2024 Election: PEU Undergirded

If the economy is booming why do so many people feel the country is moving in the wrong direction?  Because the boom is not shared.  

Yes, many people listen to Red Team media and get worked up as the purveyors intend.  But many voters don't and are not diehard Trumpers.  They just know something's not right.

I offer this election backdrop (news articles over the last four years):

Noted investor Jim Chanos offered the following observation:

Private equity firms employ over 12 million people.  A study showed PEU ownership results in declines in "current employees’ satisfaction with their Compensation & Benefits...  We see similar declines in Culture & Values, and smaller declines in Work-Life Balance and Senior Management."

The crapification of the workplace accelerated as PEU barbarians stormed company after company.  Elected officials did not protect us.  

I shared my experience under private equity ownership with the Federal Trade Commission (after WCAS and TPG bought 60% of our hospice company):

After saying there would be "no changes" they reduced office staff 50%, cut the number of holidays 33% and stopped the 50% premium for holiday pay. They implemented unreliable technology. Numerous times the phone system stopped working altogether. It's critical that hospice patients, family and caregivers can reach someone 24/7. The system failed after the company took away company provided cell phones for most staff, so we were not able to use those phones as a backup.

 

The new "comprehensive" hospice EMR/Office management system robbed staff of fair pay for hours worked and shorted reimbursement for miles driven. Already overburdened hospice staff had to take hours they did not have to check the overly complex and convoluted pay portion of the system and add time to ensure pay for hours worked. It was virtually impossible for staff to decode the mileage reimbursement system. Promises to bring in experts to help staff went unfilled. I believe the company liked the significant money it was saving in both areas, pay and mileage.

Of the over 2,000 published FTC comments, half mentioned private equity.  Physicians, health professionals and patients shared dark experience after dark experience.  Even an insider offered:

Many of thepworst instances of a poorlygfunctioning corporate governance/economic incentive system have been through U.S. private equityafirms mismanaging investments in U.S. healthcare and technology companies -- are just the uniquely awful examples with broad public awareness. Private equity firmslcynically deny they have operational control of their portfolio companies when abuse is revealed, despite their effectiveicontrol through an interlocking directorate of board members, investors, and economic incentives. Some limited partner investors arevincentivized into complicity through access, equity co-investments, or fee breaks. Employees and management teams at these portfolio companies, like helots, are retaliated against if they speak out of line. The current governancepsystem in place for private equity is not effective and the DOJ, FTC, and Department of Health and Human Serviceseshould have a greater degree of oversight to stop this from happening again. This induced trauma is happening with full awareness from the wider private equity ecosystem. Many of the most resourced private equity firms in the world are right nowucolluding to ringfence their own liability and cover up the impact this misappropriation of resources is having on our healthcare system.

Simply providing the opportunity for public comment got the Blue Team in hot water with their PEU backers.  In their world everything is a trade secret or belongs under an NDA (nondisclosure agreement). 

The greed and leverage boys targeted FTC Chair Lina Kahn, who had the audacity to look into "vertical integration" (PEU ownership).  She likely had no job under either Trump II or Harris.  

I wonder how the PEU crapification of the workplace played into the election.  Was it a subconscious force steering voters to vote for "the entertainer" promising to "protect you"?  Maybe, may not.  Nevertheless, it leaves us on shaky ground.  Your protector may just be a predator.

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

Update 1-26-25:  Trump II, the digital Caligula's administration has:

shuttered FTC requests for information and public comments on corporate mergers and acquisitions, "protecting workers from illegal business practices," "predatory pricing," and "surveillance pricing practices," which refer to companies' use of personal data to set individualized prices.

Biden to Return to Nantucket

While the Blue political teams deals with a Trump White House victory, President Joe Biden plans to continue his tradition of spending Thanksgiving in Nantucket.  Host David Rubenstein is cofounder of The Carlyle Group, a politically connected private equity underwriter (PEU).  

Biden's stay would be his fourth as President.  Prior visits had some controversy:

Administration reps did not respond to multiple requests for comment about whether Biden is paying. A spokesman for Rubenstein, whose net worth is estimated at $3.5 billion by Forbes, also declined to comment.

