Ranked the 377th richest American last year, with a net worth of $1.3 billion, Thiel has dropped off this year's Forbes 400 list entirely. In the middle of last year, he could brag that his Clarium Capital had averaged an annual return of 30 percent, net of fees, over six years; these days Thiel is quoted in the Wall Street Journal blaming the irrational economy (when is not?) for his fund's outflows and double-digit declines. These things tend to come in threes, so we're waiting for the next shoe to drop.

Then Thiel can speedily move on to the inevitable next phase: Redemption and comeback. At 41, he's got many more acts still to come.

(Pic: Andrew Mager)

The S&P 500 is up to 1,060 from a February low of 666. But Thiel's fund keeps getting battered. Clarium Capital is down 16 percent through mid-September, by the Wall Street Journal's calculation, and Thiel admits to the paper he's not eager to join the stock rally: "The recovery is not real... deep structural problems haven't been solved" said the entrepreneur, who in similar comments recently branded as "fraud" major tech research, as well as the dot-com boom in which he started his fortune-making company.

If Thiel's concerned with underlying fundamentals, it's odd he's placed himself in the corner of financial services most obsessed with market sentiment, expectations and gyrations: hedge funds, the sector given a face by Mad Money host and former hedgie James Cramer. If Thiel doesn't want to chase fake bubbles like a clown, perhaps it's time to leave the circus.

(Thiel pic via David Orban)

Clarium Capital lost 4.4 percent in June, taking it to a 6 percent loss for the year, a source with knowledge of the fund tells us. The New York Post heard the same numbers. Fund assets, our source adds, are at $1.5 billion.

As the chart above shows, that's quite a fall. Clarium had $7.8 billion at the end of June 2008, the Post reports, a figure in line with other media reports at the time. It was only a few months before funds fell to $4 billion; by the end of last year they had fallen to $2 billion and would skid still lower.

The dwindling assets are fueled in part by investors withdrawing their money; the withdrawals, in turn, must have something to do with uninspiring monthly returns, shown in the chart below.

Maybe Thiel should blame the government. He is said to reign over a Silicon Valley "mafia" of former acolytes, but the libertarian has never been particularly comfortable with power when it's wielded by the government. Tech-savvy Thiel may have been smart enough to invest in Facebook, but he's had trouble navigating an economy increasingly run out of Washington.

Thiel's Clarium Capital was gutted during the financial meltdown last year. This year has been slightly kinder; Clarium fell just 1.7 percent January through May as the S&P 500 gained as much. Last month, Clarium fell 1.4 percent even as the S&P rallied, rising 4 percent. (See fund report below.)

No gain means no money for Clarium; the fund reportedly derives its fees only from earnings, rather than as a percentage of assets.

That might explain Thiel's sour comments at a recent Wall Street conference, where minutes (left) reveal the Facebook investor declared major research "to be fraud" and described the "tech boom of the late 1990s as fraud." Does this mean Thiel will refund the fortune he made selling PayPal, which made its name during said boom?

Thiel also apparently "discussed large-cap tech names in a pejorative manor [sic], stating that betting on established technology companies like Cisco, Microsoft and Intel is a bet on no innovation."

"He thinks we should be looking for companies that are truly innovating, of which there are only a handful."

Presumably, only Thiel knows who the truly innovative companies are. Too bad he's not been able to translate that knowledge into cash lately.

(Top pic: Steve Maller for TechCrunch 50)

Morgenstern runs Valor Equity Partners, which led a $40 million investment in Tesla in February 2008 and controls a seat on the board. The badly mismanaged electric-car startup quickly blew through Valor's money; by October, it was down to $9 million in cash. Despite raising more money from investors, Tesla is running on fumes, and collecting deposits for its Model S electric sedan, a car which exists only as a barely drivable quasi-prototype. Tesla requires hundreds of millions of dollars more than it has to make the Model S a reality — which is why Morgenstern's talk of new money is so interesting.

Morgenstern is briefly visible in the video, apparently recorded by an unknown Tesla fan who hopped in with Morgenstern when offered a test drive, and his face matches another published photo. A Mexican restaurant in Highland Park, a suburb north of Chicago, briefly appears in the shot. According to public records, Morgenstern's family foundation is based in Highland Park. The car is one of Tesla's Founders Series, the first built, and Morgenstern has been reported as one of the buyers in that series. He did not return a message left for him at Valor.

