Wednesday, April 6, 2022

Davos in 45 Days

The annual meeting of global tamperers, greedy executives and subservient politicians will be held in Davos, Switzerland from May 22-26.  Corporate executives and private equity chieftains buzz in on private jets in search of dislocation to lever.  In 2022 they haven't had to look far.  Dislocation is everywhere and it stands to take down a precariously situated affiliate or two.  

KKR's General David Petreaus and Carlyle's Admiral James Stavridis are working overtime to sort out global changes for their respective private equity underwriters (PEU).  With crisis comes opportunity.  That means gunning for outsized PEU profits. 

Davos deals historically involved gobs of money triggering absurd levels of executive and PEU compensation.  2022 may be different as interest rates rise and inflation blows a hole in the common person's finances, the engine of the U.S. economy.  

Rising rates make rolling over PEU affiliate debt more challenging.  The Carlyle Group is pushing its second Credit Opportunities fund to buy discounted corporate debt.  One way to garner new affiliates is through bankruptcy.  Carlyle took over Mrs. Fields and Brintons' in such a manner.  Brintons' founding family had nothing nice to say about Carlyle in 2011.  I'm sure Brintons' pensioners felt likewise.

The promise of globalization was cheap goods would extend your dollar further.  That made decades of no to minimal raises more tolerable.  All along the way globalization players (corporate executives, politicians and the finance industry, including PEUs) found ways to enrich one another massively.  Thus, they are in position to weather the inflation storm and offer ridiculous, insensitive statements on a widespread basis.  

That bill of goods is long gone and a number of people I know are severely struggling to get by.  Homes are being turned over to banks.  Cars are repossessed.  Health insurance is unaffordable, so risks must be taken.  

The World Economic Forum Annual Meeting will provide the opportunity to learn where global tamperers have migrated in their thinking.  They pretended to be concerned about income inequality, but the problem has magnified under their watchful eye.  

Just as friends are handing over car and house keys to creditors, will the PEU boys do likewise with affiliates?

Update 4-7-22:  The theme for Davos is "The Great Narrative."  I've seen leaders use narratives, i.e. lies and distortions, to enhance their wealth and personal power, regardless of harm to others.  The theme for the annual gathering of global tamperers should be "The Selfish and their Great Manipulation."  

Globalization failed on its promise to provide an endless supply of cheap goods.  Technology will fail to solve our planet's greatest problems because our issues are based in broken relationships (selfishness, greed, arrogance, inequity, dismissiveness, and inability to listen).  Automating toxic human interactions for the sake of money is the singular achievement of most tech.  

Update 5-5-22:  The PEU "public pension savior" narrative may burst if one New York Assemblyman gets his wish for PEUs to reveal their contracts and fee arrangements with New York's public pension funds.  

Update 5-18-22:  Three days until the Swiss gathering of global tamperers.  The WEF description of the meeting includes:

Against a backdrop of deepening global frictions and fractures, it will be the starting point for a new era of global responsibility and cooperation.

Hardly.  The Davos crowd is mostly there to be seen and conduct deals.  Greed for more money and more power, that's the lot that attends.