Days like this it is hard not to think of the little town in the Missouri panhandle with America's dirtiest air. In New Madrid, the median AQI is 131, thanks to an aluminum smelter where some smokestacks are just 50 feet high...

-a private equity story-
https://www.reuters.com/article/us-usa-pollution-newmadrid-insight/trade-war-tradeoff-how-a-missouri-town-got-americas-dirtiest-air-idUSKBN2391GL

I don't know why the smokestacks are so low. The plant was built in the 1970s in "compliance" with the Clean Air Act.

By locating in a remote town with unusually *clean* air, owners were allowed to emit substantially *more* pollution than the industry standard.


Apollo bought the plant's owner Noranda Aluminum in April 2007, with $214 million cash & $900m debt
2 months later Apollo floated $222m 12-13% Noranda debt & paid itself a $216 million "special dividend."
In 2008 Noranda paid Apollo another $102 million dividend


In 2010 Noranda proposed spending $14 million to lengthen smokestacks to 243 feet to disperse toxic air
Too much, Apollo said
& pocketed another $81.6 million on Noranda's IPO
In 2011 Noranda paid Apollo another $71 million dividend
In 2012 Noranda paid Apollo another $54 million

Noranda tried to offset Apollo's giant sucking sound by aggressively lobbying Missouri officials for a $25 million cut in its annual power bill, an episode nauseatingly detailed in the new @gmorgenson book.
Residents balked.
In April 2015 governor Roy Nixon coughed up the funds

But then that summer a massive molten explosion shut down the plant temporarily. 33 workers were injured & OSHA fined Noranda $7,000, though it appealed & ended up paying less.
Reuters reported the disruption would be a boon for depressed aluminum prices.

And so in 2016 Noranda filed Chapter 11 anyway
Apollo had underfunded pensions by $219 million
The plant shut down
The county school district lost 17% of its budget overnight
The county's average household income immediately dropped $6,000
https://themissouritimes.com/noranda-files-bankruptcy-legislative-action-likely-only-avenue-for-survival/

Trump tariffs brought the plant & its glorious pollution roaring back in 2018, tho just 1/2 its old 900 workers
Record 2020 turnout in New Madrid went 75% Trump.
Bipartisanship found a "solution" to the dirty air: an $8.5 million zero-interest loan to elongate the smokestacks

And that's about the happiest fucking ending you are going to get from private equity, please read my uplifting essay on our barbarian elite here as long as you are stuck inside despairing about climate change.

https://prospect.org/culture/books/2023-06-02-days-of-plunder-morgenson-rosner-ballou-review/


The Story of America's Dirtiest Air in New Madrid, Missouri

This month a busy hospital shut down in Texas
Pondered the National Review:
If Health Care Is So Expensive, Why Do Hospitals Close?
The explanation, @nro warned, was "not sexy"
TLDR—it's poor people. How sick they all are, etc

But what if the problem is actually..rich people?🧵


Herewith, the saga of Medical Properties Trust, the company that bought the now-closed Texas Vista hospital from a PE firm & leased it to PE-owned Steward Health in 2017.

2 weeks later, a journalist investigating a Steward deal in Malta was murdered.  https://prospect.org/health/2023-05-23-quackonomics-medical-properties-trust/

But I'm getting ahead of myself
The story starts in the early 2000s
For-profit hospital chains HCA & Tenet are embroiled in massive fraud cases & shedding "troubled" hospitals all over
But they don't want to sell to just anyone
They're looking for, shall we say, "kindred spirits"

Enter Prem Reddy & Ed Aldag.
Reddy owns a Victorville CA hospital. Sometimes comes to work drunk, assaults colleagues; employs a pedo in-law. But he knows how to make hospitals make $.
Aldag is an Alabama real estate guy.
He forms MPT to buy hospitals & rent them to Reddy.

Reddy wasn't the only hospital operator MPT backed ofc, there was also this Indiana anesthesiologist Kamal Tiwari, for whom MPT built a hospital in 2006. In 2007 the FBI raided Tiwari for running a top-shelf pill mill & sent him to prison; good times.

At some point regulators notice Reddy 's Prime Healthcare is sending $50,000 bills to Kaiser patients & billing Medicare for treating exotic forms of 3rd world malnutrition in overweight patients.
MPT is under pressure to reduce exposure to Prime.
Enter: private equity!

PE firms started plowing $ into hospitals with the Obamacare hypecycle. It was a bad idea destined to end in death & decay, but no one shilled the Private Equity Accountable Care "Revolution" harder than Boston cardiac surgeon/Republican turned Obama fundraiser Ralph de la Torre

Ralph De La Torre ran a chain of Catholic hospitals. Cerberus invested 1/4 billion, renamed it Steward Health, loaded on debt, sold valuable assets, gutted everything.
Predictably this "strategy" failed; also predictably Ceberus wanted a big payout anyhow  https://www.youtube.com/watch?v=tGha9CrstRE

Enter Aldag, who offered Cerberus $1.25 billion for the hospitals so long as Steward promised to send MPT a $121 million rent check each year.
(Aldag's son interns at Cerberus around this point.)
Cerberus takes a $1/2 BILLION dividend.
Only problem: how will hospitals make rent?

Glad you asked. Normally when PE firms overburden hospitals w/ interest & rent liabilities for the purpose of looting fat dividends, hospitals pay them off by overbilling & understaffing.

