Carlyle Group's plan to takeover the banking system

[antigop]

http://www.economicanalyticsgroup.com/2008/04/carlyle-groups-plan-to-take-over.html

So what's Treasury Secretary Henry Paulson's call for changes in regulation of the financial markets all about? A clue may have been revealed today by Randal Quarles, former Under Secretary of the Treasury who led the Treasury Department's effort in the coordination of the President's Working Group on Financial Markets and is a current Managing Director at Carlyle Group.

Anybody read anything else about this?

<edit to add> Comments? Anybody know anything about this? Have you read anything anywhere else? Any other sources?

[gateley]

1. Kicking --

I'm not savvy on this subject, but would like to see input from those who are.

[antigop]

2. I've followed the subprime mess, but this is the first I've read about this, so I'm asking

Anybody read anything about this anywhere else?

Do we have any other sources?

[AdHocSolver]

11. Check out the Glass-Steagall Act which regulated financial institutions after the Great Depression.

There is some discussion about this act together with links in wikipedia. Also try googling Glass-Steagall.

This act (also called, IIRC, The Banking Act of 1933) was designed to regulate financial institutions to prevent the kind of scams and thievery that brought down the banks and the economy in the 1929 crash.

The corporations spent a lot of effort over the years to get rid of Glass-Steagall and its regulatory functions. They finally succeeded in eliminating it in the late 1990's when Bill Clinton signed legislation to repeal the Act.

The Act was designed to prevent the kind of speculation in real estate that brought on the housing bubble and meltdown that is happening right now.

The relevant information can be found in the quote cited in reply number 6:

(snip)
.......

Quarles stated that some changes in the structure of regulations that Paulson proposed were necessary but would take time to develop. He specifically stated that one regulation that needed to be changed is the limitation on the size of positions that non-banks can take in banks. (Note: Limitations in the size of non-banks positions in banks now limits Carlyle Group from taking large positions in banks).


We might add this private equity acquisition of financial institutions will go on as the general public is scared off from investing in the financial institutions by scare headlines, or as Quarles would put it, "Public markets just don't have the capabilities to judge the risks and rewards of the various financial institutions." Translation: The public is not clued in on which firms the insiders have decided to let survive, like JPMorgan, and which they are going to takedown, like Bear Stearns.

.......

The financial regulations passed under Franklin Roosevelt and cited in the snippet were designed to prevent the kind of FRAUD perpetrated by corporations that brought down the economy in the 1929 crash. What the Carlyle Group evidently wants to do is engage in a leveraged buyout of some bank or banks. This will give them access to huge piles of cash (depositors' savings) which they can then use as collateral to purchase other companies without having to issue shares of stock, or float bonds, or borrow the money for which they would have to pay interest.

This is a scam comparable to the real estate hedge funds that brought down the mortgage companies. It is designed to rob the banks before the entire economy collapses. Company A (say, the Carlyle Group) buys a controlling interest of bank B by buying up, say, twenty percent of the bank's stock. Company A then controls the assets of that bank which they can then use as collateral to buy up controlling interests in other banks and corporations.

This is comparable to a pyramid scheme similar to buying risky subprime mortgages. If the economy takes a hit, and one of the companies defaults on its debts, they all come tumbling down like a house of cards, since this leveraging acts as a multiplier in a collapse.

The New Deal banking laws were designed to prevent these pyramid schemes which caused the Great depression in the 1930's. If Paulson pushes these changes through, it will serve to promote the greatest bank robbery in history. Paulson has to know what these guys are planning, or he is an incompetent idiot.

The Carlyle Group is planning the biggest swindle in history BEFORE the U.S. economy collapses. The economy is teetering on the edge. If the Carlyle Group, or any other corporation succeeds in this swindle, the resultant depression will make the Great depression of the 1930's look like a picnic.

[gateley]

16. Is there any way we can stop them from doing this?

Is this admin going along?

