Never buy cars from Carvana

As if anyone needed another reason to not use Carvana to buy a car, Jalopnik brings news of the shady ways that the online car retailer is handling layoffs, in an article titled “Carvana Lays Off Thousands of Workers, Buys Car Auction Company for $2.2 Billion on the Same Day”

Carvana, the used car dealer founded a decade ago whose meteoric growth was met with a fair number of problems, said Tuesday that it would lay off 2,500 employees, with executives going unpaid for the rest of 2022.

In a filing with the Securities and Exchange Commission, Carvana called the move a “right-sizing” initiative.

Separately on Tuesday, a Redditor posted what they said was an email sent to Carvana’s employees, which says that various industry stresses — supply chain problems, higher interest rates and inflation, and slower car sales because of “all-time high car prices” — meant that Carvana’s growth was slower than expected. The email, which we have not verified but seems legitimate, also says the layoffs add up to roughly 12 percent of Carvana’s employees, and offered the same information about severance for the affected employees contained in the SEC filing.

Layoffs were probably an inevitability given that Carvana reported its first-ever sales decline in April of this year—a year when used-car prices and demand are still at unprecedented highs. It’s worth noting that, simultaneous with the revelation of these mass layoffs and executive pay cuts, Carvana announced this morning it will pay $2.2 billion to acquire vehicle wholesaler Adesa U.S., which operates 56 auction locations across the country.

I tried using Carvana once when I was in the market for a used car. The whole process had the faint whiff of something being not quite right, so I walked away from Carvana and never considered it again.

One of Wall Street’s most enduring ways to keep malfeasance secret might be crumbling in NY

Back when I worked for a big box home improvement retailer, I used to see certain shitty products come onto the sales floors and think, “Which buyer approved this sub-standard product and why?”

The answer in some cases is kickbacks. Company A asks a buyer to make sure all her/his stores carry crappy-but-lucrative Product B. In exchange, the buyer receives a kickback in money or products or sometimes just fancy dinners.

Of course, this is a private retailer and nobody is hurt but customers who get crappy Product B and the retailer who has unhappy customers because of it.

But imagine if you were a Wall Street investment firm and, instead of a few hundred-thousand crappy widgets at Home Depot, you’re talking billions of dollars in government employee pension funds?

Not only is there incentive to kickback money to pension fund managers for choosing a certain investment firm, but the investment firms themselves stand to make millions of dollars in fees that they never have to report in full. Nobody is certain how many pension funds are being robbed because the reporting rules are either opaque or non-existent.

Excellent news site The Lever has an interesting story titled “Wall Street’s Biggest Secret Could Be Exposed” which details how some Democratic (note: not Republican) NY legislators are trying to bring some transparency to a world of huge money and shady investment practices:

Wall Street’s most closely guarded and lucrative secrets may finally become public, if New York Democratic lawmakers pass a new bill requiring financial firms to show what they are doing with hundreds of billions of dollars of Americans’ retirement savings.

The groundbreaking legislation sponsored by New York Assemblyman Ron Kim would require state officials to disclose the contracts governing how private equity firms, real estate companies, and hedge funds manage money from New York’s pension system.

In the two decades since public pension systems began funneling workers’ money into those high-risk, high-fee investments, states and cities have concealed the contracts governing the investments of the retirement savings of millions of teachers, firefighters, first responders, and other government workers. If the New York legislature’s Democratic supermajority passes Kim’s bill, for the first time it would open up those contracts to public scrutiny.

“Portfolio managers charge our state exorbitant management fees while underperforming the market,” Kim said about his bill. “To add insult to injury, these investments are accelerating the climate crisis and destroying the American healthcare system. The pension holders have a right to see what their hard-earned money is being invested in, and legislators have a right to review whether these funds are pushing us further into climate catastrophe and destroying public goods.”

Now, I don’t live in New York so you might ask why do I care? Because New York’s financial footprint is so outsized when it comes to pension funds that any rules New York forces investment firms to adopt could affect rules in other states. New York’s could also be used as model legislation for other states.

(Note that the video below is not related to the NY legislation. I included the video merely as a primer on the problems facing the pension system.)

Real estate is awash in Russian mob money. One congressman wants to do something about it. Just not here.

Ill-gotten Russian money is being washed through American real estate. Everyone knows it’s being done through New York real estate. It being done in plain sight of South Dakota’s conservative Gov. Kristi Noem. Delaware has been a shady money haven for so long that few really pay attention any longer.

One US congressman has had enough. But he is choosing to go after targets in Great Britain rather than in his own country. In an article in The New Republic titled “Representative Steve Cohen Wants to Build a New Weapon to Fight Kleptocrats,” we learn about how “British lawyers have long helped corrupt oligarchs protect their ill-gotten loot. The Tennessee Democrat wants to hold these enablers to account.”

Over the past few months, a new range of sanctions have begun rippling across the West, targeting a motley crew of Russian oligarchs, all of whom have profited from their relationship with the Kremlin and pushed Moscow’s interests abroad. But last week, in a little-noticed salvo out of Washington, a new class of scofflaws are suddenly feeling the heat of potential sanctions: the British lawyers who’ve spent years acting as handmaidens to pro-Kremlin billionaires.

In a letter to Secretary of State Antony Blinken, Representative Steve Cohen called for the United States finally to “hold to account those enablers” behind the “unscrupulous work” benefiting oligarchs. Specifically, the Tennessee Democrat singled out the British barristers who’ve spent years helping Russian oligarchs smother the journalists poking into their illicit wealth—and helping turn the United Kingdom into the go-to jurisdiction in which to file frivolous lawsuits against anyone looking into their financing.

Ah, well, I suppose it’s a start that any politician from Tennessee wants to go after rapacious capitalists of any kind.

It’s an interesting story.

Billionaires funding research on living forever

There’s an article in the Washington Post about “the long quest for immortality,” a interesting look at the history of the previously quixotic — and often gruesome — search for a way to not die.

WaPo wasted no time getting to what is, for me, the chilling heart of the matter in the second paragraph:

Immortality might seem like the stuff of science fiction, yet it’s increasingly becoming the focus of real science. In 2013, Google launched Calico, a biotech firm whose objective is to “solve” death. PayPal co-founder Peter Thiel, meanwhile, has pledged to “fight” death. And last year, it was reported Amazon chairman Jeff Bezos had invested in Altos Labs, a company that plans to “rejuvenate” cells in order to “reverse disease.”

I’m not at all afraid of dying. I’m scared of the pain that might (or might not) accompany my own death. But if I could guarantee that I would not suffer during the process, I wouldn’t even mind knowing the exact date of my demise.

I might feel differently if I were a billionaire with an inflated sense of my own worth.

What a disaster it would be for all of us if Peter Thiel, as much a textbook example of an amoral billionaire as currently exists, were to live forever. I hope these efforts fail, at least until Thiel shuffles off this mortal coil.