Ultimately patients die, as in this Apollo/MPT hospital in 2020
https://prospect.org/health/community-hospital-in-deep-red-wyoming

Steward, already shortstaffed, needed to get creative.
Hence Malta.
The Mediterranean microstate had 3 hosptials it wanted to privatize for €70m/year, but mafiosos in charge wanted some of that $ for themselves.
Ralph allegedly promised "brown bags of cash" to close the deal

Daphne Galizia, a Maltese investigative journalist, was hot on the case (and many others.) One of her sons worked for the Panama Papers nonprofit, & she'd uncovered LLCs Malta's ruling elite used to collect bribes & do crime
She blogged relentlessly about the shady hospital deal

Daphne was killed in a car bombing on October 16. Her last post was about Keith Schembri, the prime minister's chief of staff who awarded the contract to Steward.
An SEC whistleblower complaint claims Schembri plotted the assassination all year. He's not been charged in it tho

MEANWHILE back in the US Steward hoarded cash by not paying bills, stifging doctors, residents, travel nurses, landscapers, pizzerias, condo assn newsletters..
An NPR affiliate disclosed in a story about a dialysis provider that cut Steward off that it, too, was owed $ by Steward

Steward also collected $1/2 billion in CARES Act funds, squandered it paying off Cerberus, which cashed out with a BILLION dollar return, leaving Ralph alone to steer the ship

Whereupon, researcher @HedgeyeREITs discovered, he paid himself $100 million & bought a tasteful boat

Here's where I should probably address the state of the hospitals Ralph promised to "revolutionize":
Florida's Rockledge Regional Medical Center had to move its ICU after it was infested with BATS. (Hospital claims the bats haven't invaded hallways; eyewitnesses beg to differ)

Holy Family Hospital, the MA hospital recently cut off by its dialysis vendor, is spending big to litigate a case against a urologist who says he was fired for blowing the whistle on an epidemic of botched circumcisions caused by Steward corner-cutting https://masslawyersweekly.com/2022/11/18/peer-review-materials-admissible-in-doctors-retaliation-case/

Here's a photo of one of the Malta hospitals, from which Steward allegedly collected a quarter billion Euros for doing... it's not entirely clear; the nurses and physicians were paid separately by the government

and I have no idea if Steward played any role in the recent murder-suicide of one of its Florida hospital CEOs by her husband, a health care entrepreneur whose note said he was stressed over the loss of his contract, but that also happened. https://www.chiefhealthcareexecutive.com/view/coral-gables-hospital-ceo-killed-in-murder-suicide-remembered-as-a-bright-light-

And here is photo of the $158 million new hospital MPT is building Steward in Texarkana as of fall 2022, at which point MPT said it had "only "spent $60 million of the total budget. I wonder if this hospital is paying its bills?

But if Steward is a conspicuously insolvent firm that exemplifies the failure of neoliberal institutions, what exactly is MPT?
The REIT has poured more than $5.5 BILLION into this basket case, buying new hospitals, financing "capex" & random loans, 3 hospitals in Colombia (?) etc

And it's not just Steward (though Steward is the deepest cesspool.) Aldag hysterically overpaid for hospitals owned by Apollo, Leonard Green, WCAS, Waterland & other PE firms. Why? Sure, the $16 million salary & 3 Gulfstreams obviously played a role, but..
https://www.wsj.com/articles/hospitals-private-equity-reit-mpt-steward-11644849598

If you're in the business of bankrupting companies for profit -- and most  sources believe MPT is insolvent -- the #1 rule of pulling that off is "be a private equity firm." Not a publicly traded company!
This is the lingering mystery of MPT.

Some MPT shareholders, enticed by its 15% dividend yield, are betting on a federal bailout of the company, which seems .. delusional.
100s of hospitals have shut over the past 2 decades & not a single one has gotten a bailout.
But maybe I'm not being cynical enough.

After all, MPT isn't a hospital, it's a slumlord run by one of Birmingham's richest men that has dutifully lined the pockets of the world's most powerful PE firms.
And as I explain here, our legal system has granted impunity to FAR less impressive crooks
https://prospect.org/health/2023-05-23-quackonomics-medical-properties-trust/

This is a deep dive on Signature, the "other" bank failure of March 2023.  Barney Frank & the WSJ editorial board have called it an "Execution"

Appropriately, Signature's origins date back to an assassination.

The year was 1999, dateline Monte Carlo https://prospect.org/economy/2023-03-23-rich-bank-dumb-bank-signature/

Edmond Safra was a banking legend & 1 of the world's richest men. Born in Beirut (famliy financed the Ottoman Empire caravan trade) & raised in Brazil, he jetsetted between NY, Geneva, Fr. Riviera & a Monaco compound built to withstand nuclear war. For when shit got too real

In August 1998 a $4.8 billion emergency IMF loan to Russia never makes it there. Instead, it lands in 1 of Safra's accounts at his Republic Bank. 3 days later, ruble collapses, with the dollar exchange rate plunging from 6 to 21 https://www.theguardian.com/world/gallery/2014/dec/16/russian-rouble-crash-1990s-in-pictures.

Safra freaks, calls the FBI & starts telling them what he knows about the oligarch embezzlement of IMF funds responsible for devastating the country. DOJ concocts cover story abt a "suspicious activity report."

Spring 1999 Safra makes a deal to sell Republic bank to HSBC. Analysts say he's leaving billions on the table by selling too cheap
Safra has Parkinson's, says he's tired
Also one of Republic's big clients sold Japanese companies $1 billion fake bonds, but that's another story

Fall 1999 Safra gets a visit in France from oligarch Boris Berezovsky, an early backer of Putin. (That would change!) Meeting lasts 3 hours, involves "raised voices." Safra departs for the Monaco fortress & turns up dead in a fire a couple weeks later. https://www.vanityfair.com/culture/2000/12/dunne200012

Obviously it's a Russian Mafia hit sparked by Safra's whistleblowing.  Duh, right?

But wait! What if what REALLY happened, is that Safra's ex-Green Beret nurse staged the whole thing in an elaborate ruse to get closer to the billionaire by "saving" him from a gang of masked bandits? That's obviously what actually happened, Monaco prosecutors decide.

