23 September 2017

Linkage


Gordon Ramsay makes a simple and intriguing breakfast:

22 September 2017

Toys R Us Implosion Driven by Private Equity

That noted communist rag the Financial Times has observed that the Toys R Us bankruptcy was driven by private equity looting:
Who brought down Toys R Us? The 69-year-old toy behemoth listed a host of reasons for its slide into bankruptcy in a Chapter 11 regulatory filing, including “expensive debt service”, “unrelenting competition from ecommerce and big box retailers” and a news report that turned its consideration of bankruptcy protection into a self-fulfilling prophecy.

But the blame is perhaps to be placed most squarely on its private equity ownership. Toys R Us has spent more than $250m a year servicing $5bn in long term debt, which was “not a sustainable situation,” one investor said, as the company faced increasingly crushing competition from Amazon and Walmart.

After years of rearranging its debt burden, like other big leveraged buyouts of the pre-financial crisis era, it is presenting a restructuring under bankruptcy protection as a bid for freedom. Toys R Us says it now has a chance to bring its “vision to fruition”, announcing plans to invest in marketing and technology and even promising to raise store employees’ wages.

………

By 2005, as competitors ate into its profitability, Toys R Us hired Credit Suisse and found a buyer: a consortium of private equity firms KKR and Bain Capital, which had experience in retail, and Vornado, the real estate investment firm. The three firms put in $1.4bn in cash, split equally, and borrowed over $5bn to finance the transaction.

………

The three buyers who leveraged it are now expected to have their equity stakes wiped out in the restructuring. KKR and Vornado have written off their investment over time, while Bain has been carrying it near zero.
The Barbie brand owes a debt of gratitude to Toys R Us, which heavily promoted it in its stores, such as this New York outlet in 2007 © Getty

However, the losses to the firms and their investors are mitigated by the fact the buyout firms have paid themselves over $200m in expenses, advisory and management fees, according to SEC filings over 12 years of ownership
The losses accrue to the investors in their funds, the money for expenses and fees, that goes to the firm, and their bonuses.

There is nothing that cannot be ruined through an application of American financial professionals.

H/t naked capitalism

Tweet of the Day


This is really some remarkably astute political satire, which is not something that I would expect from Mad.

It appears that Trump is good for political commentary.

I particularly like the Norman Rockwell sendup.

About F%##ing Time

After a continuing problems with driver vetting, incident reporting, and its treatment of its employees, Uber has been stripped of its operating permit by the Transport for London.

Specifically, they have been ruled that Uber is not a, "Fit and proper," private car operator:
Uber has been stripped of its London licence in a surprise move that dealt a serious blow to one of Silicon Valley’s fastest rising companies and sparked an outcry from a coalition of customers, government ministers and drivers at the ride-hailing company.

The firm’s application for a new licence in London was rejected on the basis that the company is not a “fit and proper” private car hire operator.

Uber’s cars will not disappear immediately as its current licence expires on 30 September and it plans to challenge the ruling by London’s transport authority in the courts immediately. The hailing app can continue to operate in the capital – where it has 3.5 million users – until the firm has exhausted the appeals process. Uber has 21 days to launch an appeal but can continue to operate until the process expires – which could take months.

Uber chief executive Dara Khosrowshahi wrote to staff on Friday confirming that the company would appeal the ruling. He said he disagreed with the decision but it was based on past behaviour.

“The truth is that there is a high cost to a bad reputation,” he wrote. “It really matters what people think of us, especially in a global business like ours.

………

TfL said it had rejected the company’s application to renew its licence because “Uber’s approach and conduct demonstrate a lack of corporate responsibility” in relation to reporting serious criminal offences, obtaining medical certificates and driver background checks.

The licensing body also said it was concerned by Uber’s use of Greyball, software that can be used to block regulatory bodies from gaining full access to its app and undertaking regulatory or law enforcement duties.
What Khosrowshahi is basically saying is that Travis Kalanick is simply too toxic to run Uber.

