Fresh Air reported:
The place where you buy your coffee and doughnut, your child's pre-K learning center, your loved one's nursing home, your dentist or dermatologist's office, the ER and the ambulance that took you there and your pet care provider may be owned or overseen by plunderers. That's what my guest Gretchen Morgenson writes in her new book. The plunderers she's referring to are private equity firms, PEFs, which typically buy companies, then lay off employees and cut costs, services, benefits in order to expand profits. The ultimate goal is to sell off the newly acquired company in a few years, scoring a big profit for the PEF. But it's hard to know whether a company is owned by a private equity firm because PEFs are shrouded in secrecy. Their business model, Morgenson says, widens the income gap by extracting wealth from the many to enrich the few.
"PEF" equates to private equity underwriter (PEU), my pet name for the greed and leverage boys.
The interview hits on a number of PEU targeted industries.
Retail - "Private equity firms have savaged the retailing industry in recent years....these firms always look for assets that a company owns that they can strip, that they can peel off and sell and generate revenues that way. So retailing was an enormous focus of private equity firms. And in fact, over two decades, ending in 2020, there were 542,000 jobs lost among retail workers because of private equity firms buying them."
Healthcare - "A recent study found that 30% of private hospitals in the country are owned by private equity. So you are talking immense numbers. Now, we just don't know how many dermatologists, anesthesiology firms, but they have been taking over doctors' practices and amassing them into, you know, large groups. So the takeover has been stealth, but it has been dramatic....the push for profits is absolutely immense. And so I've spoken to many people who have been in the middle of these situations and they just find it to be intolerable and ultimately leave."
Pensions and 401(k)'s:
GROSS: So you have public employee money being invested in private equity firms, which are cutting jobs, cutting benefits for other employees.
MORGENSON: That's right. That's right. Now, you also have - private equity firms are really trying hard to get your 401(k) money, OK? They understand that that's an enormous pot of gold for them. And if they can get access to, you know, the vast majority of people's 401(k)s, then they will be very happy because their fees are very high, and they can actually extract from the 401(k) holder the fees. They also had very high fees in the pension funds.
My wise friend had a few gems that fit the PEU theme.
All funded by the people they are trying to replace and to minimize, i.e. labor retirement funds. Talk about a kick in the ***
So what the Fed has actually allowed to happen is they are supporting high valuations for the select few to capture fees not associated with the reality of their positions or assets under management while the plebeians, the masses have salaries that are not keeping up with the cost of living pushing more and more people behind the ball and allowing these guys to maintain lifestyles that are actually unjustly deserved . The crowding out effect this time it's gonna be about people not being able to maintain the income to support the standard of living as things become out of reach for the many.. How about those Apple Mac Pros 7 grand ... Is that a two or four seater ? Holy cow!
Our hypocrisy on a number of fronts is only surpassed by the discrepancy in our GINI ratio engineered by the same policy makers and business goals piloting our vessel or is that the vassal?
Did catering to the greed and leverage boys engender any loyalty?
..there is no alpha in public markets yet his private market marks have yet to CLEAR ? I'll say one thing about Saudi Arabia, they really improved their infrastructure and they're really preparing for the future And all the big boys from here have jumped over there... Who's leading our ship?
Ironically our ship is led by politicians Red and Blue who love PEU and increasingly, more are one. Turn over a rock in Washington, D.C. and you'll find a PEU.
Take Hunter Biden. Here's his PEU track record
2006 Paradigm Global Advisors
2008 Paradigm Stanford Capital Management Core Alternative Fund
2009 Rosemont Seneca Partners co-founder
2009 Eudora Global founder
2013 Bohai Harvest RST (Shanghai) Equity Investment Fund Management Company.
The Red Team is just as conflicted. Both political teams have promised to eliminate private equity's preferred "carried interest" taxation but it still exists. Some promises to remove unjust things are just campaign slogans.
Update 8-18-23: Jesse's Cafe Americain wrote
Soft corruption is growing ever brazen, and pervades the corridors of power in the US.
Ignoring these things gives rise to vocal groups who will use it as an excuse for almost anything, any crime, betrayals, greed, cowardice, and eventually murder, in those public figures that flatter them and fatten their wallet.
The events of this young century confirm this. History suggests that is the way to national madness.
I am not sure where we're going, but we're on our way.
