Monday, February 16, 2009

Carlyle Group Revamps Global Financial System

U.S. Treasury Chief Tim Geithner sold world economic leaders on his plan for public-private partnerships to save the global financial system. Private equity underwriters (PEU's) are the big winner. The Carlyle Group raised $1 billion for investment, with plans for $2 billion more. This is on top of a $1.35 billion distressed debt fund. The Stimulus package includes $26 billion in tax breaks for companies buying back their own debt. Citizens, who dipped into their IRA or 401(k) to save their house, get no break. WaPo reported:

Treasury Secretary Timothy F. Geithner last week said he will seek private-sector help for the banks, offering loans at favorable rates and putting up government backing to reduce the risks to investors like Carlyle.

With $40 billion in cash on the sidelines waiting for the right play, Carlyle could find many profitable deals in the financial sector.

Two other signs are worth noting. One, Carlyle co-chairs two efforts at remaking the global financial system. Co-founder David Rubenstein heads the World Economic Forum study, while Senior Adviser Arthur Levitt leads a financial industry study group.

Two, what Carlyle's Rubenstein says, the Obama team does. The blue links to the current White House are numerous. Corporafornication remains alive and well.

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