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

Update 11-27-24:  Biden's back at the Rubenstein estate on Nantucket for Thanksgiving 2024.  The Blue Team's pandering to elites continues.  

PEU Legends & Tech Gods Win

The second election of Donald Trump to the White House is a major win for his billionaire backers, a mix of legendary private equity underwriters (PEU) and storied "live forever" tech founders.  Jim Chanos noted same on X:

The greatest trick the Devil ever performed is convincing pundits like this that a ticket with a Wharton-educated RE developer who lives in Palm Beach, and a Yale Law-educated venture capitalist, both advised by Wall St/Silicon Valley billionaires, is not the elite Establishment!

The political Red Team may control both chambers of Congress, which means they'll have lots of energy to enact their budget concerns.  Flash back a mere three months:

Republican leaders are coming under pressure from conservatives to take federal deficits and the debt more seriously than they did during Trump’s prior term.

Red Team Tech God Elon Musk believes the people who just voted Trump in office need "economic hardship."  How's that for a thank you?  Elon is aligned with the PEU legends in wanting more tax cuts for his ungodly riches.  Carlyle co-founder David Rubenstein told CNBC this morning that according to the market, "deficits don't matter."

Rubenstein located Carlyle in Washington, D.C. for the express purpose of corrupting government officials (non-lobbying lobbyist) and gaining access to Uncle Sam's wallet.  

The PEU movement is now global.  Just last week in Riyadh, Saudi Arabia:

Carlyle Chairman and Future Investment Initiative Institute Secretary of the Board, David Rubenstein discussed the rising influence of the Global South, technological disruptions, and the need for novel economic systems to support sustainable global progress

Elon Musk appeared by videoconference at the same event.  

“Going Forward, we need AI that loves humanity, which is why xAI was created. It seeks the best interests of humanity” promoting a future where these technologies serve to uplift and enhance the human experience.

AI that loves....that does not compute.  Danger, danger.

TechGods also found Uncle Sam's financial teats.  It turns out they are equally skilled at suckling as the PEU boys.  

Refill the federal coffers?  A resounding chorus of cognac tinged "Blasphemy!"

I vote for the American economic hardship that involves taxing billionaires.  Queue that one up and leave the federal employee alone.

Politicians Red and Blue love PEU and increasingly, more are one.  So, my wish is not going to happen.

Trump raises his thin scepter (that makes his hands look bigger), "Enact the tax cuts!"  The Musks and Rubensteins nod appreciatively.  And their net worth adds another zero at the end.

Update 11-9-24:  ProPublica's piece revealed Trump tried to cut support for the working man during his first term in office.  Voters expecting Trump to "stick it to the man" may just find "that man" is in the mirror.

Mike Peumpeo Returns

Former Secretary of State Mike Pompeo campaigned for President elect Donald Trump.  Physically, Pompeo is much lighter than his Secretary of State days.  He's also far wealthier.  This summer Mike joined the private equity underwriter (PEU) ranks at tech focused Niobrara Capital.

Niobrara's only affiliate Polar Semiconductor was the first to tap that federal pot of CHIPS Act money.  

Founder Chip Shorr cut his PEU teeth with CVC Capital before going to Blackstone.  I'm glad the greed and leverage boys made room for Pompeo, now Peumpeo.  

There's no need to dump any PEU holdings should Mike rejoin the Trump White House.  Anything goes nowadays.  Conflicts of interest are not only expected, they are highly desirable.  

Politicians Red and Blue love PEU and increasingly, more are one.  Congratulations to the Red Team on their turn to steer the federal budget to their friends.

Update 11-6-24:  Jim Chanos wrote on X:

The greatest trick the Devil ever performed is convincing pundits like this that a ticket with a Wharton-educated RE developer who lives in Palm Beach, and a Yale Law-educated venture capitalist, both advised by Wall St/Silicon Valley billionaires, is not the elite Establishment!

