Carlyle Group's Plan to Takeover the Banking System

[cyberpj]

Thursday, April 3, 2008
Carlyle Group's Plan to Takeover the Banking System

So what's Treasury Secretary Henry Paulson's call for changes in regulation of the financial markets all about? A clue may have been revealed today by Randal Quarles, former Under Secretary of the Treasury who led the Treasury Department's effort in the coordination of the President's Working Group on Financial Markets and is a current Managing Director at Carlyle Group.

snip-
He said that public markets will not supply the necessary funds because they don't have the capabilities to study in detail the risks and potential rewards of the complex financials of financial institutions. He said private equity firms have the capabilities to do so and to supply the necessary funds. (N.B. Carlyle Group is a private equity firm).

snip-
Quarles stated that some changes in the structure of regulations that Paulson proposed were necessary but would take time to develop. He specifically stated that one regulation that needed to be changed is the limitation on the size of positions that non-banks can take in banks. (Note: Limitations in the size of non-banks positions in banks now limits Carlyle Group from taking large positions in banks).


During the Q & A session, one questioner summarized Quarles talk this way:
So what you said here today is that you would like to see regulatory changes to make it easier for private equity to take major positions in banks? And private equity, through various entities on and offshore gets its money from banks. So what you want is an environment where private equity can borrow from banks to takeover banks?

In response, Quarles laughed.
We might add this private equity acquisition of financial institutions will go on as the general public is scared off from investing in the financial institutions by scare headlines, or as Quarles would put it, "Public markets just don't have the capabilities to judge the risks and rewards of the various financial institutions." Translation: The public is not clued in on which firms the insiders have decided to let survive, like JPMorgan, and which they are going to takedown, like Bear Stearns.

link:
http://www.economicanalyticsgroup.com/2008/04/carlyle-groups-plan-to-take-over.html

[peacetalksforall]

1. I wish I had never read this because it is plausible and fits and is scary as hell.

We are in the process of being owned. Noone could ever know or conceptualize slavery like this, if true.

[TheFarseer]

2. I heard the Carlyle Group was missing margin calls

given that, does this seem like an organization with the capital to do much of anything? - just telling you what I heard.

[KharmaTrain]

15. Them & Bain Capital

I found it quite interesting that that margin call came down the same week of Bears Stearns collapse...and why this regime was so quick to bail BS out. I'm convinced there's a connection.

Also, I've been following the sale of Cheap Channel...Bain capital was supposed to handle the funding using Carlyle Group money. This deal has been stuck in the mud for months. In "healthier" times, this deal would have come and gone by now.

There's a lot of very rich people with a lot of worthless paper in their portfolio right now...and they're hoping we don't see it and that the booooos regime will bail them out. That's what corporate welfare is all about.

[JohnnyBoots]

25. Bain was started by Romney. n/t

[Rage for Order]

3. Um, it isn't working

Anatomy of a Carlyle Collapse

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/13/AR2008031303927.html

By early evening, Carlyle Capital, a publicly traded affiliate of Carlyle that is incorporated on Guernsey, an island in the English Channel, was preparing an announcement that it could not meet the banks' demands. Carlyle Capital would collapse, and its investors would lose $900 million -- including Carlyle Group executives who owned 15 percent of the company.

Carlyle Capital is now a blot on that record. The company's business was to borrow money to buy mortgage-backed securities, and to make money on the difference between the firm's borrowing costs and what it earned on the interest paid on the bonds.

Its stock closed at 35 cents a share yesterday after the fund defaulted on more than $16 billion in assets. The shares have dropped 93 percent since Tuesday.

[cyberpj]

5. Not sure but I think Carlyle Capital is only one part of many parts of Carlyle.

And I wouldn't count them out yet - seems everybody's managing to get bailed out here lately.

[ColbertWatcher]

4. Bastards.

I suspected it (old post) but never had any hard evidence.

Now, this just makes me sick.

[cyberpj]

8. There you go, being 'on' to them again. Now if we could just explain the utter evil of it all

to Joe America.

Truly, I'm expecting to have to turn in my worthless US dollars for shiny new Ameros very soon.

