Alpha Males at FII7

CNBC reported:

Carlyle Group CEO Harvey Schwartz stressed the presence of alpha opportunities even in the face of high interest rates and geopolitical conflict.

Harvey Schwartz had an "alpha male" reputation prior to Carlyle hiring him as CEO.  His alpha attitude came through loud and clear in the FII7 interview.  

After giving a PEUmercial for Carlyle's financial offerings Harvey schooled the interviewer:

Interviewer:  "I want to do a rapid fire round if we can." 

Schwartz:  "I thought that was really my job.  I didn't even know I was scripted for that, but I'm glad I fulfilled that for you."

Interviewer: "Ha, hah"

I wonder if Schwartz would have given David Rubenstein the same treatment?  Rubenstein served as interviewer for the Jamie Dimon, Stephen Schwarzman et al PEU panel.

It was interesting to hear all the references to the intelligence in the room at FII7 and how that would change the world for the good.  

The "Davos in the Desert" group has been changing the world to increase their power, their pocketbook and enrich other members of their exclusive club.  

China used the PEU boys and its Saudi Arabia's turn.  Crown Prince MBS plays by his own rules and they can change in an instant.  The greed and leverage boys should enjoy it while it lasts.

The smartest people are needed to stem a looming conflagration in the Middle East.  So far, the language is of retaliation at increasing orders of magnitude.  That kind of "rapid fire" usually leads to something bad.

Update 11-1-23:  Effective altruistic (changing the world for the good) Sam Bankman-Fried, another brilliant person, is unable to remember many actions he took as CEO of FTX.  Temporary memory failure is not unusual among the insider crowd.  Texaco/BP's Lord John Browne and Ivanka Trump had similar lapses.  The common element:  a courtroom.

A NASA climate scientist who predicted weather impacts from increased greenhouse gas emissions stated he:

"cannot help but feel “a sense of disappointment that we scientists did not communicate more clearly and that we did not elect leaders capable of a more intelligent response.”

Those elected leaders listened to the PEU class, supposedly the most intelligent people, the very people attending FII7 to get access to Saudi money. 

Update 11-7-23:  Schwartz has cut costs at Carlyle as the PEU under performed relative to peers on fundraising.  FT reported:

When pressed by an analyst to outline new financial targets for Carlyle, Schwartz declined to give a specific timeframe, stating his review of the group was ongoing.

Update 11-16-23:  The Carlyle Group cut its latest Asian fund target from $8.5 billion to $6 billion.

MBS Hosts Policy Making Billionaires

The Future Investment Initiative or "Davos in the Desert" met this past week in Riyadh, Saudi Arabia.  Crown Prince Mohammed bin Salman heads the country's sovereign wealth fund, essentially the power behind the event.  The seventh version's theme was "A New Compass."  A graphic showed a compass with two dials going in opposite directions.

America's policy making billionaires turned out in droves, even with the Israel-Hamas war raging.  Many stayed away after the murder of Washington Post journalist Jamal Khoshoggi.  The Carlyle Group's David Rubenstein served as a panel moderator.   

J.P. Morgan's Jamie Dimon, BlackRock's Larry Fink and Blackstone's Stephen Schwarzman served on that panel.

Schwarzman took a shot at people working from home.  He wants people back in the office to prop up Blackstone's commercial real estate holdings.

The greed and leverage boys turned out for the Crown Prince's signature event.  How will what was discussed in Riyadh turn into U.S. government policy?  Stay tuned.

MBS and the PEU boys get their way while everyone else gets a different form of MBS, mighty bowel syndrome. How much pressure can the little people stand?

Update 10-29-23:  National Security Advisor Jake Sullivan will meet with Saudi officials tomorrow on the Israel-Hamas war.

CNBC ran this story just after the gang was in Saudi Arabia for the MBS Investfest:

Update 10-30-23: Saudi Defense Minister Khalid bin Salman, the brother of Crown Prince Mohanned bin Salman is in Washington, D.C. to meet with White House officials on the Israel-Hamas war.  KBS will meet with Defense Sec. Lloyd Austin and Secretary of State Anthony Blinken, both former PEUs with Pine Island Capital.  

Update 10-31-23:  A theme of FII7 was how the people in attendance are some of the smartest people on the planet.  They're needed elsewhere to solve an intractable conflict, not far from Riyadh.

World Champion boxier Tyson Fury is the latest sports celebrity to endorse Saudi Arabia.  His next two fights will be there and Fury will get a whopping £160m for his efforts.

Update 11-2-23:  The scientist who warned about global warming in the 1980's expressed:

“a sense of disappointment that we scientists did not communicate more clearly and that we did not elect leaders capable of a more intelligent response”.