As Hannah Jane Parkinson has noted, "You name it, and if it’s sh%$#y behaviour, Uber has probably done it." (%$# mine)

Uber's primary innovation has always been a willingness to behave with complete disregard for the law and for ethics.

It's nice to see that bubble popped.

Quote of the Day

Police Don't Need Better Training; They Need to Stop Treating Noncompliance as Justification for Violence.
The Nation
This is an article about how police departments routinely treat disabled people as violent, because the disabilities prevent immediate compliance, and police routinely apply violence to any form of noncompliance.
Magdiel Sanchez, a 35-year-old Latino man, was sitting on his porch in Oklahoma City on Tuesday night as two law-enforcement officers approached his house. He got up and walked toward them, when, according to news reports and a statement, the officers noticed he was holding a metal pipe. They started giving him “verbal commands” to lie down, then one fired his Taser and the other shot him in the chest with his sidearm. Sanchez died. Officers later claimed not to have heard neighbors shouting that Sanchez was deaf and couldn’t hear their commands.

The police were there because allegedly Sanchez’s father had been in a hit-and-run (injuring property, not people, if the accusations are true). Sanchez carried the pipe, neighbors said, to ward off dogs. He was deaf and reportedly developmentally disabled. In a statement, the ACLU said, “Magdiel Sanchez was shot at his own home, without having committed any crime, and in front of neighbors who knew he was deaf trying to communicate to the police that what they were about to do was wrong.”

Sanchez is far from the first deaf or disabled person to be killed or brutalized by police. It happens almost every day. According to The Washington Post, police have shot 165 people in mental-health crisis in the first 263 days this year (and 715 total). When you add people like Sanchez and individuals with invisible, undiagnosed, or unrevealed disabilities, the numbers start to get much higher. In a white paper I co-wrote in 2016 for the Ruderman Foundation, I noted that disability-rights advocates routinely argue that a third to a half of all people killed by police are disabled. Most of those people, especially in cases where police clearly misused lethal force, turn out to also be marginalized by race, class, gender orientation, or other factors that intensify vulnerability.

………

At least four disabled people died at the hands of police this week. One previous case of unjustified police violence came to light. Except for the brief media attention of the Sanchez and Leibel cases, that’s a pretty normal week. It’s unlikely anyone will be held accountable, except possibly in the situation where Leibel, a white teenager in an affluent neighborhood, was brutalized. There, the combination of powerful video, a compelling victim, widespread coverage, and a good lawyer might help. In the other cases, the multiply marginalized status of the victims plus the lethality of the encounter will make accountability difficult, if not impossible. And then next week, alas, the same types of stories will play out again, and more people will die.
The subhead on the article quoted above makes it clear:  The problem is not individual police officers, or even individual policies.

Rather the problem is the intersection of court decisions and law enforcement culture which makes the application of violence routine, and in fact rewarded, in circumstances that no decent human being would do so.

21 September 2017

Ka-Ching!

Hillary Clinton says she made a mistake when she gave speeches on Wall Street after leaving government. Taking money from banks, she writes in her new memoir, created the impression she was in their pocket.

Her old boss doesn’t seem to share her concern.

Last month, just before her book “What Happened” was published, Barack Obama spoke in New York to clients of Northern Trust Corp. for about $400,000, a person familiar with his appearance said. Last week, he reminisced about the White House for Carlyle Group LP, one of the world’s biggest private equity firms, according to two people who were there. Next week, he’ll give a keynote speech at investment bank Cantor Fitzgerald LP’s health-care conference.
So much for hope an change.

20 September 2017

They Really are Chicken Sh%$s

Trump's HHS Secretary Tom Price has been burning up private jet hours so profligately that it might make Steve Mnuchin blush:
In a sharp departure from his predecessors, Health and Human Services Secretary Tom Price last week took private jets on five separate flights for official business, at a cost of tens of thousands of dollars more than commercial travel.