Back in NY, Republic managing director John DePaolo hatches "Project Normandy." He thinks HSBC will ruin Republic's vibes, so he & 65 colleagues plot a new bank called Signature. They get seed investment from an Israeli bank, also an oligarch fave. https://www.occrp.org/en/daily/12251-israeli-bank-laundered-fifa-bribes-aided-billions-in-tax-evasion

One of Signature's first clients for life was Irv "Gotti" Lorenzo, viceroy of Def Jam's Murder Inc., accused in 2005 of laundering drug money. "If a client gets in trouble, we'll look into" it, DePaolo says. "Other institutions will say, 'You're gone.' https://www.wsj.com/articles/the-only-bank-this-hip-hop-mogul-will-use-1440978447

There was evidence Signature did not look too hard, however. One lucrative client Bill Landberg, later indicted for stealing $66 million, was suspected by bankers of variously "check kiting" & running a "Madoff Ponzi." Perhaps unsurprisingly, no one went to the FBI.

We know this bc the month before it was failed, Signature was sued by a British Virgin Islands hedge fund that lost $2 million to Sam Bankman-Fried's crypto ponzi. The fund accuses Signature of knowing FTX was a "Madoff Ponzi" & abetting his robbery https://www.courtlistener.com/docket/66791627/1/statistica-capital-ltd-v-signature-bank/

Back in 2019, Signature had made a huge push into crytpo following the collapse of another Ponzi-like business model, the New York landlord biz. Housing activists had dug into Signature's relationship with notorious junior slumlord Raphael Toledano https://therealdeal.com/new-york/2022/02/01/toledano-banned-from-ny-real-estate-for-5y/

What they found was that Signature had been originating mortgages on Toledano's properties to a private equity firm with a coverage ratio of 0.83, meaning rent payments would not cover the mortgage. The only way to pay the mortgage was to massively hike rents: which, illegal.

But there were loopholes in rent stabilization laws. Vacant units cld be deregulated; households making $200K cld be deregulated; landlords cld use loopholes + threats + bribery to kick out tenants & hike rents by $1000s.
PE firms used straw landlord Toledano to do this.

Signature met with tenant activists, agreed to change its ways.
NY state & city closed loopholes.
Multifamily values crashed, banks were left with billions in inflated mortgages.
The average Signature mortgage is 161% of underlying property's value.
Enter: CRYPTO:

A guy I call "Ben" thinks he maybe inadvertently introduced Signature to crypto when he helped open account there for his old company Block Chain Terminal, which (like every crypto startup?) turned out to be a ponzi scheme. https://prospect.org/economy/2023-03-23-rich-bank-dumb-bank-signature/

In any case Signature went all in. It built a "private blockchain" so crypto exchanges and stablecoin issuers could exchange funds with one another 24/7.
A dossier compiled by famous short seller @AlderLaneEggs amusingly highlights the insanity of taking on such clients.

One Signature client was Genesis Block, an FTX subsidiary that ran Bitcoin ATMs. People in Hong Kong lined up around the GB office with "bags of cash" to trade for crypto.
The JP Morgan of his generation, folkshttps://www.ft.com/content/68dbe10a-fa38-443a-9790-dc96f2d8979a

Signature did one TRILLION dollars in 2022 volume on the private crypto blockchain CEO DePaolo called a "walled garden." Crypto skeptics have called it a "Walled Garden Full of Snakes." https://dirtybubblemedia.substack.com/p/a-walled-garden-full-of-snakes-the

And @AlderLaneEggs has likened Signature to Wirecard, a massive German "fintech" fraud suspected of being a front for drug cartels & Russian intelligence. Its fugitive Austrian founder's grandfather was also suspected (by Nazis) of spying for Russia. https://www.ft.com/content/ebbc0fab-9969-493a-815c-782085ca1651https://www.ft.com/content/ebbc0fab-9969-493a-815c-782085ca1651

Speaking of Russians & Germans, Signature also opened an account for famous Russo-German non-fugitive Anna Delvey Sorokin, of "Inventing Anna" fame. Her bankers were called to testify at her grand larceny trial.

Delvey opened up an account at Signature in 2017, explaining that she intended to open a Soho House-inspired club in a $135 million Bryant Park building. Instead she deposited $15K in bad checks & withdrew $8K.

But at her trial, Delvey Sorokin's Signature reps admitted they made up a story for internal bank purposes about how actually she was going to convert the building into a hotel, for reasons that remain a mystery.
(Thanks @jpressler for the status!)

Later when Delvey sold her story and tried to pay back Signature the 8 grand, they literally wouldn't take her money, they were too embarrassed.

Ofc, Delvey bounced far bigger checks with other banks, withdrawing $89,000 from perpetual TBTF Zombie Citigroup
Far richer & more powerful institutions also backed FTX, Tether, Bittrex, Voyager & 100 other crypto ponzis https://prospect.org/economy/2023-03-23-rich-bank-dumb-bank-signature/

It's possible Signature is a lowkey Deep State nerve center of global money crime, a Riggs/BCCI of our time.
Or maybe they learned from the best that snitching to Feds is not a sustainable biz model https://jamestown.org/program/newspaper-scandal-over-imf-diversion-expands/

As @AlderLaneEggs told me, you have to choose your battles. For example, he explains, "You can't short Tesla because Elon Musk is a protected person." But you CAN make $ shorting midsized banks w. long lists of dubious clients who've suddenly all at once been outed as frauds

...IF, that is, the clique of billionaires who engineered those frauds in the 1st place orchestrates a run on the banks that processed their payments?
Actually, one short told me, no one anticipated the run.
"Peter Thiel, all of them, need to be subpoenaed for that."