PEU Energy Deals Hot in West Texas

West Texas is a hot spot for private equity underwriter (PEU) deals.  Many are energy related.  With solar and wind generation facilities weather dependent, the latest trend is battery storage. 

Tom Green County has an Apex Clean Energy solar site that added battery storage.  In January 2023 Apex's press release stated:

Apex Clean Energy today announced an environmental attribute purchase agreement (EAPA) with Meta for the full capacity of Angelo Solar in Tom Green County, Texas. The 195 MW project will help Meta support its regional operations with 100% renewable energy.

Ares Management acquired a majority stake in Apex in 2021.  

In early 2024 another firm bought into the project:

Great Bay renewables (“Great Bay”) today announced it has entered into a $30 million royalty investment with Apex Clean Energy (“Apex”) related to Apex’s 195 MWac Angelo Solar project in Tom Green County, Texas (“Angelo”), which is anticipated to achieve commercial operations in May 2024. 

Apex is an established industry leader in origination, commercialization, construction, and operation of utility-scale renewable energy projects, with one of the largest portfolios of renewable resources in the nation. 

The full capacity of Angelo will be sold to Meta under an environmental attribute purchase agreement. The royalty investment has been structured using royalty rates that vary over time and achieve Great Bay’s investment hurdles.

Chamber of Commerce Vice President of Economic Development Michael Looney cited the Angelo Solar project before the Tom Green County Commissioners Court in late April, as he spoke on behalf of the next battery farm.  

The Peregrine Energy project is in North San Angelo and is known as Zeppelin Energy Storage LLC.

Concho Valley Homepage reported on the Commissioners' Court meeting:

“It’s a storage facility, and they use different yields and different graphs to know exactly when the peak hours for energy usage are, and they deploy that from the battery storage,” said Tom Green County Judge Lane Carter. They’re selling a commodity that they take off the grid when there’s not as much usage and deploy it when there is high usage.”

County officials approved a $250 million project in March but that dropped to $160 million in April.

Both Tom Green County and the City of San Angelo paved the way for massive tax abatement on Peregrine's investment, even though the project provides virtually no permanent jobs.  

City Council last acted on the Zeppelin project on September 17, 2024.  

Peregrine started in 2022 as a partnership with PEU Castlelake.  Since then it's done deals with IMM Investment Global, AB Carval and most recently with KKR.

Chamber VP Michael Looney spoke to the Development Corporation Board last week.  He said:

"We aim to engage primary job creating businesses"

Giving significant county and city tax breaks to Peregrine's Zeppelin project does not fit with creating primary jobs.  I'm sure it helps Peregrine and its various private equity financiers cross their hurdle rate.  I don't see how it helps employment, a primary aim for both the Development Corporation and its Chamber of Commerce vendor.  

Looney talked about private investment and raised the Chamber's working with private equity.

This is the use and parlaying of private investment, private equity, on the projects we have in process or those that we are aspiring to have in process.  This serves as an accoutrement to half cent sales tax dollars.  We're finding that private equity is very hungry for positions within tertiary markets, like San Angelo, and oftentimes they don't necessarily want to share any market positions with municipalities, which is not necessarily a bad thing.

VP Looney noted:

We are well into discussions with the development of speculative buildings within the Business Park.  That goes along with several private equity investment companies we are working with.

His "value proposition" close included:

Access to private equity relationships

In sum, the PEU boys want economic subsidies and tax breaks, but don't want to disclose their stake in deals or reveal their fees, profit expectations and/or expected time frame for flipping the project.  Everything is a PEU trade secret, which is in direct contrast to open government.   

Local elected officials asked no questions at Tom Green County Commissioners' Court.  City Council approved the item under a Consent Agenda vote, thus no discussion.  That's the way the greed and leverage boys like it.

Update 11-5-24:  My wise friend wrote:

"Deals like these basically furnish the private equity and big business interests with tax abatements for no jobs and as a plus the tax base of the area gets pushed on the people again."

City Council met today and voted to reduce the retiree health benefit by adding a $500 deductible and a $250 charge for outpatient surgery.  Many retirees get less than $500 a month from their public pension while others get between $500 and $1,000.  The current Police Chief suggested a fund be established to help those retirees who cannot meet the new financial burdens imposed.  

