another, both of which are controlled by the same private equity firm. 

Speaking privately, some pension funds are frustrated. “This is wonderful for the [buyout groups]; it’s one of the best things they ever discovered,” says one pension fund’s head of private equity, who asked not to be named. 

But “it’s one of the worst things” for their investors, he adds. “The pie is getting bigger” as private equity balloons in size, he says, but “more of the pie is going to the [private equity firm] and less is going to [its investors].”  

Public companies have seen valuations decline significantly.  Private equity underwriters (PEU) are yet to reveal their corporate markdowns.  

Publicly traded PEUs are down 25% since April Fool's Day and Barron's says are worth buying.  Really?  There's been barely any time for rich PEU valuations to reset and worm their way through the financial system (capital calls, debt downgrades, handing affiliates over to debtholders).

The greed and leverage boys would love nothing other than a quick bottom and return to asset reflation.  In the meantime they want you to buy (like Barron's).  You too can be like billionaire David Rubenstein, co-founder of The Carlyle Group. 

The difference is he's a policy making billionaire scrambling to save his cryptocurrency service investment in Paxos.  It's not clear if any of his recent $77 million Carlyle stock sale went to prop up Paxos.  

Update 6-23-22:  Coinflex and Voyager Digital placed restrictions on withdrawals from investor's crypto accounts.    This follows Terra's implosion of an algorithmic derived cryptocurrency and crypto lender Celsius' freezing of accounts.  Babel Finance executed a similar move as Celsius.  Add the suspected insolvency of Three Arrows Capital, a crypto hedge fund and one has to wonder how Paxos is holding up.

Update 6-28-22:  Carlyle invested 15 million more Euros in affiliate Memsource.  It acquired the firm two years ago.

Tuesday, June 21, 2022

Bankless Bankman-Fried's PEU Moves


“Sam Bankman-Fried is the new John Pierpont Morgan -- he is bailing out cryptocurrency markets the way the original J.P. Morgan did after the crisis of 1907,” Anthony Scaramucci, founder of SkyBridge Capital, said in an interview, referring to that year’s banking panic, which led to the creation of the Federal Reserve System.

“It doesn’t take a lot of capital right now to support prices and failing lenders, and there are a lot of players incentivized to ensure this industry doesn’t fail.”

One of those players is consummate Washington insider David Rubenstein, co-founder of The Carlyle Group.  Rubenstein's Declaration Partners has a stake in crypto focused Paxos.

The latest financing provided by Bankman-Fried is “not unlike private equity shops that will invest more capital into portfolio companies amid distress -- sometimes it’s enough, sometimes not,” said Noel Hebert, director of credit research at Bloomberg Intelligence. “Intra-crypto industry players are among the only ones with an incentive to lend here.”

Microstrategy CEO Michael Saylor pleaded for government intervention to stem the cryptocurrency crisis:

The world’s largest public holder of Bitcoin called on government regulators to finally tackle a laundry list of risky, immature crypto industry practices, or “parade of horribles,” that are unfairly weighing on the price of its asset.
No Bull's George Noble said that distress will undo the greed and leverage boys who grossly overpaid for affiliates and will be ravaged by markdowns for years to come.

The fact of the matter is the Central Banks of the world completely screwed it up.  They kept their foot on the accelerator....  I think this whole bullshit experiment the last umpteen years of QE and all this nonsense is all it's done is drive up financial asset prices.  It's increased the inequality of wealth in this country.  It's been horrible from a society standpoint this hyper financialization of the economy by the banksters..  It's been disastrous.

The only thing it's done is line the pockets of private equity and goldman sachs.  Enough of this already....I think the market is going to fix it, the market is fixing it.  I think private equity is dead.
What happens when the bankless imitate shadow bankers as they plead with government to become real bankers?
Update 6-25-22:  Goldman Sachs is readying to feast on the carcass of Celsius.  Feces needs a middleman.  Who will Goldman brokers push it on, their customers or Uncle Sam?

Sunday, June 19, 2022

Gridiron Disrupted by PEU Helmet Shortage

High schools coaches are scrambling for football helmets as practices are but months away.  The problem surfaced last year but remains acute.  Matt Stoller's Big reported private equity underwriters (PEU) have cornered the helmet market.

Riddell is owned by private equity giant Fenway Partners, which has been trying to find a merger strategy for the firm for the last fifteen years. And its rival Schutt is owned by Innovatus Capital Partners, which put out a press release announcing its intent to consolidate the space in 2020 due to the pandemic.

Concussions have been a big issue for manufacturers.  The greed and leverage boys are good at ring fencing risk at the affiliate level.  They are also known for starving affiliates of capital in stressful market conditions.  

If liability becomes a big enough issue I wouldn't be surprised if the PEU boys dump Riddell or Schutt onto debt holders.  Disrupters disrupt until they get disrupted.