As he pulls away from the restaurant, Morgenstern takes a call and mentions that he's driving around Highwood, a nearby suburban district. During the ride, Morgenstern took a call and discussed Tesla's finances, including rumors previously reported in Valleywag that Tesla was about to take money from a strategic investor. Morgenstern expressed confidence that the deal would be announced Monday or Tuesday. Other sources Valleywag spoke to are less sanguine. Tesla CEO Elon Musk is loathe to surrender control of the company to someone — and yet a new investor would be understandably reluctant to invest if Musk's replacement as CEO weren't a condition of the deal.

So here's the question: Is the video a genuine scoop — or a hoax staged by Tesla?

It does seem curious that Morgenstern's phone just happened to ring seconds after he starts cruising down the street. But if it's a hoax, it's a very foolish one. For one thing, investors don't like their deals getting leaked before the ink is dry. A leak like this, if intentional, may well scuttle the deal, or weaken Tesla's negotiating stance.

And then there's this: Morgenstern uttered something particularly damning on the phone. He said the investment will "make people believers that the sedan will be produced."

Not, mind you, actually allow Tesla to produce its new Model S. It will merely make people believe that it will. That could be read as encouraging optimism among potential buyers. Or it could be read as an intent to deceive people into handing over deposit money for a car that Tesla currently cannot build. Would he really have said that if he knew he was being taped?

For all of their ridiculous economic power—which is truly scary to contemplate—PE firms are essentially made up of people who want to have their cake (MONEY) and eat it too (STILL BE POPULAR WITH THE PLEBES). Or, they just want to make their money and retire with it in total anonymity. The SEIU draws attention to them, and as unsophisticated as the protests may seem (although they make some good points), they succeed just by getting people to think about private equity. Which is more than most people do in the first place. No billionaire really wants to explain to the public why he pays to lobby for massive tax loopholes for himself.

"We think the buyout industry and the way it operates are systematic of what's wrong in this economy," said Stephen Lerner, director of the union's private equity project. "We want to make them responsible corporate citizens."

The private equity industry counters that the union is using street theater and overheated rhetoric to bolster its membership rolls.

"They're using a battering ram of increasingly extreme and hysterical attacks," said Douglas Lowenstein, the president of the Private Equity Council, an industry lobbying group. "They've undermined any opportunity for constructive dialogue."

Private equity firms should really figure out how to handle this stuff better. They'll never win when their spokesman is just another white dude in a suit in an office in Washington, and the SEIU's mascot is Lewis Black, who's starring in this propaganda video for the cause:

[NYT; pic via SEIU]

Update: Michael Chang writes:

This was indeed a firm sanctioned event to express our appreciation to the top intermediaries who had been kind enough to send us investment opportunities at the start of our new fund. In fact, we just had our annual meeting to our LPs today and discussed the biathlon with them. They found it a creative way to drive increased deal flow to the firm.

A lack of M&A activity could have long-term repercussions for the venture industry. To attract investors to new funds, VCs need to have a track record of successfully flipped startups, and those deals require buyers and financing. Which might explain why everyone's being so nice to Frank "not a symbol of corruption" Quattrone, whose Qatalyst M&A advice shop is one of many springing up to take Wall Street's place. (Photo by Sproston Green)

ACORN and The Working Families Party and their coalition are calling for a protest at noon.

"The Carlyle Group is the poster child for an industry that has made billions by fleecing taxpayers and loading up companies with unsustainable levels of debt," said Dan Cantor, Executive Director of the Working Families Party. The Carlyle Group is one of the five biggest buyout firms in the nation. Carlyle partner Bruce Rosenblum chairs the buyout industry's lobbying arm, the Private Equity Council—Washington, D.C.'s most outspoken defender of tax breaks enjoyed by buyout firms and their partners.

"David Rubenstein made $260 million last year, yet he paid taxes at a lower rate than the doorman at this hotel. Not only that, companies like Carlyle don't pay their fair share in corporate taxes." said Pat Boone, President of NY ACORN.

"What does this mean to your average New Yorker?" asked Boone. "Plenty. The takeover industry's tax dodges increase the tax burden on the rest of us while undercutting vital public services like schools, healthcare and affordable housing."

The coalition noted that regular New Yorkers have less to spend on taxes these days. Between 2002 and 2005, median rents increased almost 10 percent across the city, while the average household income actually dropped by more than 6 percent.

But at least the poors have cute posters!