Nothing Wrong: PEU Edition

 NomDePlumber wrote on X:

"Nothing wrong with a Private Equity fund manager which owns an insurer, which sells annuities, which are backed with Private Credit loans, which finance the Private Equity fund manager portfolio companies, and which require capital protection against default losses, which consists of loss-absorption guarantees by offshore reinsurers, which the Private Equity fund manager also owns.

That sums up the current state of my lingering concern about private equity underwriters (PEU) being on all sides of a deal, charging fees for their multiple roles and setting up recurring payments via management fees, as well as special dividends/distributions.  

NomDePlumber's observation highlights the credit/equity side of PEU family churn, but it also occurs in operations as affiliates buy goods and services from one another.  I imagine AI is turbocharging PEU internal cross selling.  

AI is another opportunity for sponsor fee generation.  There's the fee for "parent AI services" and AI could be used to identify yet to be thought of new PEU fees for yet to be conceived products.

And the U.S. Treasury is supposed to backstop all of this when profit accelerating leverage reverses and becomes a capital destruction buzz saw?  Yes, Virginia that is the way Congress works.  Politicians Red and Blue love PEU (and their new TechGod brethren).  

AI Regulation: No Prophylaxis in Sight

The majority of people do not want AI and I am one.  

I am all for advancing knowledge, that from the creation of theory and the real world testing of that theory.  That is not AI, essentially a giant cauldron of inference using parameters.  

This interview opened my eyes to issues around AI development, that there literally is no code to examine and that the people wanting carte blanche to develop AI have a primary profit motive and are of the same ilk that gave us individual/society destroying "social media."

Why is it in the federal government's interest to usurp states rights on AI?

Because TechGods and PEU Legends want it.  Their profits are prioritized over our safety and general welfare.  

China "cannot" legally steal your intellectual property, but AI can "strip-mine the human expression and ingenuity" in copyrighted works.  

Trump II's revulsion for regulation comes at a very bad time.  AI needs more than guardrails.  It needs a few red lines.

If you want to learn more about the development path for AI view this video.

Update 6-30-25:  Fifteen risks of AI

Stephen Miller's Palantir Bayou

The Washington D.C. Swamp has morphed into a Louisiana Bayou where the spoils go to the "ethical in characterization only" Trump RICO operation.

Take Master Creep Stephen Miller who's child saw the incredible investment opportunity known as Palantir, an unobtrustive, instrusive spying company that cut its teeth protecting global tamperers (The Bliderberg Group).

I'm glad Miller's kid could see the future and know his dad wanted to build a dossier on all Americans.  "100 percent situational awareness!"  What a lesson for a young child.  

The question is how did the child get between "$1-$250,000" to invest in Palantir?  Unless it was a gift from Uncle TechGod Alex Karp.  That would raise a host of other issues.

Historically, the point has been to rid oneself of financial conflicts so "leaders" could focus on serving the people.  That eroded once both political teams focused on giving preferred insiders "base wealth" form the private sector that gave them financial security to enter government and enact change benefiting their major donors.

Politicians Red and Blue love PEU (private equity underwriters - policy making billionaires) and their TechGod brethren, so much so, they hold their stock.  Democracy has a leech impediment that repeats itself on multiple levels.  Suck information, produce profits, order more information sucking, stock price goes up, government officials net worth goes up....

Leeches were common medicine at the founding of our country.  It's fitting they are back strong in Washington D.C., now Bayou Zizi.

The PEUtification of Iran

The Carlyle Group's Admiral James Stavridis and 8VC's Joe Lonsdale want to invest in Iran.  TechGod Joe told CNBC said he is really excited to invest in Iran.  Stavridis noted in a Semafor interview:

And then if we do get to a serious ceasefire, which I think is not impossible at this time, what is the big investment opportunity in the Middle East? It could be Iran. There’s a lot of chaotic movement, but the potential of this country that’s two and a half times the size of Texas, 90 million people, demographics vertical, highly educated, a culture that’s deep and strong, they believe in themselves as Persians. If you follow the geopolitical trends to a happy ending, which is not impossible, Iran becomes a very interesting investment opportunity. It could look like the reconstruction of the Korean peninsula after the end of the Korean War.

It would be a natural fit for a politically connected private equity underwriter (PEU) like Carlyle to open an office in Tehran.  TechGod Joe Lonsdale's Palantir could take over spying on citizens from the mullahs.