Thanks for the post - you explained it so we can all understand what it really means. :headbang:

[antigop]

19. Yes, the repeal of Glass-Steagall has been discussed quite a bit on DU. n/t

[SoCalDemGrrl]

30. Uh oh - The Carlyle Group? Be afraid- be very afraid!!!

[Snarkoleptic]

3. Get ready to turn in your wheelbarrow full of dollars for a few Ameros.

I mean, really, could a single administration do more to completely fuck the dollar into a worse position.
Could even the most inept administration run us from retiring debt too quickly to massive debt building?
The Amero currrency seems a joke, but there's way too much depth to this story for it to go away.

I've heard rumors that the Denver mint has been on lockdown for 18 months (notice the 'D' on the image?)
Disturbing video here-http://www.youtube.com/watch?v=6hiPrsc9g98&feature=related

[aquart]

4. Do you NEVER check Snopes before gobbling crap with a spoon?

<http://www.snopes.com/politics/business/amero.asp> FALSE.

...Which brings us to the question of the "Amero," the name bestowed upon the hypothetical currency such a union would use as its common specie. In 1999, a professor of economics at Simon Fraser University in Vancouver published The Case for the Amero, a study that advanced the idea that the
three North American countries would be better served by their having a common currency. And there the matter rests, or at least it did before Designs Computed thought to add to its catalogue of commemorative coins, medals, and tokens a suite of Ameros, a series of collectible coins struck from its concept of what coinage for such a currency might look like. Designs Computed is very clear on its web site that its Ameros are in fact "private-issue fantasy pattern coins will be struck as an annual series," and indeed is already offering some of them for sale.

Neither the U.S. Mint nor the U.S. Treasury has had a hand in creating these "Ameros." These coins are merely collectibles offered to the buying public by a private company in the business of manufacturing such curiosities.

On 31 August 2007, conservative radio host Hal Turner posted to his web site an interesting tale about having been given an Amero on the sly by an anonymous Treasury agent. In that story he claimed that a few days after he posted about the coin, a web site proclaiming Ameros to be fantasy coins was erected on the Internet as part of "a full blown effort to discredit my story and the images as fake." That was not the case.

Daniel Carr, the entrepreneur behind Designs Computed, has been displaying on his web site the coins he has designed at least since 2000 and has been offering some of them for sale at least since 2005. While his "Amero" entry dates only to 2007, the coins depicted thereon fit seamlessly into his catalogue of similar offerings, including his "parody State Quarters." (Do have a look at some of his "parody State Quarters," particularly Maine's and Colorado's, which especially tickled our fancy.)

[Snarkoleptic]

9. Sure, I read the Snopes piece several months ago.

The thing that keeps this rolling is the depth of the story.
Why else would the Repukes deliberately screw the dollar into the ground?
It's either the biggest April fool's prank ever, or an historical inevitability.
CNBC piece...http://www.youtube.com/watch?v=6hiPrsc9g98
CNN piece...http://www.youtube.com/watch?v=H65f3q_Lm9U
Wraparoud piece...http://www.youtube.com/watch?v=HecbGXzNLMs
Mebbe it's all bullshit, but is it really safe to assume Boooosh and has cabal are selling us down the river?

[southerncrone]

7. What an ugly coin.

How ironic that it should have "liberty" in such a prominent place on the coin, since we have none now.

Who's legs did they model this poor women's after? Ann Coulter's?

Wonder what the symbolism means: Torch & Spear (military?)? Eagle with 2 lightning bolts & olive branch?
How do Canada & Mexico feel about the use of the Eagle as the main symbol?
Where's the Maple leaf or Mexican symbol?

Anyone know if there will be "paper money", too?

Thanks for this info.

[gateley]

17. I'm past that --

I have too few dollars to turn in.

I'm stockpiling food. Well, I'm seriously considering it, anyway. Seriously!

