Feeing on Both Sides of the Deal

The Carlyle Group located in Washington, D.C. after its formation in 1987.  The politically connected private equity underwriter (PEU) purposely hired politicians of both stripes as it strategized how to take advantage of Uncle Sam's giant wallet while minimizing any contributions to the federal budget.  

That went international with Endeavor, a "nonprofit" focused on supporting entrepreneurs around the globe.  Endeavor Catalyst is the PEU part of Endeavor.

How many "nonprofits" have stakes in 51 companies valued at over $1 billion each?  Just like the PEU boys Endeavor hates paying taxes.

Unlimited Hangout reported on the history of global tamperer Endeavor.  The story included:

By ensuring that they dominate the leaders of both the public and private sectors of the current and new generations, these oligarch networks are able to control both sides of the “public-private partnership.”

Both sides of the deal!  That's frosted my backside and motivated me to start PEU Report back in 2007.  My wise friend recently informed me of a Bloomberg story on a failing affiliate.  My reply:

I expect a flood of these and find it absolutely appalling the sponsor that ran their affiliate into the ground can come out the other side with equity and make fees doing so.

His wisdom:

Appalling. I commend you for moderating the use of adjectives.  In these cases prison slang expletives come to mind. Financial masters of disaster have insulated themselves in a world of contrived valuations, debt originations, legal confiscation via asset stripping and transfers, Byzantine fee structures, self dealing, accounting chicanery, derivatives type leveraging, and other extraordinary financial contortions to levitate and  extract paper wealth ad infinitum.  Meanwhile, the man in the street (honest labor) gets to compete with dishonest MEGALOMANIACS. Oh, and is it any wonder they can't keep up? Just take a look at Uber and the accumulated losses from inception to today where the private market valuation created billionaires galore while at the same time violating labor and privacy laws and regulations.

The Guardian reported:

A leaked trove of confidential files has revealed the inside story of how the tech giant Uber flouted laws, duped police, exploited violence against drivers and secretly lobbied governments during its aggressive global expansion.

The lords of the dickiverse see the same giant wallet as the PEU boys.  Andreessen Horowitz just opened a D.C. office after leaving 20 million fintech users in a lurch.  The new office is a block and a half from the White House. 

The Endeavor in this story is not to be confused with the Ari Emanuel led global sports and entertainment company)  Interesting aside:  Ari recently asked Biden advisor Ron Klain (also a PEU with Revolution, same as J. D. Vance) "What's your Plan B?" regarding the apparent mental deterioration of Joe Biden.  My guess is Ari knew Biden's Cabinet was chock full of PEUs.  Semafor reported:

“We are in fuck city,” Emanuel said earlier this month at the Aspen Ideas Festival

Politicians Red and Blue love PEU and increasingly, more are one, as evidenced by Trump's new VP J.D. Vance (Narya Capital, Revolution Rise of the Rest, Mithril Capital). The competition is on as to which party can best serve the greed and leverage boys.  From my seat, both teams have done a bang-up job.  Add the international component and things really get disturbing for the common person, desirable only for their votes and user fees.

Vance Man of the PEUple

Vice Presidential candidate J. D. Vance completed a financial disclosure form as a member of the Senate.  His 2023 form is yet to be filed but his 2022 disclosure shows holdings in two private equity underwriters (PEU), Narya Capital and Revolution's Rise of the Rest.  Vance founded Narya Capital and he disclosed that he held limited and general partner stakes in the firm without estimating their value.  

While many citizens struggle with daily finances, Vance had multiple high paying "full time" jobs.  

Consider the following on Narya Capital.  SkyNews reported:

Mr Vance subsequently went to work for Revolution, a VC firm based in Washington DC, before launching his own VC firm, Narya Capital, in 2019.

Financial Review reported on Vance's two private equity positions:

Vance was recruited by AOL co-founder Steve Case for a new venture: a $US150 million Washington-based fund that tapped big investors such as Jeff Bezos and Ray Dalio to jump-start young companies in overlooked American cities.