The secretary’s five flights, which were scheduled between Sept. 13 and Sept. 15, took him to a resort in Maine where he participated in a Q&A discussion with a health care industry CEO, and to community health centers in New Hampshire and Pennsylvania, according to internal HHS documents.

The travel by corporate-style jet comes at a time when other members of the Trump administration are under fire for travel expenditures, and breaks with the practices of Obama-era secretaries Sylvia Mathews Burwell and Kathleen Sebelius, who flew commercially while in the continental United States.

Price, a frequent critic of federal spending who has been developing a plan for departmentwide cost savings, declined to comment.

………

Price’s spokespeople declined to comment on why he considered commercial travel to be unfeasible. On one leg of the trip — a sprint from Dulles International Airport to Philadelphia International Airport, a distance of 135 miles — there was a commercial flight that departed at roughly the same time: Price’s charter left Dulles at 8:27 a.m., and a United Airlines flight departed for Philadelphia at 8:22 a.m., according to airport records.
Seriously, what is wrong with these people?

Now Which Pathological Liar Are We to Believe?*

Turkish President Recep Tayyip Erdoğan has claimed that Donald Trump apologized for forcing Turkish security forces to attack unarmed protesters, while the White House has denied this:
The White House on Wednesday denied Turkish President Recep Tayyip Erdogan’s claim that President Donald Trump called him to apologize for an incident in May where Turkish security agents allegedly attacked protesters in Washington.

A White House spokesman told the Hill late Tuesday that Trump and Erdogan “discussed a wide range of issues but there was no apology.”

“It’s not true,” White House spokesperson Lindsay Walters said, according to BuzzFeed News reporter John Hudson.

………

Washington, D.C. police in June issued arrest warrants for nine Turkish security guards and three Turkish police officers accused of attacking protesters who gathered outside the Turkish ambassador’s residence. A grand jury in August issued indictments for three more Turkish security officials charged with attacking protesters.
This is seriously f%$#ed up.

*Not my line. It's from the comments thread of the post.


Tweet of the Day

FWIW, "Peter Douche" is a parody account mocking Clinton supporter Peter Daud, and he captures the reality of the corporate "Democratic Party" moderates.

Quote of the Day

That said, if all it takes to neutralize a billion plus in Clinton campaign contributions is $100K in Russian Facebook ads and some Twitterbots, then then political class has a lot to answer for in terms of its ROI.
Lambert Strether
For the non-financial types, ROI=Return On Investment.

The Democratic Party consult class really is hopelessly incompetent.

Spain is Going Nuts

There are elements of the population of the Spanish province of Catalonia who want to secede from Spain.

They are pushing for a referendum, and the central government in Madrid has responded by sending federal police into to seize government buildings and arrest politicians:
Spanish national police have stormed ministries and buildings belonging to Catalonia's regional government to put a stop to the region's independence referendum.

The Guardia Civil, which acts with the authority of Madrid's interior ministry, is searching for evidence regarding the planned 1 October referendum on Catalan independence, which Spain's Constitutional Court has declared illegal.

In the early hours of the morning armed officers arrived at various Catalan ministries, including the economy department, foreign affairs department, and social affairs department, Spanish media reports.

At least twelve Catalan officials are said to have been arrested, including the chief aide to Catalonia's deputy prime minister, Josep Maria Jové. The arrests come as the mayors of Catalan towns who back the referendum were yesterday questioned by state prosecutors.

Pro-independence crowds have formed outside the regional ministries in support of the provincial government and in protest against the raids and searches.
It should be noted that the Spanish Constitutional Court ruled the referendum illegal, so some sort of action to stop the election is justified, but what is going on now seems guaranteed to inflame tensions and make a peaceful solution less likely.

So, in Europe, we are seeing, the rise of the racist right wing, and now we are seeing a conflict in Spain that has the very real possibility of going violent.

History may not repeat itself, but it does rhyme.

Linkage

Here is a classic Star Wars parody.  It's 20 years old.  I feel old: