Rubenstein Rubs Crypto Lamp

Billionaire David Rubenstein said the crypto "genie is out of the bottle."  Rubenstein said crypto was "here to stay" in May 2021 after investing in Paxos through his family office in 2020.  The Carlyle Group co-founder's three wishes are for more money, more money and more money.  

Rubenstein believes the U.S. government and/or Federal Reserve Bank will offer more stimulus.

"Many people are going to look at whether the US economy is now going to be needing some stimulus. It was growing back after COVID, but now it's going to be stalling a little bit because of Russia." 

Heaven forbid Carlyle affiliates refinance their debt at higher interest rates.  

"The Fed is doing the right thing, but as we do begin to increase interest rates, it will slow down the economy. And when you have inflation and high interest rates, that's not a good combination."

The greed and leverage boys have one of their own as Fed Chair.  Jay Powell will continue to look out after his own.  

"Russia-Ukraine is something that's top of mind for me, because as the global economy was beginning to recover from COVID, we now find ourselves in a free-fall a bit, in terms of the global economy."

Carlyle has Admiral James Stavridis as Vice Chair Global Affairs to read the PEU tea leaves.  David Petreaus does the same for KKR.  Both have been on the airwaves discussing the war.  Neither mentioned their private equity underwriter (PEU) ties as they advised the American public.  

David Rubenstein knows about releasing genie's into the world, as private equity may be the most widespread and nearly invisible group influencing the U.S. government.  The PEU boys always get their wish.

Update 4-13-22:  Blackrock is now a strategic partner with crypto payments company Circle, which applied to be a national bank.  FDIC backing, Treasury window?

 Update 5-11-22:  Fortune reported:

In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.

Update 5-18-22: The cryptocurrency unwind came quickly after financial whores Bill Clinton and Tony Blair were in the Bahamas pushing crypto. 

If you don’t see that the crypto “industry” has become just as blindingly corrupt, just as oozingly fatuous, just as profoundly captured by the Nudging Oligarchy as the traditional financial services industry it was supposed to replace … well, you’re just not paying attention.

Update 5-27-22  Paxos received a federal trust charter from the Office of the Comptroller of the Currency.  Paxos National Trust entity is a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services.  It is different from New York Department of Financial Services-chartered Paxos Trust Co.

Update 7-10-22:   Wolf Street writes:

Stuff blows up because of leverage and cascades through the crypto space because everything’s interconnected.

Update 7-11-22:  Crypto hedge fund Three Arrows Capital founders are AWOL.  Creditors asked a court to "subpoena the founders and have them provide a list of company assets including wallets it controls, bank accounts, digital assets in its possessions, derivatives contracts, securities, accounts receivables, and all company records."

Update 8-2-22:  FDIC insured banks ran with the crypto devils and may go under as a result.  How this is remotely OK is a question one should ask David Rubenstein and his former employee Jerome Powell.

Update 10-1-22:  Rubenstein remains a crypto promoter. 

Retail Investors Have Access to VC Funds in Canada

Canadian retail investors have access to venture capital funds through WealthSimple.   WealthSimple Venture Fund I is a venture capital and growth equity fund.  

WealthSimple partnered with Accolade Partners and will invest in VC offerings from Accel, Andreessen Horowitz and Kleiner Perkins.  Investors can put up as little as $5,000 but will have to hold the investment for the life of the fund (10 years estimated). WealthSimple's timing is interesting as financial markets are straining under rising interest rates. 

 WealthSimple investors will pay two middlemen in addition to the venture capital firm.

Investors will pay a management fee of between 0.4 per cent to 0.5 per cent, plus the cost of the underlying security.

For the VC fund, those underlying costs include three layers of fees: a fund administration fee covering costs of about 0.2 per cent; incentive fees paid to Accolade of about 10 per cent; and fees paid to the underlying fund managers – the VC and private equity firms – which could include up to a 2-per-cent management fee and 20-per-cent incentive fee. Like most VC funds, incentive fees are only paid if returns exceed a certain threshold, and the fee only applies to returns, not the total investment amount.

 Investors will be robo-advised.

Clients will be able to invest in the fund through the company’s robo-adviser platform, Wealthsimple Invest.

High fees and a robo-advisor, who wants in?  Their website states it can make someone into a financial genius in less than 45 minutes.  Pardon my skepticism WealthSimpleton.

Red Team PEUs to Disrupt Party

NYT reported how the greed and leverage boys want to reshape the Republican Party landscape.  Peter Thiel is a private equity underwriter (PEU) and Rebekah Mercer is the daughter of hedge fund pioneer Robert Mercer.

A new coalition of wealthy conservative benefactors that says it aims to “disrupt but advance the Republican agenda” gathered this week for a private summit in South Florida that included closed-door addresses from former President Donald Trump and an allied Senate candidate at Trump’s Mar-a-Lago club, according to documents and interviews.

The coalition, called the Rockbridge Network, includes some of Trump’s biggest donors, such as Peter Thiel and Rebekah Mercer, and has laid out an ambitious goal — to reshape the American right by spending more than $30 million on conservative media, legal, policy and voter registration projects, among other initiatives.

The PEU boys want to continue their ready access to elected officials in order to have their will instituted into law.  Yes, America's policy making billionaires want to hold onto and grow their power, their outsized holdings and keep their preferred tax status.  

In 2017, it emerged that Thiel had been granted citizenship by the New Zealand government.  In his citizenship application, he said he’d found “no other country that aligns more with my view of the future than New Zealand.”

Does that means he is using the United States, his home country? 