A girl can dream.
In the meantime, in lieu of a Peter Thiel indictment, please feast on this elegy for Signature Bank, faithful Blockchain of Crooks & Criminals & Fake German Heiresses, 2001-2023.
   https://prospect.org/economy/2023-03-23-rich-bank-dumb-bank-signature/

It's my first piece as the official "Investigations Editor" of @TheProspect whose tireless leader David Dayen recently had his Twitter account hacked in apparent retaliation for some gentle trolling of David Sacks. Follow @david_dayen in the interim for more wild stories


The "Execution" of Signature Bank

A lowkey riveting hearing went down in Minnesota yesterday on a $14 billion hospital merger. I'm highlighting because:
-It's a central casting hospital merger from hell
-Everyone personally affected clearly HATES the deal
-It will probably go through anyway?
-Welcome to Hellcare

the deal joins dominant Twin Cities system M Health Fairview & rural South Dakota chain Sanford Health.
The chains have no real "synergies" but have been trying to merge for AGES. The 1st time they tried in 2013, the AG grilled Sanford so hard they walked away.

Since 2013
-both chains have >doubled in size
-Sanford paid $20m to settle an unnecessary spine surgery case
-Causing an Iowa hospital system to back out of merging w Sanford
-its CEO "resigned" after refusing to wear a mask in 2020
-then got a $50 MILLION golden parachute

MEANWHILE Sanford himself, a subprime credit card billionaire known for 80% APRs, has been under investigation for the possession of CHILD PORNOGRAPHY for years.
Last spring the probe was shut down after Sanford claimed his email had been hacked.
ProPublica remains on the case

Fairview is a similarly loathesome system kept somewhat in check by incrementally more robust regulation/governance. Since swallowing a major competitor in 2017 it has shut down multiple hospitals & mutliple maternity wards. Fairview nurses who spoke audibly despise their bosses

One of Fairview's enduring qualities: a zest for shaking down patients. In 2005 the AG censured F for illegally garnishing patients' Social Security checks.
So Fairview outsourced collections to private equity-owned Accretive Health, since renamed R1 RCM https://storage.courtlistener.com/recap/gov.uscourts.mnd.124205/gov.uscourts.mnd.124205.82.0.pdf

Accretive called its strategy "Accretive Secet Sauce."
"You've never seen ASS like ours!" the company bragged in internal documents
Agents of ASS camped out in ERs and, posing as nurses, stormed into the rooms of sick patients demanding $ as a perceived condition for getting care

Then AG Lori Swanson sued & banned from the state Accretive in 2012 & was likely in no mood to approve a buyout that wd enrich the hospital bosses who'd hired them. She chased Sanford away.

For whatever reason, current @AGEllison seems reluctant to do the same.

One reservation may be related to the fact that antitrust has been historically unhelpful in combating the scourge of health care consolidation.
Sanford & Fairview don't have many overlapping assets, so what could be "anticompetitive" about it? WELL... https://www.fiercehealthcare.com/providers/cross-market-hospital-consolidation-rise-and-understudied-researchers-say

A better question to ask about mergers is, if it's *not* going to have anticompetitive consequences, why the F are the big bosses pushing for it so hard?
Yesterday the Fairview CEO all but said "Look folks we need to raise prices" https://www.kare11.com/video/news/health/ceos-of-fairview-sanford-discuss-potential-merger-at-public-hearing/89-74269a7d-5ea6-48d6-b120-6bfc5ef82248

(Cross-market mergers enable hospital CEOs to jack up prices for the same reason the merger of a psoriasis drugmaker & a cancer biotech does: *patients* aren't the ones haggling over prices, giant (corrupt) insurers are. Sadly antitrust has only recently started grasping this.)

Luckily @mnnurses & the @MNFarmersUnion & @SEIUmn & the dean of the @UMNMedschool & state rep @zackstephenson all seem committed to opposing the merger & other Fairview scams to undermine MN health care standards & sell out to sicko hospital monopolists.

Even if they succeed at winning Ellison over, MN clinicians & patients are stuck with Fairview's scummy leadership.
And the 100 hospital merger bids like this one happening at any given time, all designed to maximize health care costs & clinician burnout https://revcycleintelligence.com/news/healthcare-mergers-and-acquisitions-linked-to-physician-burnout


ON the Fairview Sanford Hospital Merger From Hell

Good afternoon music fans! In honor of all the chumps over 40 camping out in online Hell to score concert tickets today, a thread on all the times your (least?) favorite musician crossed paths with the omnipotent empire known as Ticketmaster/Live Nation.

What the "Ticket Masters" understood from the start was the power of installing themselves as gatekeepers btwn rock stars & fans.

(This story *probably* starts with the CIA money launderer who bilked Creedence Clearwater Revival in the 70s and bought Ticketmaster in 1981, but..)

For now let's start with the @gratefuldead, whom Ticketmaster threatened to boycott from captive venues in 1991 if the band didn't allow TM to sell ALL their tix.
Historically the Dead had reserved 50% of tickets to sell by mail to fanclub members.

The band threatened to unleash mobs of angry Deadheads upon Hyatt hotels.
Ticketmaster czar Fred Rosen backed down and let the Dead have their 50%. This became known as the Grateful Dead Exception. And it would NEVER, he swore to himself, happen again.

In the early 90s Aerosmith's Steve Tyler became dismayed by reports that kids were camping out to buy tickets & leaving empty-handed. He had staff interview all the people sitting in the front section of a concert & learned that every single one had bought tix from a scalper

While touring Italy @iamstevent likened Ticketmaster's control of concerts to Mussolini's railroads.
The band tried to broker a Grateful Dead Deal.
Instead, Ticketmaster offered to pay them an extra dollar per ticket, Aerosmith's manager testified before Congress.