Not one person mentioned the 85% tax abatement recently granted to a PEU battery storage project that likely needed to be within city limits (fire protection) for insurance purposes.

Update 11-20-24:  Blackstone invested $500 million in Lancium and got an equity stake.  How big?  It was not shared in the article.  As for their West Texas sites they include Fort Stockton, Abilene, Childress and five other unnamed sites.  A Lancium employment ad mentioned one week a month travel to North Texas for a site selection position.

Update 1-25-25:  Transparency is an issue in Kentucky over illicit handling of state retirement investments by PEUs KKR and Blackstone.  Private equity underwriters consider almost everything they do as a trade secret, even their fleecing of taxpayers and retirees.

Update 1-26-25:  A California battery storage facility caught fire.  Some characteristics of that project are different than Zeppelin, however it highlights the need for an appropriate fire response, something Tom Green County is not equipped to handle.

Update 3-5-25:  The Texas AG's office finished their review and the city shared that response yesterday, nearly four months after submission.  The developer of the spec building in the industrial park is Wheelhouse Commercial Development LLC and related company NAI Wheelhouse.  The Lubbock based property developer completed a number of projects in San Angelo, many retail establishments around the Sam's Club.  There were no references to private equity firms in the PIR  release.

The city plans to sell 350 acres near the industrial park to Skybox Data Centers LLC for $50,000 per acre.  That facility will use huge amounts of power.  Stargate AI?  Little Lancium?

Update 3-10-25:  Tom Green County Commissioners' Court will consider a tax abatement agreement for Doral Renewables LLC Cold Creek Solar project with an estimated $120 million cost for improvements.  Doral's website mentions a battery component but the TGC CC agenda only says solar.

Update 4-29-25:  Commerce Secretary Howard Lutnick, whose son has a major role in a new bitcoiin mining company,  said in an interview that bitcoin miners would locate atop natural gas fields.  Trump's elder sons switched from AI to bitcoin with their American Bitcoin.  Looks like the Sons of Monarchy are going to be our new neighbors.

Update 5-28-25:  A San Angelo company is producing the steel for the Lancium/Stargate site.  It's commercial referred to the venture as Project Ludacris.  Icarus might be a better name for it now that AI is going country specific.

Update 6-1-25:  Concho Valley Homepage ran a video segment on data centers coming to San Angelo.  Lancium Abilene is well on its way to eight buildings and 1.4 GW.  That could power over 400,000 homes.  Crusoe Energy, Primary Digital Infrastructure and Blue Owl Capital are involved in adding buildings on Lancium's site.

Update 6-23-25:  Fox West Texas ran a story on West Texas data centers and the promise of taxation.  If history is any guide, San Angelo City Council will abate 80% or more of that promise.

Update 6-25-25:  Fox West Texas ran another story on West Texas data centers and their need for power.

Update 7-20-25:  The Hill reported Texas law allows:

developers of data centers or real estate to effectively secede from city authority, allowing them to drill their own wells into the city water supply without the city being able to charge them taxes or impact fees.

Update 11-8-25:  Doral Renewables is partnering with Bechtel Corporation on the Cold Creek solar and battery farm.  Doral's description indicates they are backed by Apollo, a giant PEU.  It is projected to be operational in 2028. 

San Angelo City Council and Tom Green County Commissioners have a new constituency to serve, PEUs with specific hurdle rate requirements.

City Councilman Tom Thompson, Tommy Hiebert, Harry Thomas have been ringing the bell on cutting city services, I take it, to give these projects their massive tax abatements.  That has a national political feel to it.

Update 12-20-25:  The Real Deal reported:

Bolt Data & Energy announced it raised $150 million in capital and struck a partnership with Texas Pacific Land Corporation, which is investing another $50 million into the venture, according to a joint press release Wednesday. The tie-up positions Bolt Data to develop large-scale data centers on Texas Pacific’s sprawling West Texas holdings, as demand for energy-hungry AI computers accelerates, Bloomberg reported.