Politicians Red and Blue love PEU and increasingly, more are one.  Virginia just elected one as governor and two of Peter Thiel's PEU employees are candidates for the U.S. Senate.  

Update 4-8-22:  PeterThiel disrupted Warren Buffett's image at the Bitcoin confab in Miami.

Billionaire entrepreneur Peter Thiel on Thursday called billionaire investor Warren Buffett a top “enemy” of bitcoin and part of a “finance gerontocracy” that has held back the cryptocurrency’s adoption.

Bitcoin BTCUSD could have a market capitalization that matches the $12 trillion gold market and even the $115 trillion public equity market, Thiel said at the Bitcoin 2022 conference in Miami on Thursday. 

But a group that the outspoken venture capitalist referred to as the “finance gerontocracy” has suppressed bitcoin’s adoption, said Thiel, who called Buffett a “sociopathic grandpa from Omaha.”

What's wrong with Bitcoin given derivatives are doing just fine without Buffett's endorsement or use?

Update 8-18-22:  A local council denied Thiel's application to build an 18 acre series of buildings in their New Zealand community.   His sprawling lodge community will have to go somewhere else.

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.

Credit Stress? Carlyle Group to Take Advantage

Reuters reported:

Carlyle Group Inc said on Wednesday it has raised $4.6 billion for its second credit fund that provides debt financing to companies, including family-owned businesses and private equity-backed firms.

The new fund, Carlyle Credit Opportunities Fund II, exceeded its initial target of $3.5 billion and is expected have up to $6 billion to deploy when accounting for its ability to borrow.

Rather than buy out the equity Carlyle has been known to buy discounted debt of family-owned companies and force them into bankruptcy.  

Flashback to September 2011 when The Carlyle Group backdoored British carpet maker Brintons'.

In early September, Carlyle Strategic Partners, a global fund, acquired the roughly £18m of senior debt of struggling Brintons and launched what is known as a pre-pack administration. In these proceedings, a company is put into, and bought out of, administration quickly, reaching terms with all creditors. 

Carlyle's credit opportunity arose from buying £18 million in Brintons' debt from Lloyd's Bank.  

The chairman of the Brinton’s family council has spoken out in the wake of the buyout, saying the deal went through without the consent of the family shareholders, who have lost their investment.  “It was taken from under our feet without our consent.”

Carlyle dumped Brintons' £10 million pension obligation on the Pension Protection Fund.  Carlyle did not refund the Pension Protection Fund when it recapitalized in 2015 or when it exited Brintons' in 2017.  Carlyle sold the company to Argand Partners for an undisclosed sum.

Ian Jackson, Managing Director and Co-Head of Carlyle Strategic Partners Funds at The Carlyle Group, said: “Brintons has been a solid investment for us, performing strongly over the last 5 years in a competitive global market."

Carlyle's pension dumping cost the Pension Protection Fund £21.5 million and resulted in a 10% cut in retirement benefits for a portion of those covered under the plan.

Carlyle promoted Glenn Youngkin to Chief Operating Officer in March 2011 and he served on its executive committee.  This group would have reviewed and approved calling Brintons' debt, forcing the prepackaged bankruptcy and shedding the employee pension fund.  

Isn't Carlyle supposed to make money for pension funds, not dump them?  I don't understand how Congress sees fit to continue private equity's preferred taxation via carried interest given PEUs obscene level of greed.

Politicians Red and Blue love PEU and increasingly, more are one.

Psaki to Return to Four Job Territory

News reports suggest White House Press Secretary Jen Psaki is ready for her next gig(s).  Prior to joining the Biden White House Press Psaki was in four job territory.  How did she work four full time jobs, one of which was the consulting firm she founded?  It's the money funnel for the politically connected

The Carnegie Endowment for International Peace's website currently shows only full time positions.  

Bryson Gillette does political campaign consulting.  Psaki's term corresponds with major political campaigning for the 2020 election.  

WestExec Advisors and Pine Island Capital filled out the top cabinet jobs in the Biden White House.  

Jen Psaki may leave soon and the money funnel will spin again, maybe at a record pace.

Update 4-9-22:  NBC News staffers are appalled at the hiring of Jen Psaki at MSNBC, believing it would tarnish NBC's news brand.  

Update 4-13-22:  CBS News staffers are similarly appalled at the hiring of Mick Mulvaney.  Mulvaney announced his $1 million hedge fund in December 2020.  It's Exegis Capital.

Rubenstein's Show Hosts Former PEU Klain

Carlyle Group co-founder David Rubenstein interviewed White House Chief of Staff Ron Klain.  Host Rubenstein's introduction omitted Klain's work as a private equity underwriter (PEU) for Revolution LLC. 

Policy making billionaires can get their phone calls answered by elected officials and be heard directly as non-lobbyists.  Rubenstein did not ask Klain if he has any residual holdings from Revolution LLC like Obama Health Reformer Nancy Ann DeParle did from her time as a PEU.

Klain did not pass on how much President Biden enjoyed his Thanksgiving stay at Rubenstein's Nantucket compound.  There was much unsaid on Rubenstein's PEU to PEU show.  

Update 4-3-22:  CNN's Fareed Zacharia interviewed Carlyle Group's Admiral James Stavridis yet again on Russia's war on Ukraine..  No mention of his PEU ties or Carlyle's war profiteering is a consistent theme.  Rest assured the Admiral is advising Carlyle on global shifts and implications for ensuring grand returns.  David Rubenstein has a long history of mining the political world for big profits for Carlyle.