Then came L'Affaire @PearlJam which started when Ticketmaster refused to give the band a break on service charges when it played free shows & charity fundraisers.
Then the band tried to get a Grateful Dead deal to keep tour tickets below $20, and Ticketmaster declared war.

I & @KristaKBrown explored Ticketmaster's war on Pearl Jam in the upcoming issue of the American Prospect. It's a wild tale replete with mysterious break-ins, Giuliani-connected double agents, Roger Stone and classic Clinton treachery.  https://prospect.org/power/ticketmasters-dark-history/

One of Ticketmaster's shrewdest moves in its war on Pearl Jam was enlisting @GreenDay who essentially advised Vedder to take a "pay cut" & even @IanMacKaye who said he didn't think TM's Fred Rosen was a "bad guy" but the product of a "bad system"

Courtney Love however was not fooled. She repeatedly defended Eddie Vedder. Of course she fucking did.

Ticketmaster's victory over Pearl Jam & the Telecom Act of 96 unleashed a tsunami of music consolidation. By 2000 TM was essentially an offshoot of an empire that controlled 1000s of radio stations & billboards, 100s of venues & even 100s of musician FAN CLUBS (thanks to his guy)

that's right, Dave Matthews sold out big time to Clear Channel, selling a stake in its MusicToday fan club management business in 2000 and later selling the whole thing.

At this point Clear Channel & Ticketmaster were still ostensibly separate companies..https://hitsdailydouble.com/news&id=273346&title=SFX-GETS-INTO-THE-MERCHANDISE-GAME

BUT, once the Evil Empire swallowed the DMB's fanclub company, a little band called the String Cheese Incident @SCI_Official that had been selling concert tix directly to fans found itself frozen out by Ticketmaster's exclusive relationship with MusicToday.
So String Cheese sued

Ticketmaster ultimately offered SCI a Grateful Dead deal
(Rosen was gone at this point, having launched a consultancy w/ future Ticketmaster CEO Irving Azoff)
But SCI was not allowed to tell anyone abt its deal.
The band regretted settling, but by then it was 2003.

In 2003 Clear Channel was 1 of the most powerful companies in America, the Dixie Chicks were 1 of the most popular bands & George Bush invaded Iraq for reasons that are still unknown but basically boil down to Epic Deep State Cash Grab.
The Chicks did not agree with the invasion

Clear Channel went into overdrive to punish the band, organizing pro-war rallies across the country where fans destroyed the band's CDs, removing their songs from hundreds of playlists, and boycotting the band from dozens of markets.

The saga inspired a song called "Monopoly" from Chicks songwriter & longtime family friend Terri Hendricks, wherein she rhymes "all-time low" w/ "all about control"
The vibe is "Howard Dean biodynamic vineyard fundraiser" & I mean that in the BEST way https://www.youtube.com/watch?v=ynf2ou8fORY

Taylor Swift, who shares the Chicks' concert promoter Lou Messina -- who had sold out to/left/sued Clear Channel in 1999-2000 -- said the band's blacklisting had "terrified" her as a young fan.

But Clear Channel did not sabotage artists solely for political reasons. When Britney chose (Messina backer) AEG to promote a tour in hopes of boosting her (sigh) film career, CC removed her songs from playlists, inviting a DOJ "investigation" that SOMEHOW never amounted to much.

Clear Channel continued to terrorize Britney though, airing a hoax account of her "death" in grisly a car crash & later taking out billboards with photos of her manic head-shaving episode to advertise its "crazy" morning shows...

In 2005 Clear Channel renamed its concert biz "Live Nation" & spun it off in apparent response to litigation.
Live Nation's chairman was Michael Cohl, who got rich & famous giving MASSIVE upfront payments 2 rock stars, then collecting phony 10% "taxes" on each concert ticket

As CD sales cratered, Cohl started doling out 9-figure "360" contracts to @madonna, @ladygaga, @sc etc.
Wall Street thought Cohl spent too much $ on Madonna & Cohl's protege iced him out of the company. But Cohl knew they'd figure out a way to make back the cash

the spending spree decimated what remained of the indie music business. Live Nation & its sole legit competitor spent >100% of ticket sales on proven acts, destroying regional promoters & and sending ticket prices soaring. When @ladygaga signed on with LN, her tix soared 133%

Meanwhile, Ticketmaster was doubling down on new forms of gouging. It bought off regional ticket brokers, teamed w/ @vanhalen to sell off their best tix to scalpers & split the profits, & rigged systems to direct fans to scalped tickets even if primary tix were still available


What could possibly make this system worse? Only one thing, according to The Boss: the merger of these two symbiotic concert vampires

The merger of Ticketmaster & Live Nation seemed unthinkably wrong to everyone in the music business. But once it happened, what was anyone supposed to do? As @nineinchnails Trent Reznor put it:

The thing about monopolies, however, is that once you've eliminated the need for them to compete for anything at all, you've pretty much ruled out the possibility that anything will get better. They will only get worse, and with no recourse.

Which brings us to the Astroworld tragedy, a mass death that before it was memory-holed by a dozen newer mass deaths was widely blamed on... a shithead rapper.

But the real manslaugter ofc was committed by the omnipotent music monopoly, as @MrChuckD pointed out

A Brief History of the Last Reigning Music Monopoly, from CCR to Travis Scott and Taylor Swift

Still wrapping my mind around the news that supermarket behemoths Albertsons & Kroger are planning to merge. If this deal goes through we should all just go Amish.

A thread about how private equity made:
-food deserts
-food hyperinflation
-$$$$

Some context: as we know from yesterday's CPI # the gap between the 13% inflation inflicted by grocery stores vs 8.5% imposed by restaurants is a staggering 4.5 points.