[soothsayer]

5. Levitt, a carlyle group dude, was one of the panelists who gave input to Paulson on this

http://www.solari.com/blog/?p=772

[seafan]

6. Carlyle Group's Plan to Takeover the Banking System (??) Is Congress paying attention?

Carlyle Group's Plan to Takeover the Banking System

By Robert Wegner
April 3, 2008



Randal K. Quarles

So what's Treasury Secretary Henry Paulson's call for changes in regulation of the financial markets all about? A clue may have been revealed today by Randal Quarles, former Under Secretary of the Treasury who led the Treasury Department's effort in the coordination of the President's Working Group on Financial Markets and is a current Managing Director at Carlyle Group.

.....

Quarles stated that some changes in the structure of regulations that Paulson proposed were necessary but would take time to develop. He specifically stated that one regulation that needed to be changed is the limitation on the size of positions that non-banks can take in banks. (Note: Limitations in the size of non-banks positions in banks now limits Carlyle Group from taking large positions in banks).

.....

We might add this private equity acquisition of financial institutions will go on as the general public is scared off from investing in the financial institutions by scare headlines, or as Quarles would put it, "Public markets just don't have the capabilities to judge the risks and rewards of the various financial institutions." Translation: The public is not clued in on which firms the insiders have decided to let survive, like JPMorgan, and which they are going to takedown, like Bear Stearns.

Carlyle Group beefs up financial services team

Washington Business Journal - by Neil Adler Staff Reporter
September 10, 2007

The Carlyle Group has added six senior investment professionals to the private equity firm's recently formed global financial services group.

The additions include a former chairman of JPMorgan Chase & Co. and a former undersecretary at the Department of the Treasury.

D.C.-based Carlyle also hired three junior investment professionals for the financial services team, which will make investments in global financial services, including banking and insurance.

The team now has 11 people, Carlyle said in a statement.

Joining Carlyle are:

* Douglas Warner, former chairman of JPMorgan Chase (NYSE: JPM).
* David Moffett, former vice chairman and CFO of U.S. Bancorp (NYSE: USB).
* Randal Quarles, former undersecretary of domestic finance at the Treasury Department.
* John Redett, a former vice president of the financial institutions group at Goldman Sachs Group Inc. (NYSE: GS).
* A. Reed Deupree, a former research analyst at Legg Mason Capital Management.
* R. Keith Taylor, a former vice president in Goldman Sachs' financial institutions group.

Warner and Moffett come aboard as senior advisers. Quarles is a managing director. Redett is a principal. Deupree and Taylor are vice presidents.

Before the merger of J.P. Morgan and Chase Manhattan in 2000, Warner worked for 32 years at J.P. Morgan, where he was chairman and CEO from 1995 to 2000.

Moffett had been vice chairman and CFO of U.S. Bancorp since 1993. Earlier, he was a senior vice president in corporate treasury at Bank of America Corp. (NYSE: BAC).

In June, Edward Kelly, former CEO of Baltimore-based Mercantile Bankshares Corp., and David Zwiener, former chief operating officer of the Hartford Financial Services Group Inc.'s property and casualty operations, were named Carlyle managing directors to lead the new financial services group.

Oliver Sarkozy


Carlyle Lands UBS' Sarkozy

By Ken MacFadyen, Mergers Unleashed
March 3, 2008

Oliver Sarkozy, UBS’ highly regarded co-head of its global financial institutions group, is moving on to The Carlyle Group, the private equity firm announced Monday.

At Carlyle, Sarkozy will serve in a similar capacity, heading the buyout group’s FIG arm alongside David Zwiener.

Sarkozy, the half-brother of France President Nicolas Sarkozy, has been a star at UBS, overseeing such deals as Mellon’s merger with the Bank of New York, the sale of US Trust to Bank of America, and MBNA’s sale to BofA, among others.

.....

Carlyle launched its FIG group in June of last year, tapping Zweiner to oversee the operation, while staffing the group with managing directors such as Randal Quarles, the former Under Secretary of the US Treasury for Domestic Finance, and David Moffett, who previously served as vice chairman and CFO at US Bancorp.

Carlyle co-founder and managing director David Rubenstein cited in a statement Sarkozy’s history in the FIG arena and base of contacts within the industry. “He has an incredible track record and network that will help Carlyle capitalize on the dislocation in the financial services sector,” Rubenstein said in the announcement.

