Saturday, November 01, 2008

New President to Approve the Mother of All Stimulus Packages

Congress plans on throwing more money at America's financial problems. A huge new stimulus package will be signed the first week or two of the new President's term. At least that's the prediction of Carlyle Group co-founder David Rubenstein. With offices down the street from the White House and numerous political legends calling him "boss", Rubenstein certainly knows best.

David gave this assessment to the good folks of Alaska on October 25. He suggested they go after the hundreds of billions that will soon gush from our government on the Potomac. Rubenstein knew full well his team at Carlyle already had this strategy in play.

The co-founder positioned the private equity underwriter (PEU) to win under Red or Blue government. On the payroll are ex-Clintonista's Mack McLarty and David Marchick. Senator Evan Bayh, an Indiana Democrat, has Carlyle as #7 on his lifetime donor list. Carlyle's red qualifications are legendary, with their long ties to the Bush family. Those could expand if they win Lehman Brother's PEU at auction. Brother Jeb and cousin George Herbert Walker could join #41 and #43 as beneficiaries of Carlyle largess.

Positioned to win more government business under either major political party, the sales job comes next. Carlyle's Booz, Allen, Hamilton could be consulting with Uncle Sam on the stimulus package at this very moment. David mentioned the following "stimulation" areas in his talk.

Alternative energy
Power grid
Public Infrastructure
Job Creation programs

How can Carlyle deliver to a needy federal government? They own hundreds of companies, many in those industries.

Aerospace and Defense --Carlyle currently holds 7 firms, historically they show 24.

Energy and Power--They own 33 companies in this sector and have a joint venture Riverstone Holdings

Automotive and Transportation--Carlyle has 8 companies, historically they've owned 16

Infrastructure--Robert Dove heads up this $1.15 billion fund

Tech and Business Services--The PEU owns 69 companies in this sector.

Job Creation-Carlyle's Vought Aircraft Industries took $35 million from the State of Texas to add 3,000 jobs. Their big job announcement since then was cutting 600 jobs. Carlyle may have hundreds of affiliates willing to do likewise.

Isn't it interesting how the word "stimulation" works well with Corporafornication? Carlyle will work hard to get their share of any economic boost package. They have the means and motive, an average 30% return.

Greed and leverage got us into our current financial mess. David Rubenstein plans on priming those same drivers to get us out. OK, greed and little less leverage. But either way, this PEU plans on winning, preferrably on an unfair trading table, i.e. one tilted in the Carlyle Group's favor.

Who will pump up the American economy in early 2009? Will it be Barack Obama or might John McCain pull a Harry, as in Truman by eeking out a surprise win? Either way, I feel another round of Corporafornication coming. I can see Fred Sanford saying, "Watch out Elizabeth, this might be the big one."

Warning: Do not use stimulus enhancing packages if the patient has a heart condition.

How damaged is America's economic pump from decades of artery crusting greed? Time will tell how long we stay in the intensive care unit.

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