That is 100% because restuarants are a competitive business, and supermarkets are a depraved racket

Kroger fwiw
-has done $4 billion stock buybacks since Covid started
-closed 5 CA supermarkets solely to get out of paying $4-5 an hour "hero pay" bonus
-just narrowly avoided a strike in OH by conceding to raise cashier wages $1
-is somehow substantially LESS evil than Albertsons

Albertsons
-is a heaping pile of junk debt
-controlled by a cabal of private equity firms
-chiefly Cerberus, a fund named after a mythological three-headed dog that guards the gates of Hades
-that is also chaired by... Dan Quayle

Cerberus & Co
-sold Albertsons buildings to pay themselves dividends & now the stores owe $10 billion in rent
-tried to IPO but no one wanted the rotten stock
-until Covid; yay IPO!
-But $800m wasn't enough so they sold $1.75B "hybrid" stock to Apollo
-which now needs to get PAID

If you shop at Albertsons, Safeway or any of the other brands owned by this psycho grocer, you know what it means to be in ("hybrid") debt to Apollo.
The food CPI may have risen 13% YTD; at Safeway that number is more like 76%
Here are the literal receipts https://www.retailwatchers.com/viewtopic.php?t=3382&hilit=old+receipt+inflation

But how can they  story actually starts in 2006, when Albertsons went on sale.  PE HellDogs bought 655 stores; Supervalu bought 1100

7 yrs later, Cerberus had QUINTUPLED their $ while Supervalu was begging for mercy. The difference?

Cerberus CLOSED 70% of the stores

The PE crew, led by Cerberus, would continue their "buy to close" strategy, acquiring Supervalu, Safeway & more than 3100 supermarkets in total over the next few years...

And closing nearly 1000 of them.

It gets scummier. A year after PE guys bought 877 more Albertsons stores for $100m cash ($114K per store!) they announced they were acquiring Safeway for $1.2 billion cash & $7.8 billion in debt.
Albertsons now had 2500 stores
To appease the FTC, it agreed to divest 168

Anticipating the FTC action, Cerberus had already sold 146 stores to the regional chain Haggen for $300m.
Haggen then immediately sold the stores' real estate for..$300m.
Haggen owned 18 stores before this transaction.
Naturally, Haggen was also owned by a private equity firm.

The deal collapsed within weeks.
Haggen sued Albertsons claiming the bigger PE monster  deliberately sabotaged their acquisition of the unwanted stores
But financing the transaction with 200% debt & leaving "execution" to a chain 1/10 the size was...also sabotage!

So anyway you'll be shocked to learn that.. the private equity HellDogs ended up buying back, dirt cheap in bankruptcy court, half the stores they'd just sacrificed for "competition"!
While the other half mostly just... closed!
A real Three Headed W for private equity!

This is behavior you see a lot with hospital mergers.
Two scummy chains merge & the FTC "forces" them to "carve out" geographically overlapping assets and sell them off to "remedy" the blow to competition.
Scumbags pretend to be sad.

But IRL scumbags have a lot of power, esp if they divest assets to a thinly capitalized PE extraction vehicle, to sabotage their viability, leaving scumbags with EVEN LESS competition than they would have had w/o regulators

In 2020 the Trump DOJ advised antitrust regulators that

This is oc the tip of the iceberg of Cerberus's supermarket scumbaggery (to say nothing of Cerberus's hospital scumbaggery, or Apollo's non-Albertsons supermarket scumbaggery, etc)
They're also pension vampires, union busters & fee pigs. A great report:
https://pestakeholder.org/wp-content/uploads/2019/11/Private-Equitys-Biggest-Retail-Gamble-Albertsons-Safeway-UFCW-400-PESP-110619.pdf

What's mindblowing is how confident these guys seem that even with the most serious FTC in 50 yrs, regulators will ultimately prove to have learned nothing from their history of plunder, price-gouging and community-erosion
Here, look how they're addressing the "competition" thing

A Brief History Of $16 Ice Cream

Maybe you've heard Sysco @Teamsters are on strike in 3 cities. But unless you work in a commercial kitchen, you probably don't know what Sysco even is, or why so many chefs & small restaurants are *rooting* for the strikers.

Goldman Sachs-spawned Sysco & PE-backed US Foods are tyrants of the restaurant supply cartel. Their service is often shockingly bad.
But they're Kings of M&A. Sysco's acquired more than 150 rivals. Chefs have nightmares about USF swallowing their purveyors https://www.economicliberties.us/press-release/ftc-doj-must-step-in-to-stop-dominant-middlemen-ripping-off-independent-restaurants/

During the pandemic Sysco's brand new CEO laid off a third of its workforce. Probably he got the idea from the railroads, which had just laid off a third of their workers without even a pandemic to blame. What could go wrong, right? https://www.bizjournals.com/houston/news/2020/05/05/sysco-reveals-size-of-workforce-cuts-due-to-covid.html

No prizes for guessing how Sysco spent the cash it saved axing workers. They went shopping! For small companies & Sysco stock. Also, dividends. Management just boasted to an investor conference that it expects to have "returned" $15 BILLION to shareholders by the end of the year.

Meanwhile in the kitchen trenches, TOTAL CHAOS reigned. Last year restaurants were regularly getting orders 2-3 DAYS late if at all. Whole counties were unilaterally wiped off delivery routes. Because Sysco liked how its "lean" labor force looked on a spreadsheet.

Sysco's failure to deliver even forced a New England summer camp to shut 7 weeks early in a scandal likened to the Fyre Festival.
(more like the inevitable result of 100s of kids who'd never known deprivation in any form experiencing hunger for first time) https://www.thedailybeast.com/fyre-fest-of-summer-camps-shut-down-after-parents-spend-thousands

Now, perhaps you wonder, "How do these companies manage to perpetually hike dividends if they're failing their customers in such spectacular fashion?"
That's the magic of INFLATION my friends. Just triple the price of animal proteins, paper products & rubber gloves & we're good!

anyway Sysco & US Foods, like railroads & airlines, are case studies of how monopolies abuse workers & small business almost identically, and that abuse is symbiotic.

