Looking Backwards …
LB #1
A few months ago, I read the book “These are the Plunderers by Gretchen Morgenson and Joshua Rosner.” It is a detailed account of how private equity works. They use the system of capitalism to wreck businesses, communities, and lives. They own many retirement homes and cut services and the life expectancies at their homes is less than their competitors just as a sampler so your blood can boil like mine did. They skate along the edge of illegality but have enough connections or pay well enough to make sure that their racket continues. As a dyed in the wool capitalist, it made me sick. I felt like a liberal for a couple hours and that made me sick. It was a rough weekend. I had a hangover from reading, but I digress. Here is a description of their book from Amazon, “The authors show how companies absorbed by private equity have worse outcomes for everyone but the financiers: employees are more likely to lose their jobs or their benefits; companies are more likely to go bankrupt; patients are more likely to have higher healthcare costs; residents of nursing homes are more likely to die faster; towns struggle when private equity buys their main businesses, crippling the local economy; and school teachers, firefighters, medical technicians, and other public workers are more likely to have lower returns on their pensions because of the fees private equity extracts from their investments. In other words: we are all worse off because of private equity.”
These guys are in essence the sleaziest of the sleazy. They are also super rich, and I mean super rich. Apollo is the worst of the offenders and much like Ghandi after a hunger fast, you could have knocked me over with a feather. Here is the Headline from ZeroHedge “Apollo slapped with lawsuit alleging “Widespread Fraudulent Human Life Wagering Conspiracy.” And their reporting as follows
“Apollo Global Management has been entangled in a scandalous lawsuit and accused of acquiring illegal life insurance policies on senior citizens through a complex web of shell trusts.
The company allegedly used an affiliate, Financial Credit Investment, to manage about a $20 billion portfolio of stranger-originated life insurance policies, effectively engaging in what the lawsuit claims:
“In short, Apollo has been carrying out a widespread fraudulent human life wagering conspiracy designed to not only hide its involvement, but to create the false appearance that the policies it owns are somehow legitimate.”
The complaint continues:
“Worse still, when Apollo senses a claim is going to be brought, it attempts to dissolve its shell entities to give itself yet another layer of protection.”
This scheme was designed to give the policies the illusion of legitimacy. Martha Barotz’s estate initiated the legal action filed in Delaware’s Chancery Court last Friday. It raises serious questions about Apollo’s ethical practices. This scheme was designed to give the policies the illusion of legitimacy.
In this way, the senior citizens have no idea who owns a policy on their life, and who wants them dead,” the suit said, adding, “Apollo was fraudulently and illegally using these shell entities to perpetuate human life wagers not only on the life of Mrs. Barotz, but on the lives of hundreds (if not thousands) of other senior citizens.”
I’m sorry, charging $7 for an aspirin raises questions about ethical practices. Josua Roshner the book’s co-author probably said it best on twitter “One has to ask: with Apollo managing hospitals, nursing & hospice facilities & also the retirement accounts of seniors are they essentially taking a straddle position on seniors by buying life insurance policies on them?”
Betting on when people die to profit when you own hospitals and nursing and hospice facilities might be one of the most sobering reveals since I learned bacon wasn’t a food group. The fact that the temptation exists to create policy to reduce lifespans for profit. It’s stunning, and the fact that they have a $20 billion portfolio that they are trying to hide is even more stunning.
One of the biggest recipients of transferred wealth in the last 30 years has been private equity, largely because of the low interest rates and their ability to structure deals. They are some of those that are screaming the loudest right now for rate cuts. I hope Powell keeps rates higher for longer until every last private equity cockroach disappears back into whatever New York City suburb they came from. There is a special special place in hell waiting for these people.
LB#2
The Wall Street Journal writes about the colossal blunder in the down unders that the state of New York just performed on its citizens. “The New York State Energy Research and Development Authority called off contract negotiations with three wind developers after turbine manufacturer GE Vernova said it couldn’t deliver 18-megawatt turbines for the projects. As a result, the projects would have to be redesigned with more and smaller turbines that would make them noneconomic… New York regulators recently struck agreements with offshore developers at prices of around $150 per megawatt hour, more than a third higher than those in 2019. For comparison, the wholesale price for natural gas power is around $30 a megawatt hour.
New Yorkers will get stuck paying excessive prices for offshore wind for 25 years to meet their political class’s climate goals. So even if offshore wind costs drop, the state will be locked into exorbitant long-term contracts. Meantime, the state’s grid operator has warned that New York City could face power shortages as soon as next summer owing to the shutdown of gas and nuclear power plants. Another climate-policy fiasco.”
We have talked about how these projects are failing at a faster and faster pace because they simply don’t make economic sense, and the only reason they are still ongoing concerns is government bailout money. We will talk about the musk of subsidies in a minute. I just want to point out that the price of natural gas is now negative this last week in Texas. We are drilling so much oil and a byproduct is natural gas and they are being forced to burn it off because there is no market for it, yet New Yorkers are going to pay 5 times what it would cost for power if they used natural gas. Tell me again how AI and EV cars with their massive electrical footprints are going to do? They will fare about as well as Oprah did on Weight Watchers. They, like she, will be looking for another solution soon.