Sleeping giant: Awakening the transatlantic services economy

December 10, 2007
Washington, DC

On December 10, GMF hosted Dr. Daniel Hamilton, director of the Center for Transatlantic Relations at the Paul H. Nitze School of Advanced International Studies (SAIS), and Randal Quarles, managing director at the Carlyle Group in Washington, DC, for a breakfast discussion to present the findings of the book "Sleeping Giant: Awakening the Transatlantic Services Economy." The discussion was moderated by Richard Salt, transatlantic economic fellow at GMF.

The book,edited by Dan Hamilton and Joseph Quinlan, also a fellows at the Center for Transatlantic Relations at SAIS, highlights the potential gains of further integration of the transatlantic services economy. Given that the services economies of the United States and Europe have never been as intertwined as they are today, a more liberalized services sector could offer unprecedented benefits for the economies on both sides of the Atlantic. Yet the full potential of the transatlantic services economy remains hampered. The book addresses issues such as internal barriers and different regulatory frameworks to highlight the many obstacles that accompany further integration in this important sector.

.....

Building upon Dr. Hamilton's remarks and his own background as a Treasury official, Randal Quarles focused his comments on the integration of the transatlantic financial services sector. By pointing to some general statistics, he stressed that this sector has seen a remarkable evolution throughout the years. Whereas in 1990 gross transactions in U.S. equities by investors from the EU amounted to mere $144 billion, this figure surpassed the $3 trillion mark last year. Similarly, transactions in EU equities by investors based in the United States were well over $2 trillion, up from $141 billion in 1990.

Despite this continuous growth, Quarles pointed out that there are still some significant obstacles to cross-border financial transactions between the United States and Europe. According to him, these barriers are the result of different licensing frameworks, different rules governing access market infrastructure as well as different supervision and tax regimes. Although it is hard to quantify the benefits of complete integration, various estimates put them as high as a 60 percent reduction in the costs of transactions and a 60 percent increase in trading volume. Quarles then stressed that even if regulators were to aim for complete integration, it would be fairly difficult to achieve this goal given that there are legitimate regulatory concerns surrounding the idea of a transatlantic market in financial services, such as restricted investor protection given that fraud and deception could be made easier by a larger number of activities; a systemic risk caused by the potential emergence of just a few, but extremely large, financial institutions; and issues related to different regulatory choices made on either side of the Atlantic to achieve certain regulatory goals.

According to Quarles, the two methods available to reconcile regulatory differences are harmonization and mutual recognition. Quarles saw mutual recognition as a more fruitful approach given the amount of resources needed to achieve real harmonization. However, complicating any initiative promoting further market integration, whether it involves mutual recognition or harmonization efforts, is the extremely fragmented regulatory structure on both sides of the Atlantic.

After the presentations, the audience asked a number of questions related to the issue of declining U.S. competitiveness in financial markets and the regulatory fragmentation of the U.S. insurance market. A representative from the European Commission pointed out that the existence of 56 different insurance regulators in the U.S., representing both the federal states and U.S. territories, makes it difficult to cooperate transatlantically on issues related to insurance regulation. Quarles agreed and stressed that it would indeed be beneficial to have a single federal regulator who could streamline the process as well as clarify rules and enforce them. Another question that was raised related to the benefits of formalizing regulatory dialogues as it has recently happened through the establishment of the Transatlantic Economic Council (TEC). It was noted that sometimes regulators become wary and hesitant to cooperate when compelled to do so and rather prefer informal exchanges. However, for some sectors it is important to create political will and have buy-in from both the White House and the Commission in order to make real progress towards further integration. Everyone at the event agreed that within the next six months real progress has to be made in order to guarantee that the TEC and the overall Framework for Advancing Transatlantic Economic Integration become a sustainable initiative that can outlive both a new administration in the U.S. and a new Commission in Europe.

"...within the next six months.."?

"...an initiative that can outlive.. a new administration in the US....."?



The implications of these pieces of information are chilling.


Is Congress paying attention to these events??