The 80's birthed a number of private equity underwriters (PEU), now referenced as the intelligent people who are going to solve our problems and the people who influence government policy (much more than scientists).   In the U.S. politicians Red and Blue love PEU and increasingly more are one.

Believing in Freedom: PEU Style

Someone recently said:

"I believe in Freedom and I'm delighted to join..."  

Was it a Red Team candidate for Speaker of the House?  No.  

A Presidential contender?  No.  

A Supreme Court Justice?  No.

It was Sue Gordon, former Principal Deputy Director of National Intelligence and former Deputy Director of the National Geospatial-Intelligence Agency.

Freedom is Freedom Consulting Group and Gordon just joined their board of directors.  Freedom is a new affiliate of WGD Capital.  

WGD doesn't stand for "What would Greed Do?", although it easily could.  It's an acronym, the initials of several super rich investors.

Sue Gordon wasn't the only new board member.  General Michael Hayden and Tom Donohue (the D in WGD) will also join Freedom's board.  

With additional financial resources, the company will also explore selected acquisitions to expand capabilities and customer segments. The additions to the Board of Directors will provide national security expertise and strategic insights to support the planned growth.

They will also provide non-lobbying political connections (should Uncle Sam's assistance or wallet be needed). 

I found this obscure story while researching the fake fight between Senator Tommy Tuberville and General Michael Hayden.  Hayden delivered an insult to Tuberville for holding up military promotions in a time of instability.  Tuberville fumbled the insult, so badly he harmed himself.  Embarrassed over his clumsiness the Senator turned the insult into a "death threat."  (Maybe South Park can do something with that.  They did make a cripple fight palatable.)

The "death threat" story sent me researching the parties new PEU ties.  I'd already written about Hayden's Chertoff Group and Tuberville's TS Capital (which imploded in a fraudulent fireball that somehow spared Coach Tommy).

Hayden's new board appointment led to Sue Gordon's "Freedom" quote, the unexpected nugget in that research.

“I believe in Freedom, and I’m delighted to join such esteemed colleagues on this board.”

That sums up our PEU world where politicians Red and Blue love PEU and increasingly, more are one.

Clarence's RV Angel

News reports indicate Clarence Thomas' was gifted ownership of a $267,000 recreational vehicle.  Anthony Welkins provided an "interest only" loan to Thomas which was forgiven in 2008.

Thomas' benefactor went on to serve on The Carlyle Group's Board of Directors.  Carlyle is a politically connected private equity underwriter (PEU).  Welters is Executive Chairman of BlackIvy Group, another PEU.  

Carlyle located in Washington, D.C. to pull the political levers of influence and tap Uncle Sam's wallet.  I assume BlackIvy Group had a similar motivation.

Politicians Red and Blue love PEU and increasingly, more are one.  PEUs provide significant fuel for the insider money funnel.  Supreme Court Justice Clarence Thomas is but one beneficiary.

China Threat: PEU Enabled

60 Minutes interviewed intelligence chiefs from the U.S., the United Kingdom, Canada, Australia, and New Zealand.  FBI Chief Chris Wray spoke about the Chinese "stealing more of personal and corporate data than every other nation combined."

Flashback to 2005:

....TPG, Newbridge Asia (an Asian affiliate of TPG) and General Atlantic teamed up to buy into Lenovo in 2005 to help strengthen the Chinese firm’s financial position at the time of its takeover of IBM's PC business.

Note: the former CEO of General Atlantic currently heads the World Bank.

The three private equity underwriters (PEU) cashed in their stakes in 2010.  I noted national security concerns that same year.

Turn to 2014:

 Lenovo bought IBM’s server business in 2014.

Google said it plans to sell the Motorola handset business to Chinese computer maker Lenovo Group Ltd.

The acquisitions were ultimately cleared by CFIUS.

WaPo reported on a schism inside the U.S. government on whether Lenovo products were safe to use.  The State Department and Air Force indicated they were not safe due to espionage concerns. The article said:

Lenovo tapped celebrities such as Kobe Bryant and Ashton Kutcher as spokesmen to broaden its appeal.

Recall that tens of thousands of U.S. jobs were sent to China in the 2000's and 2010's.  Virginia Governor Glenn Youngkin helped The Carlyle Group send auto parts manufacturing jobs to China.  

Carlyle and the Chinese government reached an accord.  A former major business reporter wrote in 2011:

I can't tell if the PE guys are being insincere when they talk about China or they are actually stupid. There is no way that the Chinese govt would let American firms come in and strip cash out of Chinese companies the way they've been allowed to in the US! I imagine the Chinese welcome the PE guys because they see it as another way (through PE orchestrated mergers) to get hold of more American technology and companies and jobs.

