Bob Rubin Goes Full Circle on CDS

An economist commented on Bob Rubin's joining Centerview Partners. He stated:

Saw your post on Rubin/Centerview. I didn't realize that they were advising AIG.

This brings the entire CDS crisis full circle, with Rubin on all ends. Goldman, where Rubin was CEO, buys CDSs through AIG (which Rubin is now advising through CrestView), Goldman buys protection against AIG going under, from Citi (when Rubin was there). Amazing.

Yes, it is.

Bob Rubin would defend himself, citing that he always thought derivatives should be regulated. History shows little evidence of Bob's fighting for supervision. Rubin and Summers resisted Brooksley Born's attempts to regulate derivatives.



President Bill Clinton said he got lousy advice from the pair, but that came with the benefit of hindsight. Ironically, Clinton dissed Goldman Sachs (Rubin's old firm) for selling stuff with "no underlying merit."

Yet, derivatives made Goldman big money.

The nation's five largest banks together earned $23 billion from derivatives trading in 2009.

That's after the financial meltdown. It seems Bob Rubin, Bill Clinton and derivatives have something in common. All are hard to control, adaptable & remarkably profitable.

PEU's Strong Wallet Australia, Middle East & U.S.

Tax uncertainty drives private equity dollars. Carlyle Group's managing director in Australia had this to say about his country's tax environment:

"Our investment committee is facing a global opportunity set and trying to allocate capital on that basis," Simon Moore said. And where there was uncertainty, "you have to take a worst-case scenario as to what the tax outcome will be".

Similar words were offered regarding the Middle East, specifically Arab Gulf states in the Gulf Cooperation Council (GCC):

"We need to see some investments, we need to see the macro environment improving, we need to get the families on board," said Jeremie Le Febvre, partner-in-charge of Middle East and North Africa (MENA) at Triago, a private equity adviser.

"A combination of all these factors will make the Middle East quite attractive because right now the message to investors is quite blurry," he said.

Before the global financial crisis erupted, iconic private equity firms from across the globe such as KKR and Carlyle Group set up shop, attracted by the region's petrodollars and spectacular growth prospects.

The risk now is that without reforms to spur the sector, such firms will go back to viewing the region mainly as a source of capital and not an investment destination.

America rings a similar refrain. Obama's Deficit Commission wants to make the U.S. more competitive in a global economy. That includes tax policy. Erskine Bowles, Commission co-chair, cited his need to make another fortune, having lost his last one. Rest assured that Bowles will do his best to help fellow private equity underwriters (PEU's).

BankUnited Planning IPO

The Carlyle Group, Wilbur Ross, Blackstone Group and Centerbridge Partners selected underwriters for a BankUnited independent public offering (IPO). According to Bloomberg underwriters include Bank of America, Deutsche Bank AG, Goldman Sachs and Morgan Stanley.




The FDIC recapitalized BankUnited via a $4.9 billion subsidy. Carlyle and company have owned BankUnited 15 months. Recall concerns over private equity underwriters holding banks a short period of time before cashing in? Where does 15 months fit?

Once public, will BankUnited acquire other banks? Let the government supported windfalls continue. It's a shame some people are making big money off public assistance.


Update 9-12-10: Bloomberg reported on "plans to raise more than $500 million" via the IPO, said people with knowledge of the matter. The initial public offering would raise capital for acquisitions, while "returning some cash to the owners."  WSJ reported on who got rich from BU's IPO.

Bob Rubin PEU

Robert Rubin, former Treasury Chief and CitiGroup Chairman, will join Centerview Partners, an advisory and private equity firm based in New York. His role will be part-time counselor.

Centerview was formed in 2006 by three former Wall Street executives. They currently advise the government on AIG and a founder suggested temporary corporate tax relief in an op-ed.

The boutique firm has a private equity division. Bob Rubin joins legions of ex-government officials as a private equity underwriter (PEU). Is cuddling in his job description?

GM's New Part Time CEO?

Board member Daniel Akerson is in line for GM's CEO seat. Akerson serves on seven boards and is Managing Director/Head of Global Buyout for The Carlyle Group.

A large blot on Akerson resume is XO Communications. That bankruptcy and the Wall Street crash caused Erskine Bowles to search for a new fortune. Bowles gets to steer favorable investment tax policy as co-chair of Obama's Deficit Commission. Like Bowles, Ackerson is handsomely compensated for his board work. His 2009 pay and stock holdings were:

American Express- $232,924
GM- $93,111 for 5 months of work
Booz Alllen Hamilton- not available, private company
HCR ManorCare- private company
MultiPlan- private company
Freescale Semiconductor- private company
The Nielsen Company- private company

Ackerson holds 75,067 shares in American Express, valued at $3.1 million.

Does Daniel Akerson have the skills for the job? GM has four subsidiaries in the Cayman Islands, much like Carlyle Group. Daniel would take GM public. Carlyle has experience with IPO's, considering their great "cash-in."

Ackerson can manage under today's greed model. My question is did taxpayer recapitalization turn the CEO position into part-time work?

