March 14, 2008

Okay, sigh, here is the Carlyle Group item

DO I fall for this?

No, I do not, but as I keep being sent links about it via email, I've chosen to publish this one.

Believe me, the Big GuyZ money is safe, it's the little suckers, just as in the Great Depression who are gonna eat this one.

Anybody know the good offshore safe havens for the Robber Barons these days??

The BuZh plan is to "do" Asia, trust me on this .. think that they are the new Rothschilds with their crime syndicate and will funnel all the drugs and arms through Asia right over to Mexico. One failure like this won't set THEM back very much. They think the noble rights of KINGS is in their blood.

Take their religion and shove it, their strategy has worked a charm, though, eh???

The spiral will continue, nobody's seen it all yet, no one CAN call it .. we are KlusterfucKed, but the Big Money at Carlyle Group is not.

When do these lawsuits really get on a boil?? Where is the EVIDENCE that the SEC of anyone else will take the really Big Players to court for RICO acts??

Lots and lots of hedge funds will bite the dust, so what?

Let's get the GARDN plan going to save our properties and not get too het up about this BS.


Carlyle Capital Nears Collapse as Rescue Talks Fail (Update7)

By Edward Evans

March 13 (Bloomberg) -- Carlyle Group said creditors plan to seize the assets of its mortgage-bond fund after it failed to meet more than $400 million of margin calls on mortgage- backed collateral that plunged in value.

Carlyle Capital Corp., which began to buckle a week ago from the strain of shrinking home-loan assets, said in a statement it defaulted on about $16.6 billion of debt as of yesterday. The dollar fell to a 12-year low against the yen and European stocks tumbled.

The fund fell 87 percent in Amsterdam trading. Carlyle Group, co-founded by David Rubenstein, tapped public markets for $300 million in July to fuel the fund just as rising foreclosures caused credit markets to seize up. In the past month, managers led by Peloton Partners LLP have closed at least a dozen funds, sold assets or sought fresh capital as banks tightened lending standards.

``If Carlyle's lenders want their money right away, they'll liquidate the fund,'' said Hank Calenti, a London-based analyst at RBC Capital Markets. ``That will put pressure on already stressed credit markets.''

Lenders will ``promptly'' take over all of its remaining assets after it failed to reach an agreement with lenders, Carlyle Capital said. Any remaining debt is expected to go into default ``soon,'' the fund added.

`Single Fund'

The fund's losses were caused by ``excessive leverage,'' said Arthur Levitt, a senior Carlyle adviser, in a Bloomberg Radio interview today. `

`This did not affect the overall Carlyle enterprise,''
said Levitt, former chairman of the Securities and Exchange Commission and a board member of Bloomberg LP, the parent of Bloomberg News.

``This was a single fund, and I suspect as this plays out, you are going to see a lot of other private-equity companies, a lot of banks, going down the same road,'' he said.

Carlyle Capital's plea for refinancing on residential mortgage-backed securities failed late yesterday after a pricing service used by some lenders reported a decrease in the value of the assets, the firm said.

``The basis on which lenders are willing to provide financing against the company's collateral has changed so substantially that a successful refinancing is not possible,'' Carlyle said in the statement. It expects additional margin calls today of $97.5 million.

`All Options'

Carlyle Group and its funds are not liable for repurchase agreements that Carlyle Capital used to buy residential mortgage-backed securities, Hong Kong-based spokeswoman Dorothy Lee said in an e-mail today. ``The Carlyle Group's only material financial exposure to CCC is through a $150 million unsecured subordinated revolving credit agreement with CCC,'' she said.

``At this point we are exploring all options'' for Carlyle Capital, Emma Thorpe, a spokeswoman for Carlyle Group in London, said in a telephone interview. She declined to specify the options being considered.

Carlyle Group said in a statement it had worked ``exhaustively'' with the fund to negotiate new financing.

``Carlyle took extraordinary measures to help CCC manage through its liquidity crisis,'' the e-mailed statement said. ``Unfortunately, extreme volatility and market movement during this liquidity crisis created a hostile environment for CCC and similar types of vehicles.''

Carlyle's fund has said its so-called agency debt has an ``implied guarantee'' from the U.S. government.

Contagion Delay

The industry is reeling from its worst crisis because bankers -- staggered by almost $190 billion of asset writedowns and credit losses -- are raising borrowing rates and demanding extra collateral for loans.

The Standard & Poor's 500 Index fell as much as 2 percent today, gold traded at $1,000 an ounce for the first time in New York and Treasuries extended gains as investors took the collapse of the talks as a sign that credit losses are deepening.

``This is not only a problem for Carlyle,'' Jochen Felsenheimer, the Munich-based head of credit strategy at UniCredit SpA, wrote in a note to clients today. ``We expect a further flood of downgrades especially of higher-rated securities, putting enormous pressure on the system.''

Carlyle Capital originally delayed and then cut the size of its IPO by about 25 percent as the subprime contagion began. In all, the fund used about $670 million of equity to amass a $22 billion portfolio of mortgage debt. For every dollar of equity, the pool borrowed $32.

``It was a poorly conceived fund launched at the worst time,'' said Toby Nangle, a member of the strategic policy group at Baring Asset Management in London, which manages $55 billion.

The shares, first sold to investors for $19 each, fell $2.45 to 35 cents today.

`Monitoring Developments'

``At this moment there's no cause for us to suspend trading'' in Carlyle Capital, Paul van Dijk, a spokesman for the Dutch securities regulator AFM in Amsterdam, said in an interview today. ``We're closely monitoring developments.''

Carlyle's counterparties are a dozen Wall Street firms including Citigroup Inc. and Deutsche Bank AG, according to the fund's annual report. The banks use repurchase agreements to lend money and require securities be put up as collateral. As the perceived creditworthiness of asset-backed bonds declined, the amount of money that can be borrowed using them as collateral fell.

Not the End

Drake Management LLC, the New York based-firm started by former BlackRock Inc. money managers, said yesterday it may shut its largest hedge fund, while GO Capital Asset Management BV blocked clients from withdrawing cash from one of its funds. Other funds hit include Peloton Partners LLP's $1.8 billion ABS Fund, Tequesta Capital Advisor's mortgage fund and Focus Capital Investors LLC, which invested in midsize Swiss companies.

``Carlyle won't be the end of it,'' said Greg Bundy, executive chairman of Sydney-based merger advisory firm InterFinancial Ltd. and a former head of Merrill Lynch & Co.'s Australian unit. ``There's more to come. The problem is no one can give you an educated guess about how much.''

To contact the reporter on this story: Edward Evans in London at at

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