All of this financial disaster can be construed as a quick way to gain acceptance for the North American Union and some flashy new money to compete with Euros.

[ColbertWatcher]

11. Joe America will be too afraid to disagree...

...what with Mexicans and terrorists jumping out of the woodwork.

Oh, and bears...

[midnight]

6. Please don't let this happen.....

I don't have all the reasons or understanding, but it sounds like a real bad idea for the working people.

[texastoast]

7. Just one more piece in a big plan, apparently

Money, markets, regulation, land, services, resources.

How thin the veneer of civility.

[cyberpj]

9. And it sure is speeding up as we approach the 2008 election, innit? nt

[soothsayer]

10. I guess this is why poppy said he had $40 billion to fight anyone who wanted to kill the Fed

"over my dead body" he reportedly said.

[cyberpj]

19. While he wears the flag on the inside of his suit jacket...

[Karenina]

12. Such a lovely bunch of predators...

[annabanana]

13. k&r. . .. . . ... . n/t

[HughBeaumont]

14. Slimy buncha bastards, just as they've always been . . .

Wish 'Murka would get the balls to ask what they knew about the worst terrorist attack on US soil . . . before it happened . . .

http://journals.democraticunderground.com/HughBeaumont/38

[Flying Dream Blues]

18. Good blog...wish I could say I enjoyed reading it, but great job! nt

[ThomWV]

16. Is there a crediable source for this or is this Blog the only place you find it?

[cyberpj]

20. Well... I'm at work now but a quick Google shows other links of

people reporting about the speech. I'm not sure this is something you'd find in the press but I did see this, posted by The Washington Network Group (whatever that is) - you're free to search on your own though.


Event Title : Restructuring Financial Regulation
Convener : The National Economists Club


Event Date : Apr 3 - Thu

Start Time : 12:00 PM
End Time : 1:30 PM
Event Description :

Randal Quarles
Managing Director
The Carlyle Group

"Restructuring Financial Regulation"

The Treasury Department is scheduled to issue a report that will set an agenda for regulatory reform legislation over the next several years. There is widespread agreement that financial regulation is overly complex, inefficient, and prone to arbitrage and coverage gaps. Until recently, change was considered impossible. However, distress in the US financial sector has created a political environment in which fundamental regulatory restructuring may in fact be possible. With the release of the Treasury Department report, both industry and Congress are preparing to engage seriously on the issue. What should be the objective of such a reform? Should the focus be on the institutional structure or on regulatory mandate? What is the proper balance between the benefits of regulatory competition and the costs of regulatory fragmentation? Randal Quarles, former Under Secretary of the Treasury who led the Treasury Department's effort in the coordination of the President's Working Group on Financial Markets, addresses these issues.




Location :
Chinatown Garden Restaurant
618 H Street, NW
Washington, DC

(Just east of the H Street exit from Chinatown/Gallery Place
Metro Station)


Registration Fees :
$15 for NEC members, SGE, NABE, Wharton Club of DC and Press
$20 for Non Members



Do member rates apply to WNG? : No
How to Register :
Phone: [phone], option 1 or 2 or email [e-mail], by 11a.m., 1 day before event. Walk-ins may be ok.

[cyberpj]

21. EVENT MATERIALS and a PODCAST - (Google Rules!)

Don'tcha just love 'The Google' ?

National Economists Club
Event Materials
Materials from 2008 events are here. Use the links on the left to find material from previous years. Learn more about NEC podcasts here.

April 3- "Restructuring Financial Regulation"
Randal Quarles
Managing Director, The Carlyle Group

Podcast
http://www.national-economists.org/podcasts/nec054.mp3

Fact Sheet
http://www.national-economists.org/gov/quarles08Treasury.pdf

Link:
http://www.national-economists.org/speaklinks.html

[Serial Mom]

17. Guess Carlin was right... "the real owners of America"

and now trying for the world!


http://www.youtube.com/watch?v=kJ4SSvVbhLw

[cyberpj]

24. As a Carlin fan of many years... I think Carlin is always right. :) nt

[samsingh]

22. that would be scary

[southerncrone]

23. Kick. Everyone needs to be aware of this!