Carlyle's Final Screwing of Brintons' Family & Employees

The Carlyle Group is exploring a sale of Brintons', the storied British carpet maker.  Carlyle hired William Blair to auction Brintons' five years after acquiring it for £38 million out of liquidation.  The story did not say how Carlyle put Brintons' in liquidation by buying company debt on the cheap.  The Brintons' family leveled about their unfair treatment by Carlyle. 

Rather than buying the family's equity stake, Carlyle bought the company's debt (at a discount to its face value, no doubt). Once they had acquired the debt Carlyle then used a controversial pre-pack administration to seize control – placing the carpet-maker into administration, then buying it straight back.

By using a pre-pack to acquire the business, Carlyle was able to jettison Brintons' pension fund – complete with its £10.5m deficit. 

I expect the family to be knotted and tufted about Carlyle's plans to get over £200 million from the sale.  The sixty five Brintons' employees laid off in February 2016 might be frosted about Carlyle's huge payday after theirs was eliminated. 

Carlyle dumped Brintons' pension responsibility on the public Pension Protection Fund.  How much will they get from Carlyle's monstrous profits on Brintons' sale?  Nothing, nada, zippo.  Auctioneer William Blair will get more than the Pension Protection Fund.

Carlyle promotes how they are the solution for underfunded pensions.  Just not Brintons', a five year PEU bled affiliate. 

Is Private Equity the New Religion?

Goldman Sachs CEO Lloyd Blankfein's does God's work.  Thus, private equity underwriters (PEU) must have a similar striving.  Seraphim Capital is a UK based private equity firm that recently launched a Space Fund to profit from the heavens.  Seraphim are six winged creatures that praise God on his throne. 

One Seraphim Managing Director also is cofounder and CEO of Angel Capital.  That's a second bit of name data supporting a holy alignment. 

It's hard to be heavenly with agnostic capital.  Dang!  This PEU almost passed the third test and joined the Lloyd Blankfein "I can take it with me" Club.   

Tax Cuts Coming: How Big?

WSJ reported:

“Right now in Washington nobody cares about the debt,” Carlyle Group co-founder David Rubenstein said at the SuperInvestor private equity conference in Amsterdam. “We have $20 trillion of debt and people say, ‘OK, $20 trillion, $22 trillion, $23 trillion—what difference does a couple of trillion make?’”

Mr. Rubenstein said he didn’t share concerns voiced by many since the election that Mr. Trump’s economic policies could fuel inflation. He pointed out that the inflation rate has remained near historic lows for years.

“I don’t expect there will be a lot of constraints on private equity going forward,” Mr. Rubenstein said. “I don’t think it’s going to be adversely affected by President Trump or his administration.”

As I've said before "Politicians Red and Blue love PEU."   The billionaire class loves its representative elect. The tax cuts are coming, the tax cuts are coming.

Trump's Medicare Chief Latest Double Dipper

President elect Donald Trump announced his nomination for Center for Medicare/Medicaid.  Trump's Seema Verma helped design state healthcare policy like President Obama's Marilyn Tavenner.  Tavenner refused to share a study on the future of healthcare in Virginia as it was privately funded.  Verma helped design health policy for Indiana but her company worked for both sides, the state and HP, a giant Medicaid contractor for the state.  IndyStar reported:

For more than a decade, the little-known private consultant has quietly shaped much of Indiana's public health-care policy. The state has paid her millions of dollars for her work — amid a potential conflict of interest that ethics experts say should concern taxpayers.

Largely invisible to the public, Verma's work has included the design of the Healthy Indiana Plan, a consumer-driven insurance program for low-income Hoosiers now being touted nationally as an alternative to Obamacare. In all, Verma and her small consulting firm, SVC Inc., have received more than $3.5 million in state contracts.

At the same time, Verma has worked for one of the state's largest Medicaid vendors — a division of Silicon Valley tech giant Hewlett-Packard. That company agreed to pay Verma more than $1 million and has landed more than $500 million in state contracts during her tenure as Indiana's go-to health-care consultant, according to documents obtained by The Indianapolis Star.