What is going on with the theme of the article that these guys never agree with each other? As if there are these deep philosophical differences in how they operate?!? Makes one just despair.

People spoke up along the way, Mr. Wray.  And we continue speaking.  Please aim the Five Eyes at the PEU boys.  Scrutiny is needed.

Update 10-24-23:  A decade from now the Five Eyes will be concerned about this:

"Powerful generative AI spyware in any location where data is created...." 

Update 11-16-23:  "PE firms trapped in China after $1.5 trillion spending spree" (Bloomberg) 

Private equity firms are struggling to sell China affiliates.  Reports say secondary buyers are demanding discounts of 30 to 60%.  Discounts in the U.S. and Europe run 10 to 15%. 

FII 7: Davos in the Burning Desert

Saudi Arabia's Future Investment Initiative (FII) kicks off its seventh iteration this week, October 24-26.  The FII is part of Saudi Arabia's sovereign wealth fund, headed by Crown Prince Mohammed bin Salman

It started in the wake of Crown Prince's shakedown of royal family relatives and business leaders.  Western leaders set that aside until the murder of Washington Post journalist Jamal Khashoggi.  

The murder marred attendance at the Crown Prince's October 2018 "Davos in the Desert."  By 2019 many were ready to "move on."

The pandemic disrupted things for the next few years but the Crown Prince wants to reorient the globe with Saudi Arabia at the center.  It launched a series of measures to help governments in 2021.

The Kingdom has been pursuing a deal of the century peace with Israel that would benefit Palestinians.  It sounds similar to the economic peace White House advisor Jared Kushner pushed under his father-in-law's White House.

FII 7's agenda shows a plenary session:

"Compass Point:  Is Democracy in Peril"

There are four more compass points on the agenda.  They include:

• Charting the Uncharted
• A Blueprint for Multidimensional Leadership
• Geopolitics of Tech Investing
• Navigating Megatrends

That gives FII a five point compass.  The meeting has a number of interesting breakout sessions.  One is "How to Democratize Crypto Investing."  Wasn't democracy just in peril?

Other sessions include:

KPMG is a serial ethics abuser, having recently settled a £1.3 billion lawsuit over shoddy work on Carillion audits over a nineteen year period.

Fortunately, those attending the Crown Prince's soiree need people to funnel them more money, add to their power/influence and eventually give them eternal life or a means off the planet they helped ruin.

Remember the real "Davos Men" have been working on income inequality since 2015.  They never shared they were only addressing "the have" side of the equation.  

That brings us to the Crown Prince's "Davos in the Desert."  It's literally on fire.

Update 11-5-23:  The United Arab Emirates censored a John Oliver episode on McKinsey and its role advising the Saudi government.  The UAE broadcaster edited out the portion referencing the murder of journalist Jamal Khashoggi in a Saudi consulate.  

“Criticizing the royal family, criticizing the crown prince in Saudi Arabia is a terrorist offense and you can be prosecuted for terrorism."

And the terror the Saudi royal family inflicts on its citizens?

South Park and Carlyle in Loan Talks

The Carlyle Group is in talks with South Park creators for an $800 million loan (Bloomberg).

The loan to Park County, a media company created by Trey Parker and Matt Stone to manage their various assets, would be backed by the intellectual property from the hit TV show....

South Park has a rich history of tackling the unsafe:

"I remember thinking "this is so wrong", but at the same time couldn't stop laughing. South Park at it's best." 

Which makes it a great fit for a politically connected private equity underwriter (PEU).  I wonder if Carlyle co-founder David Rubenstein sees any historical parallels with South Park's "cripple fight" and the current turmoil within the Red political team around a House Speaker?  

It may become the subject of Carlyle's "Remembrance of Things Past."  Carlyle's Jason Thomas helped advise the White House into the Fall 2008 financial crisis.

The White House, National Economic Council, Washington, DC
Special Assistant to the President for Economic Policy and Director for Policy Development, 2006-2008

In this capacity, Mr. Thomas acted as the primary adviser to the President for public finance.

Carlyle's South Park loan, should it go through, likely ensures the show will never do an episode mocking the greed and leverage boys.  There will never be a Jason character fretting over the collapse of the global financial system outside the Oval Office.  There will never be a David character strolling through the halls of Congress non-lobbying lobbying to keep his preferred "carried interest" taxation.

I wonder how the investment did under Carlyle's ESG scoring, especially their social and human capital dimensions?

Update 11-4-23:  Carlyle's Jason Thomas authored a report "Brave New World AI and Its Downstream Implications."