Redefining Retirement: It's All Theirs

Corporate chiefs, elected officials and political insiders will gather Wednesday in Washington, D.C. to talk about people saving for their own retirement.  And who wants in on your retirement money?  Private equity underwriters (PEU).

How do the sponsors of the retirement summit feel about private equity?  BlackRock considers it a core holding.

For the Bipartisan Policy Center I started with their board of directors.  

The first person I picked was Karen Dunn Kelley.  She is currently a director for JP Morgan Private Markets Fund, which focuses on private equity.

The man to Ms. Kelley's left is former MetLife Chair Robert Henrickson.  Consider his 2006 testimony to a special Senate Committee on Aging:

In the case of Social Security, longevity risk is transferred to the social system. In traditional pension plans, longevity risk is transferred to the plan. On his or her own, an individual can pool the risk by turning to an insurance company. 

Today, most Americans realize their employer will not be providing them with a guaranteed monthly paycheck for life. Forced by competitive realities, many employers are discontinuing defined benefit pensions, sometimes exchanging them for 401(k)s. The reality is that the defined contribution plans such as 401(k)s have become the primary retirement vehicle, and that is just for people who have employment-based retirement plans. 

But 401(k)s, while popular, have not yet proved to be successful if success is measured by their ability to generate adequate income for a generation of retirees. As the burden of retirement has increasingly shifted to the individual, we now are asking individuals to do something that they have never done before--fund and finance the rest of their lives.

That was 2006 when PEUs were just ramping up affiliate buyouts, sending jobs to China and dismantling pensions.  

A 2023 study showed private equity ownership results in pension plan changes, including:

Following a private equity buyout, defined benefit pension plans are more likely to be frozen or terminated. Regarding the actuarial assumption the pension characteristics, the study author found an increase in the pension liability discount rate and decreases in the projected benefit obligations (PBO), pension assets, and contributions, but did not find significant effects on funding ratio. Additionally, the author found that investment strategies for these plans become riskier, with a higher allocation to equities and lower allocations to cash, government securities, insurance accounts, and mutual funds.

Irony?  PEU boys bathe themselves in "first responder" pension funds as a defense to releasing the slightest bit of information about their offerings and methods of operation.  Yet, they frequently cut the retirement benefit after they take over companies.

A 2024 interview showed a portion of the dance between insurance companies and private equity:

...we see life insurance companies investing in private equity for different reasons. As I mentioned earlier, investment in private equity has been growing significantly over the past 10 years, and one of the main drivers for this would be the low interest rate environment.

A different angle of that same dance shows PEUs considering life and annuities as permanent capital and acquiring books of policies or reinsuring them.

The bipartisan push to open up retirement accounts to private equity and its inbred cousin, private credit, can be seen in various new products, which are coming forward as the SEC has fewer financial cops on the beat:

State Street partnered with Apollo to offer a private credit ETF.  I'm not sure how you fairly price a long term debt obligation on a daily basis.  But the good news?  Democratization!

It's hard to see democracy being furthered in this picture, unless Goldie the dog is getting the right to vote. 

Redefining Retirement is two days away.  We'll see how it turns out, especially as politicians Red and Blue love PEU and increasingly, more are one.  

PEU Family Dynasties

Private Equity Insights reported former British Prime Minister David Cameron joined Jeb Bush's family at Finback Investment Partners, a private equity underwriter (PEU) focused on insurance brokerage, data centers and software.  

The Bush Presidential dynasty, father George H. W. Bush and son George W. Bush, held positions with The Carlyle Group, a politically connected PEU.  Jeb Bush is a serial PEU founder.  His last two firms included his son as co-founder.

British Prime Ministers also found PEU employment post public service.

Politicians Red and Blue love PEU and increasingly, more are one.  TechGods copied the PEU playbook by sponsoring politicians for access to Uncle Sam's wallet.  That this "greed/politics marriage" has gone on so long should be a disturbing sign to common folk.

TechGods are more direct, not as secretive and far less patient than their PEU brethren.  There is cross pollination between the two groups.  Jeb's Finbeck Investment Partners has a high tech focus with data centers and software.  Also, Finbeck founder Jack Oliver advises TechGod Joe Lonsdale's 8vc and TechGod Alex Karp's Palantir.   

Greed and leverage is as greed and leverage does....  Unfortunately, it's far more pervasive and invasive than it once was.  For that, we suffer.

The Bessent of Times

Background:  Recall the Treasury competition was between hedge funder Scott Bessent and Apollo's Marc Rowan, a private equity underwriter (PEU).  Just days ago Trump II, the digital Caligula, lied and lied and lied before both houses of Congress.  

CNBC interviewed Treasury Chief Bessent on Friday.  Bessent said China exported its economy to the U.S. which harmed many people.  He referred to it as the China Shock post 2004.  Private equity owners had offshoring as a key part of their playbook.  Investors, like hedge funds, pressured companies to cut costs to increase profitability, including labor.

The Journal of Corporation Law reported:

Even clearer is the evidence showing that the total number of employees declines at “surviving” firms that experience a hedge fund engagement.  

Bessent Capital's largest holding was Bristol Myers Squibb (BMS).  By 2010 Bristol Myers identified China as an emerging market on which to focus.  In 2022 China Daily reported:

BMS was the first Sino-US pharmaceutical joint venture after China began its reform and opening-up in the late 1970s. Over the past 40 years, the company has built up strong connections and a significant presence in China, and is committed to continuing prioritizing China as a key driver across all its development programs. 

The company said it aims to more than double their combined R&D and commercial headcount in China by 2025.

I'm sure at one point Scott Bessent was very familiar with Bristol Myers Squibb's strategy and production operations.  CPA reported on generic drug imports:

Last year, the U.S. recorded a $139.5 billion deficit in pharmaceuticals, up from a $102.3 billion deficit in 2023.

Turning China into a global manufacturing hub, which began with its ascension to the World Trade Organization in 2001, has made it an indispensable part of the American supply chain.

The article suggested "working together to overcome the price erosion, industry consolidation and manufacturing offshore dynamics."

U.S. companies exported jobs to China while elected officials offered the "cheap goods/dollar extender" rationale.  Bessent reversed that as well with his statement Thursday that access to cheap goods is “not the essence of the American dream.”   

That got a quick rebuke from former Vice President Mike Pence.  The Hill reported:

“Actually @SecScottBessent, it is. Tariffs are good as a means to bring nations like China to the table, but free trade lowers the costs of goods and improves the quality of life for every American. Let’s Pursue Free Trade with Free Nations and Revive the American Dream.”

Bessent told CNBC that freeing up "banks" to lend would grow private sector employment.  Banks have increasingly turned corporate lending over to the private credit side of major private equity firms.   

Last month Frost Brown Todd attorneys wrote:

....many at Goldman Sachs believe “a handful of private-credit firms and similar institutions will soon dominate the debt landscape.”[2] Accordingly, the combination of private equity and private credit with aligned investment strategies should spur more private capital into the M&A market.

Just to be clear former greed and leverage boy Scott Bessent hid the role his PEU brethren played in offshoring U.S. jobs to China.  Virginia's current Governor Glenn Youngkin sent thousands of auto parts jobs to China and later talked about monitoring Beijing rush hour traffic.  Youngkin did those things while an executive at The Carlyle Group, a politically connected PEU.

Bessent then was not clear about the likely source of lending for corporations adjusting strategy.  S&P Global estimated private equity's dry powder (investor cash on the sidelines) at $2.6 trillion in mid 2024.  

Bessent was right about a large percentage of Americans being killed financially.  That started back in his early hedge fund days and continued through consecutive Red and Blue U.S. Presidencies.  

Flashback to 2011, which might as well be 2025:

I have seen so many people -- particularly those in their 50s - 70s -- taken apart by what has happened in their industry as greed has hollowed out the economy. These are people took pride in their jobs and held themselves to this invisible standard that we all just took for granted, but is being wiped out. 

The Carlyle Group scares me more than anything I've ever seen on Wall Street. It seems to exist to corrupt politicians and it's hard to know who they even represent. 

I watched a video interview of (David) Rubenstein and his arrogance is really beyond tolerance. He was going on about the debt ceiling problem and how there would need to be cuts in services and higher taxes. When the reporter asked him about tax on carried interest he turned really disdainful and said that this "only" amounted to $22 billion over some number of years and this was not serious money. Boy, nothing like everybody doing their small part to save the country from oblivion!

It turns out the little people get to do a big part to save the wealthy......

Not Enough Sustenance or Substance

My wise friend wrote:

You know what I found interesting about the president's speech.? The amount of lies. Not just because they were coming out of his mouth which is normal, but the speech writers are complicit. I analyzed the speech through perplexity which gave immediate feedback of the inaccuracies. So everything is deliberate, sad state of affairs.

Maybe next speech we could have a scroller on the networks to FACT CHECK in real time with AI?

So why are the lies needed?  He shared:

If you listen to Treasury Chief Bessent on CNBC this morning they will use the premise of defunding the government to inject the private sector or PE guys into the equation with their trunks full of capital (courtesy of the US government and Federal Reserve System).  On the backs of little people the PEU boys will increase their stake and concentration of spending (which basically means they will be loaning money into the private sector for ownership of the US economy). 

All of your warnings and all of your fears coming true under the guise of "this is unsustainable." Winning!

I wanted the government to stop serving the markup men, who love paying interest but hate taxes, and dance back and forth between PEU roles and government service.  Instead the government is cutting people via the PEU playbook to send more business to the "dry powder" markup men while cutting their taxes.  

I wanted government to ensure AI is safe and produces sound analysis/recommendations.  Instead the government is conducting a giant uncontrolled experiment with AI impacting federal departments with critical safety and health responsibilities.  TechGods are renowned for horrific customer service, while PEUs know how to crapify services using standard models.

I wanted the big money boys, TechGods and PEU legends, to quit being "feeloaders" and pay a higher tax rate on their ever burgeoning wealth. Instead Trump II plans to cut their taxes.

How many billions does one really need?  It's never enough for the live forever TechGods or the greed and leverage PEU boys.  That they've paired up for nonstop Trump II puckering is a very bad sign for the common folk.

MUSKFEST Is Here!

The last two decades in the U.S. have been secretly sponsored by the private equity underwriter (PEU).  America's TechGods copied the PEU "new affiliate" playbook and Trump engaged them to unleash it on federal workers.

Elon Musk's Department of Ungodly Greedy Executives Biased Against Government (DOUGEBAG) continues loading its AI NVIDIA machine bank with the knowledge of federal workers.  Musk, known for his innovations (intellectual theft), found a new way to mine federal worker brainpower.  

FEST or "federal employee shock therapy" is the latest strategy for the DOUGEBAG Group.  FEST is being used to input new $1 credit card limits in employees' brains, prompt fertile, attractive young women into thinking Elon is hot and inculcate the new culture of "thank you, sir.  May I have another one?"

Little people have to pay for tax cuts for billionaire PEU legends and their new TechGod brethren.  TechGods of varying order are embedded in DOUGEBAG, while the majors can't lick Trump's toes fast enough.  It's all part of newest hottest thing, MuskFEST.  Guaranteed to leave burn marks!

Confession:  Any connection this post has to the current Trump/Musk reality is pure providence.

Update 3-7-25:  The Trump II/Musk co-presidency informed Cabinet members yesterday that they are in charge of their department's staffing but that Musk and Trump are watching.  Musk said "individual departments are ultimately responsible for their cuts."  In PEU speak, DOGE creates the staffing model which departments have to comply with, or else.  

A Musk loyalist riding the insider money train informed staff at the FAA that if they impeded his work they could and would be fired.