LB#3
Janet Yellen announced the quarterly refunding announcement this week and we are borrowing a ton of money. I wish, a ton is 2,000 lbs. that is, but this will be $243 billion in Q2 and $847 billion in Q3 estimated per ZeroHedge. Folks, this is on the heels of a really good stock market year which adds capital gains taxes to the government revenue in the springtime so can you imagine what we will have to borrow if the market turns south? What will happen if businesses start losing money and don’t have to pay any taxes, because that is coming. I think the deficit jumps to $4 trillion, and that is at a minimum. If we go into a recession, interest rates should come down, but remember the government interest expense is the private sector’s income. More trouble for tax receipts for the government and the debt. This is why we just don’t have a good path to choose from right now. Less jobs less consumer spending which is 72% of the economy, and that is bad. Its like hunting pigeons with a ten-gauge shotgun, even if you shoot a couple there just isn’t anything left to eat. It’s a fruitless endeavor.
Looking Forwards…
LF#1
Bill Pan reported in the Epoch Times via ZeroHedge “The Biden administration has rolled out a set of new guidelines, under which an employer would be deemed liable for harassment for referring to a worker by an unwanted pronoun or requiring the worker to use a restroom that aligns with his or her biological sex. The Equal Employment Opportunity Commission (EEOC) published the new workplace harassment guidelines on Monday after approving them in a party-line 3–2 vote on Friday. The new document enshrines gender identity as a category protected against harassment, just like sex, race, religion, or disability.
“Harassing conduct based on sexual orientation or gender identity includes … repeated and intentional use of a name or pronoun inconsistent with the individual’s known gender identity (misgendering) or the denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity,” the new guidelines state.”
Folks, I’d love to sit here and blow sunshine up your ass, but the time is coming when everyone is going to have to choose. Choose whether you want to live in this crazy crossdresser enabling world or be honest and accurate in your speech. Imagination and reality are becoming blurred and that is the scenario when power grabs take place. Anyone will do. I believe Adam Taggart from Thoughtful Money said it best the other day, “When you have stood outside in the rain by the highway long enough, you will get in the car with anyone.” This violates my right to free speech to…I’m not going to explain it anymore if you can’t figure it out, then you are the problem anyway. It is coming people…choosing time.
LF#2
So last week before the Fed shenanigans, NYCB dipped under $3 a share yet again and this time after a $1 billion infusion a few weeks back. Why, because it is still loaded with toxic shit. They reported $800 million in defaulted loans in the first quarter, almost a 400% increase according to Suzannah Cavanaugh who writes for a real estate site called the Real Deal. This is the bank that had internal control issues and is now on its third CEO in just a few months and this is what happened, the new CEO gave just 12 hours notice before the conference call because they were completing a credit review. Cavanaugh reports
“In other words, NYCB did not take a hard enough look at its mortgages The team promised to pull out the magnifying glass and review those loans after staving off collapse with a $1 billion infusion in early March.
In a first-quarter earnings presentation, it showed its work to date… Its multifamily analysis left the bulk of those debts unturned. NYCB reviewed about one-third of the $37 billion portfolio — 250 loans — and focused on its largest mortgages or those around $54 million. That’s 250 down, 4,322 mortgages left to go, according to its earnings presentation.”
They have over 4,000 loans yet to review and do you think that the largest borrowers are by percentage the worst of the loans or has increased interest rates hurt the small borrower more? This is the bank that lent to New York City apartment owners with a city that now has rent controls and can’t raise prices in an inflationary environment. This bank and dozens if not hundreds more are sitting here waiting. They are waiting for interest rate cuts that don’t come because the inflation numbers aren’t helping. They are zombie banks. They are the walking dead.
LF#3
But less we fear that real estate could get any worse, the Housing and Urban Development or HUD is mandating new energy standards costing new homes to be wildly more expensive. The National Association of Home Builders says the new energy rules can add as much as $31,000 to the price of a new home. Now, if this is balanced out by energy savings then it might be worth it I ask. The payback time is over 90 years. Mike Shedlock writes for Mishtalk.com that this increase will only further add to the impossibility of home ownership for another tranche of people. Taxpayers will also get to bear some of this cost with …do you smell that it is a Musk an Elon Musk, that must mean tax subsidies and that is right, numerous tax incentives will help the government pay for these items and costs aka the taxpayer. It is as if I was reading a playbook of what not to do to fix the economy and this is what our leaders are doing. We are having a fiscal emergency of $2 trillion deficits, and we are making housing more unaffordable, we are sending money to foreign countries to blow up, and we are having to have the largest debt offerings in history of the world. Ohh yeah, baby, this is going to work out great, like defunding the police, allowing Congress to trade stocks that they regulate, or adding pineapple to pizza. It is a slippery slope of morale decline and it started in a kitchen near a sit down Lady Pac-man and we allowed the fans of the Village People to put fruit on a pizza. No one saw those early signs and now every house has to have a $31,000 heat pump.
Sincerely Yours,
C Thomas Printer
The Dow Jones finished trading at ….38,675
The 10-year Treasury bond is at …a 4.497%
The price of Brent Crude is … at $82.96 per barrel.
The price of gold is … at $2,310/oz.
The price of silver is … at $26.78/oz.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.