Credit Crunch Hits Carlyle Unit

[beans on toast]

"Carlyle Capital Corporation, the fund manager backed by the giant private equity firm Carlyle Group, has not been able to meet several payment demands.

The company said it received margin calls from seven financing groups that totalled $37m and it was not able to meet four of those requests. "

http://news.bbc.co.uk/1/hi/business/7280892.stm

These guys used to go around throwing billions around like confetti, now they cant even scratch together a few million. It must be brutal out there for these guys.

[Converted Lurker]

surprised this has not caused more of a stir on 'ere TBH, given who Carlyle are This is surely 'end of days' material for some amongst us

[skomer]

Their entry on Wikipedia makes an interesting read too

http://en.wikipedia.org/wiki/Carlyle_group

...."Connections between the Carlyle and the Bush family have inspired controversy, particularly in relation to the War on Terror and the Iraq War. George H. W. Bush and his Secretary of State James A. Baker III have at times been advisors to the group. One writer claimed that Saudi Arabian interests have given $1.4 billion to firms connected to the Bush family. Of this figure, $1.18 billion comes from contracts awarded to defense contractor Braddock, Dunn & McDonald, which Carlyle sold before George H. W. Bush became an advisor.[15] A Carlyle spokesman noted in 2003 that its 7 percent interest in defense industries was far less than several other venture capital groups.[16]..."

[stuckmojo]

big news actually.

Shows how ALL hedge funds were into subprime one way or the other.

Times are getting interesting

[Methodius]

big news actually.

Shows how ALL hedge funds were into subprime one way or the other.

Times are getting interesting

This is correct, even those funds not holding asset backed securities directly are indirectly exposed as leverage dries up and margins are increased. A doubling of the margin requirements for hedge funds imposed by their prime brokers - the very same firms who have at least 1 trillion USD to write off paying for their sub-prime folly - will force at least half of them out of business. The parasites are being poisned by a new medicine brewed in the trailer parks of the Unites States and refined in the suburbs of Europe.

[Converted Lurker]

big news actually.

Shows how ALL hedge funds were into subprime one way or the other.

Times are getting interesting

you could write a book on why this is so relevant and what it tells us, one point, can they not summon up a few quid for their margin calls? Of course they could, peanuts relatively, so why aren't they? (no conspiracy icon, this'll have to do)

[Methodius]

so why aren't they? (no conspiracy icon, this'll have to do)

Were they to sell one set of assets to pay the margin calls on another, they would have to admit the other assets were also worth a great deal less than they are currently proclaiming. This in turn would show that assets backing the debt that created the money in the first place are illusory. They are being told that this must not happen lest the entire house of cards is blown away in a gust of monetary wind.

[Converted Lurker]

Were they to sell one set of assets to pay the margin calls on another, they would have to admit the other assets were also worth a great deal less than they are currently proclaiming. This in turn would show that assets backing the debt that created the money in the first place are illusory. They are being told that this must not happen lest the entire house of cards is blown away in a gust of monetary wind.

fascinating isn't it.

[Blue Peter]

Were they to sell one set of assets to pay the margin calls on another, they would have to admit the other assets were also worth a great deal less than they are currently proclaiming. This in turn would show that assets backing the debt that created the money in the first place are illusory. They are being told that this must not happen lest the entire house of cards is blown away in a gust of monetary wind.

Are they actually being told (if so, by whom?), or is there an unspoken agreement that this isn't the done thing?

And will one have to break ranks eventually, or will the funds just be left to die, one by one?

Peter.

[eric pebble]

The parasites are being poisned by a new medicine brewed in the trailer parks of the Unites States and refined in the suburbs of Europe.

Love it!

[Methodius]

Are they actually being told (if so, by whom?)

Yes, told by the people that run the world's financial system.

And will one have to break ranks eventually, or will the funds just be left to die, one by one?

I am sure they will be allowed to perish in the order most favourable to their ultimate backers. It's irrelevant though, the ship has been holed below the water and cannot be stopped by any amount of re-arrangement of the deck chairs.

[Converted Lurker]

Are they actually being told (if so, by whom?), or is there an unspoken agreement that this isn't the done thing?

And will one have to break ranks eventually, or will the funds just be left to die, one by one?

Peter.

Peter if they can't make 'it work' it's well and truly fukced up. Forget the graphs, data, opinions, books, if these guys are getting the fukc out of dodge then it's dodgier than being in B-head city centre of a sat night without a knife... and Carlyle probably helped to make the knife and organised the CCTV cameras

Edited March 6, 2008 by Converted Lurker

[beans on toast]

Banks taking a pounding today (again!), Barclays and RBS down 3.5%. Theres something really nasty round the corner for Banks.