Capital Dreams

The "Tax Cuts for the Rich Gang" celebrated cruelty to the poor and people of lessor station. Trump II, the digital Caligula, wants disruption nearly everywhere and at all times.  Dysfunctionally assisting the effort is a man with six companies who self medicates and seemingly has a new baby a week, Elon Musk.

TechGod Musk is a special government employee, essentially a Trojan Horse dismantling the government from the inside, only Elon does not use Trojans.  

The Carlyle Group, a politically connected private equity underwriter (PEU), located in Washington, D.C. in 1987 to be close to the levers of power and Uncle Sam's wallet.  Carlyle's founders were lobbying, non-lobbyists.  In other words elected officials and high level appointees took their calls and accepted their invitations.  

Carlyle's tea leaves are warning "buckle up."  PEUs love disruption, the kind that is properly signaled.  When assets prices are going up they monetize (sell/flip) affiliates.  When they are going down, often times debt holders get the company keys.  

Trump's tariff whimsy has investors "jerking back and forth."  They are on.  They may be suspended/postponed.  They're off.  

TechGods and PEU legends have a different "buckle up" than the common folk.  Their "buckle up" is the warning from the pilot of their private jet that turbulence is in the area.  The common folks "buckle up" is after the pants have been dropped and elected officials had their way.  I can envision the three men pictured above each having their own "buckle up" fantasy.

People on Medicare, Medicaid and Social Security need to pay attention to Trump II's changes.  It may be a matter of life and death.   When you need the government's urgent assistance, TechGods (who have horrific customer service) have an aneurysm inducing chatbot for you.  

"Buckle up" all you private jet flyers, this bump won't kill you.  Common people, their private jet is getting ready to land on your head.  It's a hell of a knock.  

Update 3-6-25:  Federal employees have a "buckle in" that is done in preparation for Musk induced federal employee shock therapy.  The AI machines need access to that worker's brain and to install new $1 credit card limits, among other Trump II/Musk priorities.

Update 3-7-25:  Carlyle sees exits ramping up in 2025.

"He's Baaacckkk: Cheffy Don!"

President Trump addressed both houses of Congress last night in his usual bombastic manner, unanchored from reality.  The Insane Red Team fawned over their titular chief while the Blue Team mostly melted before America's meanest bully.

Trump's style is to lie, cheat and purloin everything he touches with the clear intent to make everything yours, his, while demeaning you to the point of implosion.  

I offer the following analogy for Trump's modus of operation.  

"Chef Trump craps on your plate, gives it the finest presentation and tells you it's his best steak.  When you protest, Chef Shitter calls you a low class, stupid person who cannot recognize his culinary masterpiece.  This leaves you shell-shocked by the verbal assault, trying to find words to respond to the insane situation you find yourself in.  

Master Shitter ratchets up the assault by throwing you out of the restaurant.  His loyal wait staff chase you to your car, screaming obscenities and as you drive away fearing for your life, they throw your finest 'Trump steak' on to the windshield.  Your wiper fluid turns "the steak" into a 180 degree brown smear.  Yes, Trump's words and actions leave a stain for a very long time, one that obscures your vision."

Bloomberg TV just showed Carlyle co-founder David Rubenstein interviewing fellow private equity underwriter (PEU) Steven Mnuchin.  Rubenstein did his usual "highest calling of mankind is private equity" bit.  Mnuchin did not cite his robo-foreclosing California homeowners in the aftermath of the Fall 2008 financial crisis.  He said his public service under Trump was his highest calling and opined that Rubenstein might be advising Trump in his second term.  

Rubenstein replied something like "Not regarding the Kennedy Center," which got a chuckle from the crowd. 

   

The Kennedy Center, now serving Trump's finest intestinal output "steaks".....remember the chef does not want or appreciate feedback.  

Update 3-6-25:  My wise friend wrote:

Commerce Chief Howard Lutnick went on CNBC to tell the American worker you will be stronger with robotics in the future and Donald Trump's economy.  Do not be worried as Elon Musk so rapidly transfers government (for his own use/purposes).

Lutnick is one of Cheffy Don's best waiters and Elon, he's a supreme supplier.