Update: Ackerson is leaving Carlyle. No word on the board slots. He did get a whistle serenade at his Carlyle departure.

Update 2: President Obama was briefed on the change at GM, and praised Akerson's appointment.

Ben Quayle: Chip Off the Old PEU Block

Arizona Republican Congressional candidate Ben Quayle wants to "knock the hell out" of Washington. The 33 year old son of Vice President Dan Quayle knows Washington well. He grew up there.

Ben Quayle was born two days after his father, Dan, was first elected to Congress, and remembers well tossing a football with him on Capitol Hill between votes. He could have lived without the constant mocking of his family — particularly the whole potato thing — but his memories of Washington are largely gauzy and pleasant.

A childhood in Washington was all he really knew. “It was my life,” he said, “It was difficult at the center of attention but all in all it was a great experience.”

What credentials does Ben bring? One, he can rate hot Arizona women. Two, his voting fingers are fresh, i.e. used twice since 1997. Three, he's intimately connected to the Washington he dislikes so greatly. Quayle's donors include:

Andy Card, Chief of Staff for President George W. Bush
Nicholas F. Brady, Former Treasury Secretary
Bob Dole, Former Kansas Sen. and 1996 GOP presidential nominee
Elizabeth Dole, Former North Carolina Senator
John Sununu, White House chief of staff during Dan Quayle’s first three years as vice president;
William Cohen, Former Clinton Defense Secretary
Pete Wilson, Former Senator and California governor
Donald Rumsfeld, Former Defense Secretary
President George H. W. Bush and wife Barbara hosted a fundraiser for Ben in their Houston home

And four, Ben Quayle is managing director of Tyndale Capital, an investment firm he started with his brother Tucker. They founded the firm in 2007. Bloomberg described the firm as "engaging in capital markets." It is a virtual black hole of information with no website or logo.

Father Dan Quayle is Chairman of Cerberus Capital's Global Investments. Father and son joined at the Southwest CEO 2009 Summit where Dan spoke to 280 executives. How many CEO's lined up to meet Dan? How much "capital management" business did he steer to Ben?

Who provided the seed money for Tyndale Capital? Did members of the club pitch in to give Ben a few million to manage? Are these Ben's training wheels, like George W. Bush's Harken Energy and CaterAir board positions?

While Ben kicks the hell out of Washington, father Dan turns nonprofit community hospital systems into the for-profiteering variety. The world's gone flippy floppy.

For proof look at Dan's resume (from page 5 of Heckmann Corporation's 2009 proxy statement):

President George H.W. Bush named Mr. Quayle to head of the Council of Competitiveness, which worked to ensure America’s international competitiveness in the 21st century.

In 1999, Mr. Quayle joined Cerberus Capital Management L.P., one of the world’s leading private investment firms, with over $27 billion in committed capital and offices in New York, Chicago, Los Angeles, Atlanta, London, Baarn (The Netherlands), Frankfurt, Osaka and Tokyo, and currently serves as chairman of Cerberus Global Investments. As chairman of Cerberus Global Investments, Mr. Quayle has been actively involved in new business sourcing and marketing for Cerberus in North America, Asia and Europe.

The growth of private equity during the Bush II years coincided with the shedding of millions of American jobs. The head of the U.S. Council on Competitiveness is business sourcing in Mexico, Canada, Asia and Europe.

Heckmann's latest 10-K states:

Headquartered in Palm Desert, California, the Company was incorporated in Delaware on May 29, 2007. We began our corporate existence as a blank check development stage company. On November 16, 2007, we completed an initial public offering.

Heckmann has eight bottled water facilities in the People's Republic of China.

Father Quayle held roughly 600,000 shares of Heckmann. I smell a PEU, a politically-connected private equity underwriter. Early signs indicate, like father, like son.


Update 11-7-10:  Ben Quayle will return to Washington.   President George W. Bush and wife Laura contributed to Quayle's run.  Condi Rice chipped in, as well.

Update 6-25-19:  Father Dan Quayle's Cerberus Capital brought back securitized home equity loans.

Disgraced Hurd Attractive to PEU's

Former HP CEO Mark Hurd is attractive to private equity underwriters say professional recruiters. Hurd lost his job for lying on expense reports and sexually harassed a private contractor. Bloomberg reported various head hunters saying:

He’s too radioactive.

Step one is to repair himself and his family personally. Step two is his public image.

He will be very attractive to private equity.

Hurd might be a good fit as CEO of First Data Corp. What First Data needs is some heavy-duty cost-cutting and that is what Mark Hurd is good at.

Ironically, HP recently purchased Palm from a PEU, Elevation Partners. Will U2's Bono give Hurd a good reference?

Hurd on the street, What can Browne do to you?

The ethically challenged congregate together. They certainly have one another's back. Ask Lord John Browne. Lucky to make purgatory in the afterlife, Browne's career resurgence is complete. The Carlyle Group/Riverstone Holdings Managing Director is remaking WhiteHall, British government services.

PEU's infect corporate board rooms and America's hallowed halls of governance. Ethics are so passe.