Bloomberg: (Bushco Arms Dealer Company) Carlyle Fund Gets Default Notice After Margin Calls

[El Pinko]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTMUlkdyC9.8&refer=home


Carlyle Fund Gets Default Notice After Margin Calls

By Edward Evans


March 6 (Bloomberg) -- Carlyle Group's publicly traded mortgage bond fund failed to pay margin calls, prompting creditors to seek immediate repayment, as the burning subprime mortgage market scorches investors in even the highest-rated debt. The stock fell 58 percent.

Carlyle Capital Corp. missed four of seven margin calls yesterday totaling more than $37 million, the Amsterdam-listed fund said today in a statement. The company expects to get at least one more notice of default related to the margin calls.

Started by David Rubenstein in 1987, Carlyle expanded its mortgage investments last year, selling $300 million of shares in Carlyle Capital. The fund used loans to buy about $22 billion of AAA rated mortgage debt issued by Fannie Mae and Freddie Mac, securities that Carlyle says have the ``implied guarantee'' of the U.S. government. Even those bonds have slumped, leading to the failure of hedge funds led by Peloton Partners LLP.

``The credit crisis is spilling over to the next asset class, agency bonds,'' said Philip Gisdakis, senior credit strategist at UniCredit SpA in Munich. ``There's never just one cockroach. If you see one highly leveraged hedge fund going bust, then there's another on the way.''

[On the Road]

1. Holy Mackeral!

Failing four margin calls is not a minor thing. 58% drop? What the hell were they doing speculating on margin in this kind on environment? The chickens certainly have come home to roost.

It's like the brothers at the end of Trading Places. I can board members keeling over on hearing the news.

[ben_meyers]

2. No problem, just call George Soros

He'll kick in another 100 million like last time.

[spag68]

3. Soros

You have made a mistake about Mr. Soros. I do not believe he is involved with the Carlye group. Poppy bush on the other hand is.

[Frustratedlady]

4. And his sons...at least two, aren't they?

They won't be able to wipe the smile off our faces if they go down with the ship. At least we won't be alone in the food line.

[ben_meyers]

5. To the tune of 100 million, is that a problem?

As the company's reputation grew, so did its cast of players. Among its new backers were James Baker and Richard Darman (both Reagan and Bush administration alums) and investor George Soros, who chipped in some $100 million into the Carlyle Partners L.P. buyout fund. With the help of its 'access capitalists' such as Baker and Saudi Prince al-Waleed bin Talal (whom the firm helped add to his fortune in a 1991 Citicorp stock transaction), Carlyle made deals in the Middle East and Western Europe (including a bailout of Euro Disney) in the mid-1990s.


The collection of influential characters who now work, have worked, or have invested in the group would make the most convinced conspiracy theorists incredulous. They include among others, John Major, former British Prime Minister; Fidel Ramos, former Philippines President; Park Tae Joon, former South Korean Prime Minister; Saudi Prince Al-Walid; Colin Powell, former Secretary of State; James Baker III, former Secretary of State; Caspar Weinberger, former Defense Secretary; Richard Darman, former White House Budget Director; the billionaire George Soros, and even some bin Laden family members. You can add Alice Albright, daughter of Madeleine Albright, former Secretary of State; Arthur Lewitt, former SEC head; William Kennard, former head of the FCC, to this list. Finally, add in the Europeans: Karl Otto Poehl, former Bundesbank president; the now-deceased Henri Martre, who was president of Aerospatiale; and Etienne Davignon, former president of the Belgian Generale Holding Company.

http://www.sourcewatch.org/index.php?title=Carlyle_Group