That's why @Teamsters opposed the two companies' diabolical plan to merge in 2015 https://www.restaurantbusinessonline.com/teamsters-pushes-against-sysco-us-foods-deal

And it's why small business groups like @indprestaurants co-signed our letter demanding an antitrust investigation, even though individually many small restaurants "live in fear" of Sysco https://subscriber.politicopro.com/article/2022/10/anti-monopoly-industry-groups-blame-foodservice-distributors-for-pandemic-profiteering-00060572

And no one wants Sysco drivers & THEIR WAREHOUSE BROTHERS to get dignified wages, sustainable schedules & regular pay rises (bc experience REALLY matters when delivering 2 our rinkydink backalley loading docks) more than chefs & indie restaurateurs.
Bc the status quo is NOT GOOD

Sysco Sucks, The Thread

An old story of mine about how student loans are unconstitutional has gone missing from the Reuters website. The story is almost twice as relevant as it was 10 years ago, when Americans' collective student loan debt was not quite yet a trillion dollars.

The single most important thing about student loans is that you can't discharge them in bankruptcy
This makes them more predatory & toxic than any other kind of debt, which is saying a lot
It also violates students constitutional rights, bankruptcy prof Phil Shuchman said in 1975

See, in 1975 personal bankruptcies were rising & lobbyists were doing what lobbyists do: promulgating a 100% fictitious explanation to deflect their own culpability & corresponding "solution" that would inflict unthinkable harm on millions
https://www.nakedcapitalism.com/2012/08/moe-tkacik-student-debt-the-unconstitutional-40-year-war-on-students.html

The "solution" involved limiting rights of college "deadbeats" to discharge student debt in court, an idea Shuchman testified would have zero impact & gave him “the further very literal feeling that this is almost a denial of their right to equal protection of the laws.” 

What no one predicted was the tidal wave of economic hate crime this non-dischargeability would unleash.
Stripped of the possibility of bankruptcy, student loans accrued interest & fees & grew by orders of magnitude. 
Watch a $26K loan literally turn into a $226K+ loan

This is why nothing makes me more batshit than proposals to cancel student debt "up to $50K." Could any idea be less grounded in the reality of a problem? (Well, punishing students for deindustrialization)
Whatever % of student debtors have <50K is:
-the least fucked %
-SHRINKING

Notably, the guy who pointed out the unconstitutionality of student debt was no ideologue; he's actually best known for a hit piece he wrote on Elizabeth Warren. 
Indeed, the cause of restoring students' bankruptcy rights has many weird supporters: https://www.washingtonpost.com/politics/elizabeth-warren-reshaped-our-view-of-the-middle-class-but-some-see-an-angle/2019/05/06/9c434a2e-18e5-11e9-8813-cb9dec761e73_story.html

Josh Hawley for example co-sponsored a bill with Dick Durbin that would allow student loans to be discharged in bankruptcy. https://www.insidehighered.com/news/2021/08/04/lawmakers-look-allow-loan-discharge-under-bankruptcy

This former Trump DOE official now running for Congress in a Dem district went on Tucker in 2019 to say student loans were causing suicides &  "an ever-increasing destruction of the fabric of America" https://www.youtube.com/watch?v=GrtV8VyrWVU 

Weirdest of all may be Laurie Selber Silverstein, whose ruling in the bankruptcy of a private equity piss test Medicaid fraud mill -- that is, sorry to report, a whole sector of the Florida economy -- kind of a blank check to the Sackler family & ilk https://prospect.org/justice/how-do-you-solve-a-problem-like-the-sacklers-purdue-pharma-bankruptcy/

Well what do you know, Judge Silverstein's empathy is not reserved for private equity firms and yacht collectors.
Here she is in the bankruptcy case of an epileptic Uber driver with $110K in college debt, saying maybe students deserve the occasional break too. 


Sadly, as this awesome @levernews investigation explores, the Biden Administration has spent heavily to fight student debtors like the epileptic who totaled his car driving Uber to make his loan payments. https://www.levernews.com/biden-moves-to-block-student-debt-victory/

Biden ultimately dropped its appeal in the epileptic uber driver's  case, but the WH's broader pattern of clamping down on the tiny sliver of student borrowers so hopeless and destitute their lawyers advise them to plead "undue hardship" is telling: 
https://www.washingtonpost.com/education/2021/07/17/education-department-bankruptcy-policy/

A lot of Democrats still live in a fake reality originally concocted by bank lobbyists and refined over the years by generations of polarization optimizing software. 

Republicans live there too, though their neighborhoods were conceived by oil lobbyists 


But more & more Americans live squarely in a reality that could be vastly improved if politicians would only take extremely moderate, pragmatic & incremental steps to restore an element of "rule of law" to this chremastic inferno we got here

That might sound boring to my fellow travelers but look what the bank lobbyists are saying about the CFPB chairman's deeply tame, non-radical campaign to rein in fake charges like "resort fees" that 10 in 5 Americans despise.  
https://www.americanbanker.com/opinion/the-cfpb-a-regulator-gone-rogue

Anyway, I do not know which student loan shark lobbyists to blame for its disappearance from Reuters, but my story is still on the internet, albeit on a site I forget to visit as often as I should because Google systematically suppresses its existence https://www.nakedcapitalism.com/2012/08/moe-tkacik-student-debt-the-unconstitutional-40-year-war-on-students.html

Restaurants are the odd business no one ever figured out how to outsource to China or India or code & thus never attracted the full conquest of the corporate rape culture elites who feasted in them. 

