Siphon Off the Rich Juice: James Coulter and Leslie Alexander

Zero Sum Empire

Billionaires in the News: Billionaire Ray Dalio, CEO of the world’s largest hedge fund Bridgewater Associates, is worried that capitalism might not be working for the majority of people. So, he wrote a long essay about it and posted it to LinkedIn like any normal person would. Then he did interviews about the letter with NPR and 60 Minutes. The letter is a kind of Rosetta Stone that starkly lays out the peculiarities of the billionaire mindset. We didn’t want to get bogged down in a close reading here, but we’re planning a much more developed analysis of it in the near future. Spoiler alert: The letter is a defense of the status quo that targets people who see themselves as part of the “rational center.” Isn’t it funny how “political centrism,” the machine that brought you both Ray Dalio and the crises of capitalism he describes, is still assumed to be where levelheadedness and practicality reside in American politics? https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-parts-1-2-ray-dalio?trk=portfolio_article-card_title This week’s census entries (@ 14:00): Our two billionaires for this week are James Coulter and Leslie Alexander. Coulter runs TPG Capital, which is one of the largest private equity firms. He loves to say stuff like "Data is the new oil." We spend a lot of time talking about what private equity is and how it works. The cool thing about private equity is that it has about $2 trillion in assets under management, making it one of the largest sectors of the economy and no one except the super rich are allowed to participate in it. If corporations are people, then PE firms are vampires. Leslie Alexander is the former owner of the Houston Rockets who is mixed up in “securitizing” private student loan debt taken out by students to pay for-profit colleges. Securitizing means “bundling,” which means packaging and reselling debt to investors, which, as far as I know, has caused no problems whatsoever in the past. His student loan company, First Marblehead went bankrupt because of too many people defaulting on loans. The company rebranded as Cognition Financial and the website says they do “private student loan solutions you can trust,” so presumably they’ve fixed all the problems and everything is good now. Episode notes: I didn’t explain the Saudi/Blackstone infrastructure investing deal very clearly, so here’s an article that spells things out. I suggest making sure you read the “skipping deals” and “royal privacy” sections of the article. https://www.bloomberg.com/news/articles/2018-10-22/how-blackstone-landed-20-billion-from-saudis-for-infrastructure Here’s a link to Josh Kosman’s book on PE: https://www.amazon.com/Buyout-America-Private-Destroying-American/dp/B005DI8VK0