Verma's dual roles raise an important question: Who is she working for when she advises the state on how to spend billions of dollars in Medicaid funds — Hoosier taxpayers or one of the state's largest contractors?

In a written statement, Verma said unequivocally that she played no role in HP's contracts with the state. "SVC has disclosed to both HP and the state the relationship with the other to be transparent," Verma said. "If any issue between HP and the state presented a conflict between the two, I recused myself from the process."

But the recently ousted head of the state agency administering Verma's contract told The Star that Verma once attempted to negotiate with state officials on behalf of Hewlett-Packard, while also being paid by the state.

HP said it can find no one in its company with any recollection of such a meeting. Verma declined to answer further questions about her work with the state or HP.

Verma's dual roles have surprised some leading Republican lawmakers and expose one of many loopholes in Indiana's government ethics laws.  Government ethics experts told the Star the arrangement presented a conflict of interest.

Obama's health reformer Nancy-Ann DeParle received private equity distributions from the sale of healthcare companies while serving the public.  This after all conflicting assets were disposed.

One cannot serve two masters.  Arthur Anderson showed that consulting and public accounting don't mix.

Of course in a Trump administration there is only one master.  His name is Donald.

Update 1-14-17:  Big pharma retains its pricing protection courtesy of Congress.

Update1-5-18:  Verma wants to implement a work requirement for Medicaid recipients citing how work improves people's lives.

Propornot: Hillary's Tech Revenge?

PEUReport has long relied on a number of blogs for information and research not available on mainstream media sources.  Recently, a brand new organization Propornot called a number of these reliable sites "Russian Propaganda."  Propornot's researchers did not reveal their identities or their methods.

Naked Capitalism - started 2006
Washington's Blog -  ramped up March 2007
ZeroHedge - January 2009

I was struck by the implicit duality of Propornot, basically "he who is not with me is against me."   American democracy encompasses a wide range of ideas and a political election campaign should cover the continuum of economic, political, scientific, spiritual thought and incorporate countless other dimensions of human existence.

Why is there a need to collapse thinking into "Russian propaganda"? Because one narcissist won the election and the other lost. Narcissists are never responsible for the ill things other people impose on them, robbing them of their birthright and natural greatness.

Hillary Clinton tried hard.  Despite the help of Alphabet/Google's Eric Schmidt Hillary did not win the election as designed by our Founding Fathers.  The great Google technological advantage was undone.  How could this be?

Propornot reduced a number of respected websites to Russian propogandizers.  Propornot is even offering a Google Chrome browser tool to help citizen's identify "Russians are coming" websites.

Does anyone else find it odd that Google's browser stood ready to identify Russian propogandists so quickly after the election, one where its Chairman chose sides and supported startup Timshel.  Timshel shows a 2016 copyright date and its first blogpost came in February 2016.  I could find no relationship between Timshel and Propornot, but it's hard to research an organization with no identified parties. 

The following is solely my opinion.  I believe Propornot is a logical fallacy, "post hoc, ergo prompter hoc."  After this, therefore because of this.  Hillary Clinton lost the election, therefore it was caused by Russian propogandists.   This allows the Blue Team to avoid any critical examination of their several decade embrace of monied, power interests to the detriment of the common person.

Propornot shows the harm that can be inflicted with "big data" that implies relationship but fails to show causation.  Propornot's loose assertions would not result in an arrest, much less a conviction.  But this is the court of public opinion and frequently the bar is low.

The Washington Post - Propornot linkup points to group think that emanates from a central source, be it the winning political team, the losing team's techies wanting to massage the ego of their vanquished champion and/or a whittled down corporate media intent on disparaging those doing what they won't, look behind the political public curtain.

Thirty anonymous schleps wouldn't get this much free media attention from a storied newspaper.  Rest assured insiders are behind Propornot and they don't care about free speech or democracy.  They have a narrative to push and it's a divide and conquer duality.  Rise above and read.  

Statement:  PEUReport is an anonymous opinion blogger that utilizes research and management theory to expose the scourge of private equity which preys directly and indirectly on the common person.  It's no accident that wages and benefits have stagnated or declined as private equity became ubiquitous and conjoined with our Red and Blue political elite.  As an anonymous blogger I have no expectation that WaPo would ever run anything I've found, much less take it carte blanche.

Update 12-1-16:  Wall Street on Parade has their own theory about Propornot.   They note the WaPo author is the Technology reporter who interviewed Google's Eric Schmidt in 2014.  Schmidt ran the Hillary campaign's technology strategy.  My cognitive dissonance theory is a step further.  It could be an error or an idea whose time is yet to come.

Update 12-2-16:  The House introduced a bill aimed at Russian propaganda websites. This supports my statement in the above post re: group think from a central source.  Another support:  News media and intelligence agencies blame Russia for Trump's presidential win.

Update 12-8-16:  Hillary came out forcefully against "an epidemic of fake news."

Update 12-15-16:  The Russians are coming meme exploded across mainstream media outlets.  The DailyMail bothered to interview a recipient of the leaked Podesta e-mails and he claims it came from a Blue team whistleblower.  That's a far cry from a Ruskie submarine drop.

Update 12-17-16:  Hillary blamed Ruskies and FBI for her defeat.

Update 1-2-17:  Reporters continue to trust intelligence services who blame the Russians. Rolling Stone's Matt Taibbi is pondering the story's truthfulness with so little evidence shared.

Update 3-25-17:   ZeroHedge identified further ties to members of the Blue Team wanting to shift blame for Hillary's blistering defeat to Russia.

Update 7-4-17:  NYT walked back its assertion that all 17 U.S. intelligence agencies agreed Russia was behind actions intended to interfere with the 2016 election.  It's now four agencies.

Update 10-23-19:  Washington's Blog will cease in part due to damage from being listed as a Propornot website.  This is a truly sad development.

Update 1-30-23:   Matt Taibbi revealed how Russian disinformation was spread.

Celebrate Wealth: It's Here!

And President elect Trump's victory has the financial markets seeing green.  Relax.  Life is good.  Any parallels to 2007/2008 are clearly the work of negative and cynical people who hate life.  Ignore anyone who refers you to a Forbes retrospective which stated:

Fast forward to the financial meltdown of 2008 and what did we see? America again was celebrating. The economy was booming. Everyone seemed to be getting wealthier....

And then the wheels fell off the economic engine as it careened down Debt Mountain and bounced through Risk Gulch.  It can't happen again.  Surely, our leaders have instituted safeguards for more than themselves.

The greed and leverage boys, PEUs and Wall Street, only want to help the common man with their retirement needs.  Their products and financial machinations are completely safe.  

One can only vote for change and hope.  The rest is in their capable hands.  Ignore naysayers and Russian propagandists who suggest our leaders are capable of greed, influence peddling, evisceration and revenge.  It's party time!  Borrow, buy for there is no day of reckoning.

Confession:  This post is either completely sarcastic or intended to keep PEUReport off the WaPo fake news list.  I report, you decide!

Clown Makeup? It's PEU Dry Powder

Bloomberg reported:

With plenty of money and a scarcity of deals, private equity firms’ cash piles are the highest they’ve been since the depths of the financial crisis.

VatorTV added private equity IPOs are at an eight year low:

Looking only at private equity-backed IPOs, there have been 18 so far this year, raising $5 billion, putting them on track for the slowest year since 2008, when there was $4 billion raised in 18 IPOs.

WealthManagement reported hedge funds haven't fared well either.

For the first time in six years, flows to hedge fund and liquid alternative managers have turned negative.

Hard to invest, difficult to exit and hedge funds imploding?  It sounds like the end of 2007 and 2008 just before the Bush team let Lehman Brothers sink. 

If you see dry powder laying about stay away and report it to your local authorities.  A PEU or hedge fund may be missing their nest egg.  You don't want to be blamed for their mishandling or loss.

Also, it's the time of year for giving.  If you have millions and want to help The Carlyle Group's assets under management turn positive give them a call.  They want more powder.