Narya was backed with about $US100 million from Thiel and a cadre of his acquaintances, including former Google chief executive Eric Schmidt and prominent venture capitalists Marc Andreessen and Scott Dorsey.

Surely these heavy hitters require more than 40 hour a week work.  Nope.  Axios reported:

Vance and (fellow Narya co-founder) will continue as advisers to Rise of the Rest, which raised its second fund of $150 million in October.

Vance also holds stakes in Narya affiliates as well as dozens of other private companies.  

Many Narya affiliates are direct or indirect recipients of federal programs.  His next report is due by August 13, 2024.  

J. D. informed his party and the viewing public that he will not forget his roots.  Neither will former Blue Team Senator Kyrsten Sinema, who saved PEU preferred "carried interest" taxation.  

Neither Vance nor Sinema will return to their hard scrabble days.  They swim comfortably in our great money wash.

Politicians Red and Blue love PEU and increasingly, more are one.

Update:  WaPo wrote about tech bros sudden love for Trump and the Red Team.  The Guardian did as well.

A Narya Capital affiliate is helping determine property values for Tom Green County, Texas. 

RNC's Last Day: Thank Heaven

The Red Team national convention closed with a "burn it down" song by Kid Rock before their "burn it down" candidate gave his "unity speech."  

Unity is an invitation to get in line behind a messianic Christian Nationalist and blindly follow him.  It's where there are no Red or Blue states because federal law won't allow state to state variation on issues important to his followers, like reproductive rights.  I still don't know how devoted Christians picked the least demonstrable follower of the Gospels.  They got an Old Testament "two eyes for an eye" kind of guy (because you have to hit back harder).

Former President Trump plans a second American Revolution should he win another term in office.  In this revolution money has free speech rights, the president is immune from criminal prosecution and property has voting rights.

The live forever, amoral tech bros have lined up behind Trump hoping to keep their gargantuan tax breaks. Federal law protects this insufferable group of pinheads from lawsuits from damage done by social media.  A columnist addressing Elon Musk's deleterious impact wrote about the

"...social dangers of endowing self-interested personalities with the money to buy unaccountable influence in conflict with the public interest."

Private equity underwriters (PEU) do likewise.  They've long played both sides of the political spectrum.  Keeping their highly unpopular preferred "carried interest" taxation has been a bipartisan effort.  So how can something the public hates go on for decades?

Once upon a time elected officials struck a balance.  Now they accept checks. 

The Red Team's tent is big, very big, even big enough to incorporate the whole country into their will, or else.  Unity becomes unity by "fight, fight, fight," by imposing one's will  That's the way of a monarch and I don't mean butterfly.

Remember politicians Red and Blue love PEU and increasingly, like J. D. Vance, are one.

The Blue Team confab is next.  

Lord, help us all.

Crowdstrike Delivers Plague Update

The cost of poor quality has worldwide implications as a Microsoft Windows Host update took down critical computer systems.  Crowdstrike delivered the plague update which has shuttered hospital computer systems.

The current self inflicted IT disaster should be a warning.  Can bad actors take the day off?  Nope, they are working to mine the response to the plague update, like post hurricane gas gougers.  

I wonder if AI produced code is in the disastrous"fix."  If not, my guess is that day will come.

Trump's VP Pick Portends PEUnity

Red Team presidential nominee Donald Trump announced his Vice President pick.  It's none other than Senator J.D. Vance, a former private equity underwriter (PEU) with Peter Thiel's Mithril Capital.  Mithril comes from J. R. Tolkein's Middle Earth writings.  It's a fictional metal with the potential for good or evil.  Thiel sponsored Vance in his political run. 

Thiel had given $15 million in total to bolster Vance — the largest amount ever given to boost a single Senate candidate.

So how does a first term senator rise to the VP slot?   By punching hard and raising lots of dough amongst his Silicon Valley bros.  Axios reported:

Vance's crown jewel is a fundraising dinner with Trump in San Francisco on June 6, led by tech investors David Sacks and Chamath Palihapitiya, co-hosts of the hot "All-In" podcast. Tickets start at $50,000.

David Sachs is speaking at the Red Team National Convention.  The Silicon Valley "live forever" bros have counted on Uncle Sam for liability protection for predatory social media.  They've enjoyed the Trump billionaire tax cuts and don't want to see them disappear into the sunset.  They've awakened to Uncle Sam funded disruptive technology, new drug development, fintech, crypto, AI, cybersecurity, electrical infrastructure, education, transportation, defense and anything the government can buy.

I heard a talking news person opine that Vance's appointment opens a Senate slot for Vivek Ramaswamy, another PEU.  

Politicians Red and Blue love PEU and increasingly, more are one.  Trump's bringing PEUnity.  Lord help us all.

Update 7-16-24:  And they will be served:

Government should restrain the worst of us, not cater to their wishes.  The guardrails are gone.  Welcome to feedom.

It was a big day for PEUs in Milwaukee.  Silicon Valley scion David Sachs spoke as did former Carlyle Group co-CEO and Virginia Governor Glenn Youngkin.  Even Red Team members can sense something in their gut:  Politico reported:

Despite his notoriety among SF elite, Sacks’ remarks on Monday night were met with a tepid response, at best. Many attendees talked over his speech, and several of his applause lines fell largely flat.

Viewers were treated to a MyPillow commercial in the middle of Sacks speech.

Governor Youngkin delivered his speech at full volume.  Will Ferrell's SNL character Jacob Silj came to mind.

Comical was Glenn's reference to "Made in America" given Carlyle's shipping thousands of jobs to China under his watch and his monitoring traffic in Beijing.

Update 7-17-24:  Other noted Red Team speakers with PEU backgrounds included Senator Rick Scott and Vivek Ramaswamy.  Three years ago Scott was cheering for the inflation he foresees in his Joe Biden nightmare.

Tonight the Mitrilic J.D. Vance speaks.  Good thing Mithril is malleable metal.  Trump requires others to bend back on themselves.  It's not unity if it's a demand from "someone who never backs down."

We are seeing the Red Team side of this:

Our oligarchy is the public face of the plutocracy.   An oligarchy is a government where the public discussion and agenda are significantly controlled by an elite minority.   A plutocracy is a government controlled by a few wealthy individuals. 

Politicians Red and Blue love PEU and increasingly, more are one.

...the US is ruled by a credentialed oligarchy, for the benefit of a wealthy few, then a lot of things will make better sense as you  look at them.

Voters may wish to look at a 2021 Vance interview where he suggests Alex Jones is right.

Update 7-18-24:   Vance emphasized:

“I will never forget where I came from,“ and, “We are done catering to Wall Street. We’ll commit to the working man. We’re done importing foreign labor.”

Done catering to Wall Street, door's wide open for the fintech boys.

Done importing foreign labor, what about foreign wives?  Hope his father-in-law doesn't hear about this position.

Update 7-20-24:  After Mithril Capital Vance went to Revolution (former home of Blue Team's Ron Klain) and established Narya Capital, which invested in Vivek Ramaswamy's Strive Capital.  It's a small PEU world after all.

Co-founded by Vance in 2020, Narya Capital is a reference to one of the “rings of power” in The Lord of the Rings. 

Narya was backed with about $US100 million from Thiel and a cadre of his acquaintances, including former Google chief executive Eric Schmidt and prominent venture capitalists Marc Andreessen and Scott Dorsey.

Vance is clearly high up in the ring of power.  This group takes more and more each day from the common person.

Family Office/PEU Does Secondary for Founder David Rubenstein

Buyouts reported that Declaration Partners founder and anchor limited partner David Rubestein sold a stake in the family office/private equity underwriter (PEU).  Rubenstein's family wealth arose from his co-founding The Carlyle Group.

The story suggested Rubenstein needed to cash in his Declaration holdings to fund his buyout of the Baltimore Orioles.  It also drew a distinction between Declaration Partners and Declaration Capital, something not noted by Crunchbase.  It reminded me of Carlyle's distancing from the carcass of Carlyle Capital Corporation, a rigor mortis canary for the Fall 2008 financial crisis.