J.D. Vance Invests with Billionaires

Tech Gods and PEU Legends joined to support a second Trump presidency.  Former President Donald Trump tipped his hat to the Tech Lords with his VP pick of J.D. Vance.  

Vance formed Narya Capital with investments from former boss Peter Thiel, Marc Andressen (who recently opened a Washington, DC office) and Eric Schmidt (fresh off suggesting AI steal intellectual property in the U.S. and hire lawyers to "clean up the mess" afterwards.  

Narya Capital invested in Rumble in 2021, alongside Peter Thiel.  Tech Bishop David Sacks joined the Rumble board in June 2023 after Rumble bought out Callin.  Howard Lutnick's Cantor Fitzgerald took Rumble public via an SPAC in September 2022.

"We're done, ladies and gentlemen, catering to Wall Street. We'll commit to the working man."

While J.D. Vance eschews billionaires, his best buddies are one.  Trump's transition team co-chair Howard Lutnick couldn't be more Wall Street with his eight CEO positions and stakes in private equity underwriter (PEU) GCM Grosvenor.

Politicians Red and Blue love PEU and increasingly, more are one.  A VP slot would be the highest they've achieved.

Update 11-6-24:  Jim Chanos wrote on X:

The greatest trick the Devil ever performed is convincing pundits like this that a ticket with a Wharton-educated RE developer who lives in Palm Beach, and a Yale Law-educated venture capitalist, both advised by Wall St/Silicon Valley billionaires, is not the elite Establishment!

Lutnick "Not Pinocchio" as His Nose Never Grew

Trump Transition Team Co-Chair rallied Donald Trump's faithful followers in Madison Square Garden last Sunday.  He exhorted the crowd to "crush Jihad", lamented that the rest of the world is "eating our lunch" and patted himself on the back for the team building job he is doing on behalf of Donald Trump.

Billionaire Lutnick already has lots of jobs, eight CEO positions according to SEC filings.

Lutnick holds at least a 10 percent stake in GCM Grosvenor which has a $30 billion private equity platform.  That means Howard gets the billionaire tax break from GCM Grosvenor's carried interest distributions.  It also makes Lutnick a private equity underwriter (PEU).  

Did Howard help deliver the Bay area venture capitalists to Trump?  David Sachs and his podcast buddies pushed Trump with comments like, see... he's not crazy.  Lutnick was the man in Rumble's SPAC, which helped Tech Gods Peter Thiel and Sachs make even more money.  

Lutnick was not only the head of the merger sub, his firm served as advisor and placement agent for the deal.  Ka-ching, ka-ching, ka-ching.

As for "the rest of world eating our lunch", Howard has been a frequent attendee at the World Economic Forum in Davos, Switzerland.  His GFI Group announced a joint venture in China in December 2020, shortly after the COVID-19 pandemic hit its stride in the U.S.  Lutnick's press release stated:

GFI Asia Partners Pte. Ltd ("GFI"), a subsidiary of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage and financial technology company, announced today that it took a majority stake in a newly established joint venture company in China, GFIGS Commercial Consulting (Shanghai) Co., Ltd ("GFIGS"), offering OTC derivatives brokerage service. 

GFI's joint venture partner, Guizhou Big Data Capital Service Centre Co., Ltd. ("Guizhou Big Data Capital"), is a modern service enterprise whose main business direction is data commercialization and capitalization for both the information and financial services industry.

"Data commercialization" sounds like the predatory behavior Lutnick is citing with his "eating our lunch" comment.  That's his Chinese JV partner.

As for the "greatest team to ever walk into government," that's Howard's job.  I expect to see many PEUs occupy key positions in a Trump White House.  That's been the case for both political teams for quite some time.  

This race is different in that PEU legends and Tech Gods have joined to push the Red Team.  They don't want to give up their insider seat at the table where these billionaires steer government policy, direct Uncle Sam's wallet to their affiliates and keep the preferred taxation they've enjoyed for decades (that the public hates).  

Politicians Red and Blue love PEU and increasingly, more are one.  Howard will ensure that continues should Trump win.