[Methodius]

Theres something really nasty round the corner for Banks.

That doesn't come close to describing the full horror of what is going to happen. The banks are buried in layer upon layer of debt, each of which is bigger than the GDP of entire continents. As the speed of unwind increases, as it will over the next few months, they will be pounded to a fine powder by the relentless waves of write downs, asset price hyper-deflation, funding cost hyperinflation, regulatory backlashes, credit derivative payouts and, finally, a mass understanding of the dreadful fraud committed on the whole of humanity by the usurers.

[eric pebble]

That doesn't come close to describing the full horror of what is going to happen. The banks are buried in layer upon layer of debt, each of which is bigger than the GDP of entire continents. As the speed of unwind increases, as it will over the next few months, they will be pounded to a fine powder by the relentless waves of write downs, asset price hyper-deflation, funding cost hyperinflation, regulatory backlashes, credit derivative payouts and, finally, a mass understanding of the dreadful fraud committed on the whole of humanity by the usurers.

Bloody hell........ Armageddon....... It wouldn't totally surprise me if this is true..... Totally mind-numbing...

[newbie]

Carlyle Capital’s CEO said:

The last few days have created a market environment where the repo counterparties’ margin prices for our AAA-rated U.S. government agency floating rate capped securities issued by Fannie Mae and Freddie Mac are not representative of the underlying recoverable value of these securities. Unfortunately, this disconnect has created instability and variability in our repo financing arrangements. Management is actively working with the Company’s repo counterparties to develop more stable financing terms.

Link

So what he's saying is: my assets are 'worth' more than the price that I can get for them. Which is a variant of: my house is worth millions, even though no one would be prepared to buy it at that price.

The CEO is suffering from the 'subjective overvaluation syndrome'. He probably thinks the same about the value of his central London house. I think he should do take some night classes at his local politechnic starting with Economics 101 or, better still, do some work experience at a fruit market.

[Blue Peter]

That doesn't come close to describing the full horror of what is going to happen. The banks are buried in layer upon layer of debt, each of which is bigger than the GDP of entire continents. As the speed of unwind increases, as it will over the next few months, they will be pounded to a fine powder by the relentless waves of write downs, asset price hyper-deflation, funding cost hyperinflation, regulatory backlashes, credit derivative payouts and, finally, a mass understanding of the dreadful fraud committed on the whole of humanity by the usurers.

There doesn't seem much else to say after that

Peter.

[FernandoMorientes]

bump.....yet another reason not to take credit at this moment in time

[redgenieuk]

Link

So what he's saying is: my assets are 'worth' more than the price that I can get for them. Which is a variant of: my house is worth millions, even though no one would be prepared to buy it at that price.

The CEO is suffering from the 'subjective overvaluation syndrome'. He probably thinks the same about the value of his central London house. I think he should do take some night classes at his local politechnic starting with Economics 101 or, better still, do some work experience at a fruit market.

And my god will a few brits be thinking that in a few months time......!

[Guest tbatst2000]

More on this one.

[Converted Lurker]

More on this one.

There are moments when you really sit up and take notice of the fact that we're now in the zone of the end game, they have called the end to the game, as stated before you don't need; charts, pie graphs, cgnao teasers, constant links to articles etc, follow the money, its gone.

[_w_]

So what he's saying is: my assets are 'worth' more than the price that I can get for them. Which is a variant of: my house is worth millions, even though no one would be prepared to buy it at that price.

Quite. It turns out that 'homo private equiticus', the master race destined to rule the world, is made up of deluded whining turds. I'm not into genocide but I really hope this particular branch of the human race will face extinction as a result of this crisis.

[mattyboy1973]

phew - sorry - I misread the thread title as carlisle united

[newbie]

Quite. It turns out that 'homo private equiticus', the master race destined to rule the world, is made up of deluded whining turds. I'm not into genocide but I really hope this particular branch of the human race will face extinction as a result of this crisis.

Just cowboys riding a rising market. Like corporate raiders of the 1980s.

[Mr Nice]

Link

So what he's saying is: my assets are 'worth' more than the price that I can get for them. Which is a variant of: my house is worth millions, even though no one would be prepared to buy it at that price.

The CEO is suffering from the 'subjective overvaluation syndrome'. He probably thinks the same about the value of his central London house. I think he should do take some night classes at his local politechnic starting with Economics 101 or, better still, do some work experience at a fruit market.

the important part of that is where he points out that they are US Government backed issues.

if they were normal issues, then the value of them WOULD be whatever the market would pay.

Since they are presumably backed by the USG, they might be holding off, waiting for the government to step in and make good their balance.