When plague hit, elites shrugged, "Euthanize 'em" https://medium.com/@erinkimberlywade/public-meaning-why-congress-needs-to-replenish-the-restaurant-revitalization-fund-2a46e97e6df7

Elites said the same thing about deindustrialization in the 80s, that it was a "mercy killing." 

Actually it was a deranged scheme to subsidize the factories of literally every non USSR country for the sole purpose of adding zeroes to the offshore bank balances of oligarchs.


I worked in DC restaurants for 7 yrs. The ruling class always seemed to like us! (My fanciest restaurant was co-owned by a lobbyist who'd run gov affairs at CITIGROUP when it got the BIGGE$T BAILOUT OF ALL TIME) 

Bailing out restaurants, tho...HARD Pass https://twitter.com/moetkacik/status/1492115422522527744

Save for the money, food & coworkers, I hated everything about restaurant work. https://slate.com/news-and-politics/2021/02/trump-administration-tippers-fine-dining-dc.html I would never be so insufferably defensive about them if I could name ONE other US industry that didn't boil down to "Ponzi scheme/extortion racket + upscale marketing"

And GOD it annoys me when people say "going back to doing things IRL" is a nefarious real estate developer plot. 

As if real estate developers would somehow allow themselves to be the ONE class of oligarch who didn't get 4-8 times richer during the pandemic. 


Anyway I wish there were more essays in the "Small Business Owner Looks at Late Capitalism" genre bc this one is fucking brilliant. https://medium.com/@erinkimberlywade/public-meaning-why-congress-needs-to-replenish-the-restaurant-revitalization-fund-2a46e97e6df7

Full disclosure Erin Wade is not just a brilliant critic, she is also a farmer & friend & ally of the @economicliberties struggle to unite small business on Gratuitous Big Tech Disruption. https://www.newyorker.com/culture/q-and-a/the-fight-to-rein-in-delivery-apps

And here's a story about how Barcelona is trying to ban "ghost kitchens" and we should too https://www.themayor.eu/en/a/view/barcelona-aims-to-ban-ghost-kitchens-and-dark-markets-10118

3 days ago this man performed a 🔥 guitar solo at a deserted strip mall to draw attention to the atrocities committed by an outfit called Western Dental. He got FOUR MILLION views, because even the algorithm believes private equity in health care is bad. https://twitter.com/ferngalvn/status/1502747249956122624

Western Dental is owned by New Mountain Capital, a "socially responsible" PE firm with $30 billion under mgt founded by a former protege of the late Teddy Forstmann, renowned as the "nicest" & most "ethical" Milken-era corporate raider. A low bar, then & now 

Here's how the Western Dental business model works

-reel in lower income parents at daycare/preschool w/ the promise of free care
-tell them kids' teeth are fucked
-fill their little mouths w crowns
-bill Medicaid

A perfect crime, bc the evidence falls out with the baby teeth

Whistleblower suits against another New Mountain pediatric dental chain, Benevis dba Kool Smiles aka Kids Smiles/Pine Dentistry, are filled with stories of kids who needed cleaning but instead got 4-10 baby root canals & stainless steel crowns. 

Have you ever tried to so much as *brush* a toddler's teeth? It takes forever & feels like war crime. 

But KoolSmiles capped cleanings at 15 mins so they'd have time to meet the minimum quota of 14 SURGERIES PER DENTIST PER DAY. 

Their secret weapon: the "papoose board"

Papoose boards terrified kids, who'd piss themselves so often Kool Smiles hygenists all had hairdryers for drying their clothes. Undercover TV news probes ensued. 

So Kool Smiles changed its protocol & got into the anesthesia business. What could go wrong, etc. 

In 2017, Kool Smiles was simultaneously negotiating both a $300 million sale to New Mountain AND a $24 million DOJ settlement of 5 whistleblower suits when 2-year-old Zion Gastelum walked through the door of one of its Arizona clinics. 

Dentists told Zion's mom he needed 3 root canals & crowns for decay caused by...breast milk. But last minute they did 6 root canals 6 crowns & 3 enamelplasties, for which they administered 6 forms of anesthesia, including PROPOPHOL

Clinic was shortstaffed; oxygen malfunctioned..

And everyone was too distracted to notice the baby's heart had stopped. 
They were not, however, too preoccupied to bill Medicaid for all the work they had done on the dead toddler's teeth.

Kool Smiles was, incidentally, founded by veterans of the Colorado dental clinic chain Small Smiles, a similar Medicaid kiddie crown assembly line cofounded by a guy whose day job literally consisted of teaching public school systems how to extract more $$ from COKE MACHINE SALES

But it was Western Dental, founded in 1903, that pretty much invented the Kool/Small/KidSmiles business model. Interestingly, by the 1970s Western Dental was calling itself an "HMO."

The history of US healthcare reform is in many ways a story of bad docs performing unnecessary treatments on clueless patients to bilk insurers
HMOs were invented to liberate us frm the ethical minefield by paying docs flat salaries to promote the best outcomes the budget wld buy

The medical establishment hated HMOs & did everything they could to convince us they were a Soviet plot. 

And with the exception of Kaiser, HMOs languished until the late 1970s. By which point they had been pretty fully converted into a capitalist plot. 

The HMO "revolution" of the 1980s/90s basically begat a virulent new strain of corporate medical middlemen that grasped better than anyone how to recruit/control doctors & game reimbursement systems
Private equity loves a middleman, & started buying in  https://www.acutecondition.com/p/1990s-continued-physician-roll-ups?s=r

Now there are whole realms of health care like pediatric dentistry, emergency medicine & anesthesiology that have been completely annexed by the legalized embezzlement industry. https://prospect.org/health/envision-healthcare-hits-the-skids/