Author Archives: Yves Smith

Why You Should Not Trust the Financials of Private Equity Owned Companies

Yesterday, we discussed how a family private equity firm Swift River, which is owned in part by Tony James, Blackstone’s head of private equity business, purchased a software company called iLevel Solutions rom Blackstone itself.

Today, we are going to examine iLevel in greater detail. We will see that this company is built from the ground up as vehicle to convince PE investors and the SEC that Blackstone and other PE firms have implemented robust financial controls over the companies they own. The reality, however, is the opposite

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Rajiv Sethi: Information, Beliefs, and Trading

Yves here. This is a terrific post, and I think readers who are in the unfortunate position of having to invest in the markets will relate to Sethi’s analysis (personally, I hate trading, I wish it were possible to be a long-term investor, but that’s become an awful lot like driving a Model T on a Nascar track). The use of Intrade data and discussing Obama v. Romney-biased speculators is both clever and makes the discussion accessible. And I must confess to being very attached to my “priors” and too willing to fight the tape!

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Robert Prasch: The “Lessons” that Wall Street, Treasury, and the White House Need You to Believe About the Lehman Collapse

Five long years have passed since the demise of the once venerable firm of Lehman Brothers. To mark the occasion, Wall Street, the United States Treasury Department, the White House, and their several political proxies and spokespersons have taken to the mass media to instruct the public in the “lessons” to be drawn from the financial crisis of 2007-09. Regrettably, we are witnessing the propagation of several self-serving falsehoods in the hope that the public can be induced to embrace them now that the immediacy of the events in question is in the past. Some of the lessons are so flagrantly false that they demand immediate correction.

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Senator Diane Feinstein’s Husband Selling Post Offices to Cronies on the Cheap

To quote famed short seller David Einhorn: “No matter how bad you think it is, it’s worse.” On the “corruption among what passes for our elites” front, this story about self-dealing in the privatization of the Postal Service gives an indication of how bad things really are.

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