By Nanea, a private equity insider
Last week, the New York Times reported on its successful effort to unseal evidence in a lawsuit alleging that the biggest private equity firms (so called “mega-buyout” shops) colluded to limit competition with one another during the Buyout Boom that preceded the financial crisis.
The story made me think about some of my own, non-business-related experiences with cooperative behavior among private equity rivals.
Read more...It’s troubling that some stinging charges against the very biggest names in private equity are getting only passing attention in the financial media.
Read more...Just because the banks are on one side of an issue does not always mean they are wrong, just that they might be right for the wrong reason.
Read more...By Nanea, a private equity insider
I thought I would make a brief digression into how private equity GP*s are able to use a web platform called IntraLinks as a vehicle to intellectually capture and, in a sense, hold prisoner their LP investors.
Read more...Yves here. Our next set of posts in our private equity series will provide background on how the industry operates
Read more...No matter how bad things get, it turns out they can always get worse. Wall Street is about to foist a new “innovation” on investors that even the ratings agencies won’t touch.
Read more...By Nanea, a private equity insider
I’ll be having much more to say later about the Bain documents posted on Gawker.
In the meantime, I would like to point out the utterly misleading nature of the statement issued by Bain Capital in response to the documents’ release.
Read more...As a public service, I’m pointing to an important post at Gawker on some Mitt Romney investments that he has until now managed to shield from scrutiny.
Read more...By Nanea, a private equity insider, and Yves Smith
Private equity practitioners, including most famously Mitt Romney, often depict their sector as the epitome of private enterprise. These claims are false. Private equity firms not only depend directly and substantially on government support, they have also actively cultivated links to the state.
Read more...We are in the midst of a sea change in terms of the relationship of ordinary Americans to the housing market. Policymakers are not only in denial as to its magnitude, but are actively enabling courses of action that are likely to prove destructive.
Read more...In the coming weeks, Naked Capitalism will publish an investigative series on the private equity industry that will include articles written by current industry participants with considerable experience.
Read more...Reader Hecht pointed out a new piece by Steven Davidoff at the New York Times’ Dealbook, illustrating the lengths to which the Fed will go to defend incumbent bank managements.
Read more...Adam Davidson is moving up in the world. He has gone from fellating the 1% to the top 0.1%.
Read more...Wonder why states are broke? It isn’t just the global financial crisis induced knock-on effects of a plunge in tax receipts and a rise in social safety net payments. Nor is it just pension fund time bombs (note that despite the press hysteria, the problem is unmanageable only in a comparatively small number of states, with New Jersey way out in front, thanks to 15 years of the state stealing from the workers’ kitty, plus a decision to take big risk at exactly the wrong moment, in 2007, which resulted in large losses). A significant unrecognized culprit is companies managing to divert tax revenue from stressed states to their coffers.
Read more...The Wall Street Journal and New York Times have reports on a pilot program at Bank of America to allow homeowners who are likely to default a graceful exit. The Charlotte bank will allow 1000 borrowers in New York, Arizona, and Nevada to turn in the deeds to their houses in return for a one year lease with a two one year renewal options at or below market rates. The program will be only with borrowers invited by the bank, which will target homeowners who are at least two months behind on payments but can demonstrate that they can pay the rent. The Journal cites an example of a Phoenix home with a $250,000 mortgage with payments of $1600 a month. It estimates the rent as $900.
This is clearly a preferable alternative for homeowners to foreclosure. They escape the credit score damage, stress and indignity of the foreclosure process and save moving costs. They are also spared the difficulty of finding a landlord who will accept a tenant with a tarnished payment record. It isn’t clear how the program will handle the usual rental deposit. So what’s not to like?
Read more...