PEU Legends and TechGods remaking Iran in the image of U.S. oligarchy?  It'd be a spectacular PEUtification, "something like no one has ever seen before," if they had not been looking in the American economic/government mirror every single day for the last two decades.

ProCap Joins Bitcoin Pump

Peter Atwater called the Procap Financial/Columbus Circle Capital Corporation deal "financial alchemy" as it combines two shaky ventures, a SPAC and a Bitcoin Treasury.  

The deal is interesting as the Columbus Circle SPAC is sponsored by Cohen & Company and managed by Cohen & Company executives.  Cohen & Company also serves as the "exclusive financial advisor" for the surviving entity, Procap Financial, and was a "co-placement agent in connection with the Preferred Equity Raise and Convertible Debt Raise."

The greed and leverage boys like to be on all sides of a deal, equity, debt, investment bank, financial advisory.  Nothing is arm's length anymore.  It's all bear hug. I believe they call it "fee earning synergy."

Peter Thiel, one of the greatest digital, libertarian alchemists, is backing the deal.  Rose Park Advisors and Fifth Down Capital. both Boston venture capital firms, invested alongside Thiel Capital.

The combination includes a preferred equity raise and convertible note sale.  Firms participating in those include:

Magnetar Capital, Woodline Partners LP, Anson Funds, RK Capital, Off the Chain Capital, Parafi, Blockchain.com, Arrington Capital, BSQ Capital Partners, and FalconX

Procap put that money to work already.   The yet to be combined firm bought $387 million worth of Bitcoin.

... the announcement notes that the TWAP for this purchase may differ from the “signing bitcoin price” referenced in the June 23 Business Combination Agreement between CCCM and Procap.

And who gets to pocket that?  I assume if it was going to cause a loss then the purchase would not have been made.

It all seems so loose.  But that is par for the course under Trump II, the digital Caligula.

AI: "It's Eating the Brain" as Well as Jobs

CEOs warned recently about AI eliminating jobs for humans, even those they promised in return for economic development funding.  

Former Microsoft founder Bill Gates believes AI will replace teachers and doctors.

All that sounds concerning to people wanting to be gainfully employed.  Two recent stories serve as counterbalance.  TechGod Elon Musk is redoing GrokAI because of "too much garbage."

For AI to purport to be the "correct version of human knowledge" is the usual TechGod blather.  

What does AI do to people's ability to learn and problem solve?  Just as social media made people anti-social:

A study showed artificial intelligence to harm the brain and its ability to conduct critical thinking.

AI is eating the jobs and also your brain.  So don't follow TechGod Reed Hoffman's coaching for the unemployed to use AI.  It could make one a very dull candidate.

Summa Health: Ohio Follows Massachusetts & Pennsylvania

The State of Ohio approved the sale of Summa Health to General Catalyst, a venture capital firm.  HealthExec reported:

It’s not entirely clear how business operations at Summa Health, a nonprofit, will change.

General Catlyst's CEO made it clear Summa would be the venue for its healthcare AI and other related services provided by fellow GC affiliates.  A press release referred to its "Silicon Valley's innovation engine."  Yes, the engine that includes intellectual property theft and replaces people with chatbots prone to hallucination, when not providing "garbage out" from "garbage in."  GC just put another $200 million into healthcare AI affiliate Commure.

VC's tend to swing harder for the fences than private equity underwriters (PEU).  The disaster of Massachusetts' Steward Healthcare under Cerberus Capital Management ownership was chronicled over a decade (Forbes).  A similar but much faster implosion occurred at Hahnemann Health in Philadelphia under Paladin Healthcare Capital (New Yorker).

The Carlyle Group, a politically connected PEU, sank ManorCare, a giant nursing home chain.  It did so under the watchful eye of former Medicare Chief Gail Wilensky.

Summa will be ground zero for the transformation of "healthcare as medicine" to "healthcare as software", no doctor needed.

Not mentioned in any article are the equity stakes Summa executives will obtain when the nonprofit switches over to a for-profit.  That conflict of interest is rarely identified prior to any takeovers.  It arose with Steward over time as several dividend bleedings sent big money to CEO Ralph de la Torre, M.D.

How can this happen yet again?  Politicians Red and Blue love PEU (and their new TechGod brethren), and increasingly, more are one.

I encourage Summa Health staff to buckle up.  VC firms operate their mechanical bull at level 10, while PEUs tend to be at level 8.  That means more bullshit slung and at greater distances.  Duck if you see Commanure flying at you.