Buyouts was not sure if StubHub equity was included in the secondary.  The firm announced today its postponement of its IPO.  Yesterday StubHub announced layoffs and a move from Utah to Atlanta, Georgia.  

Utah offices opened in 2017 to great fanfare when the company was owned by Ebay. Rubenstein et al bought StubHub in early 2020 prior to the COVID-19 pandemic.  

StubHub's Utah office closing will result in the loss of hundreds of jobs. A recent Glassdoor review revealed:

Not enough focus on product quality; some teams seem unbothered by shipping frustrating experiences.

• A poorly maintained development environment that yields nearly 2-minute wait times for incremental builds of the frontend.

• An incomprehensible performance review system that occurs “periodically,” with no accompanying compensation adjustments, no peer feedback, and no formal process for providing feedback to one’s manager.

• While discussion and debate among engineers are encouraged, senior management is sensitive to dissenting opinions. Some leaders view their positions as above discussion.

• Itchy trigger finger: you’ll meet a lot of people if you join because you’ll be losing teammates to termination, resignation, and reorganization on a regular basis. By the end of my time at the company, I saw my entire team dispatched within a year. I’ve been through reorganizations before, but I’ve never seen an entire team turnover in 12 months.

Consider adopting a performance review model that enables employees to provide feedback about their managers. This would promote a more balanced and transparent evaluation process, ensuring that management is also held accountable and can improve based on constructive feedback.

Now that's a PEU like work experience, no voice, no raises, bad systems/technology.

Rest assured David will walk away from StubHub.  The question is how much richer will he be for it?

Update 7-13-24:  Bloomberg ran a story on the crazy things the PEU boys are doing to push cash back to investors in a low to no flip environment.  And it all generates fees!

Gray Lady Highlights PEU Damage: Synapse & BeautyCounter

The New York Times shared two cautionary tales the last two days.  Yesterday, subscribers read about a missing "up to $96 million" from a fintech company that represented itself as an insured bank to customers.  Synapse, backed by Andreessen Horowitz, exists outside of any regulatory authority leaving customers without access to their funds and no legal recourse.  Did Synapse declare bankruptcy in an effort to avoid responsibility for the missing money?   A forensic accounting and software analysis is in order.  That should be completed before the company is wound up in bankruptcy court.

Andreessen Horowitz announced the establishment of an office in Washington, D.C.   

 

Today, NYT reported on The Carlyle Group's Humpty Dumpty like cracking of BeautyCounter.  Carlyle turned a multilevel sales force of 60,000 into 35,000 by changing (cutting) the pay structure.  New technology turned out to be unreliable.  Ordinary BeautyCounter people endured extraordinarily difficult things from private equity underwriter (PEU) ownership.

Carlyle founded in 1987 in Washington, D.C., the new home of Andreessen Horowitz.  Why D.C.?  Because politicians Red and Blue love PEU and increasingly, more are one.

Update 7-11-24:  Semafor held its Future of Fintech meeting and Synapse was a hot topic:

When Synapse filed for bankruptcy in April, it shut off a critical system, freezing hundreds of millions of dollars in deposits.  

The bank behind Synapse stated:

Synapse’s abrupt shutdown of essential systems without notice and failure to provide necessary records needlessly jeopardized end users by hindering our ability to verify transactions, confirm end user balances, and comply with applicable law.

Any insinuation suggesting that Evolve has intentionally mishandled or withheld funds is entirely false and defamatory.

Yet customers have been cut off from their funds for weeks.  It's clear Evolve did not have contingency plans for Synapse customers no longer able to use the forward facing interface.  

Evolve got ransom wared shortly after Synapse failed.  They state:

we have backups available and experienced limited data loss and impact on our operations.

I hope they have a backup available from close to the time Synapse imploded.  

Marc Andreessen and his Silicon Valley ilk like to break things.  That they did with Synapse's failure.  And the people in Washington weren't there to protect customers, i.e. the little people.  

Those who broke it should fix it.  

....discrepancies in Synapse’s records and a potential shortfall of $65 million to $96 million

Fintech's future should involve jail for bad actors.  Beware the middlemen wanting fees.