[AdHocSolver]

12. Seems like the big boys want to create one giant financial monopoly and eliminate all competition.

Chilling is an apt descriptor.

If the only group we have to rely on to save us is Congress, recent history tells us that we are so screwed.

[UpInArms]

13. for some backwards history - see this article

The Case for Sedition

A case for sedition can be made against the Bush Cabal, including George Herbert Walker Bush, James Baker, Cappy Weinberger, and the late Bill Casey et al. They perpetrated a series of frauds against the public purse under the thinly disguised veil of political policies, to wit, the tremendous increase in military and defense expenditures, in order to try to defeat the "Evil Empire" of the Soviet Union, which in itself was a ruse.

This enormous multi-trillion dollar increase in defense spending was used by the Bush Cabal to suck money out of the public purse by the commission of a variety of schemes and to bleed money out of defense appropriations by incessant payments from defense contractors to a shadowy network of Republican-controlled arms companies, security research consultant companies, and offshore research institutes.

This can be ascertained when you look at the big Research and Development (R & D) expenditures that were done on the so-called Star Wars missile defense program. You can see the endless list of "security consultants" that were put on as subcontractors, most of whom had absolutely nothing to do with the development of the weapons.

These security consultant firms would put together proposals for estimated usage of weapons, etc, but since they knew the weapons were never going to work, they knew it was really meaningless anyway.

In addition, there was the "spare parts industry" that goes along with the Bush Cabal, which increases the cost of spare parts (which don't work) by ten or twenty times.

These actions of the Bush Cabal then constitute gross economic malfeasance, which, in my view, could rise to the level of sedition. The definition of sedition is four pages long, and it can be found in Statute 792 of US Title Code 18.

In other words, the Bush Cabal knew that what they were doing would severely weaken the United States, both militarily and economically. The country is weakened militarily by loading US military inventories with a lot of high tech weapons systems that don't work. The country is weakened economically by many years of purported multi-hundred billion dollar deficits, claimed to be $350 or $400 hundred billion dollar deficits, but which were actually (as we have pointed out before) twice as high as claimed at any given time.

and this was from Poppy's term

[gateley]

20. IS Congress paying attention?

Have there been any statements from anyone?

[jazzjunkysue]

22. Thank god Obama understands banking/markets. He'll at least know

the players and the game, and who to listen to.

[A HERETIC I AM]

8. What an utter load of horse shit.

We might add this private equity acquisition of financial institutions will go on as the general public is scared off from investing in the financial institutions by scare headlines, or as Quarles would put it, "Public markets just don't have the capabilities to judge the risks and rewards of the various financial institutions." Translation: The public is not clued in on which firms the insiders have decided to let survive, like JPMorgan, and which they are going to takedown, like Bear Stearns.

Complete and utter bullshit. This author assumes that the "public markets just don't have the capabilities to judge the risks and rewards of the various financial institutions". Really? He thinks that all of the traders on all the trading floors and all the analysts in all the financial institutions and everyone else in all the other companies that have been dealing with finance for decades and decades are clueless? And he is the only one who knows? He's a fucking idiot. Bear Sterns failed because they over leveraged themselves, saw their portfolio drop in value, suffered margin calls as a result and they could not keep all the plates spinning. There are plenty of companies older and larger than Bear Sterns that continue to operate in complete financial health. The "Insiders" don't decide which to "let survive" any more than this numbnuts decides which side of his keyboard the "A" will appear on.

This guy is not privy to information no one else has. What securities are worth, what companies are worth and what industries are worth is calculated on a daily basis by people a shit load smarter than someone who comes up as a blank on a Google search.

Demonstrate in some definable way that the author of this article has insight NO ONE ELSE HAS and he just might begin to have some credibility. Otherwise, he's just another dipshit that thinks he's somebody's somebody.

[AdHocSolver]

10. The model for the special insight into financial matters by financial analysts is named ENRON. nt

[DemReadingDU]

14. First I've heard of this, but

Why would Paulson leave Goldman Sachs where he was probably earning multi-millions, to be the Secretary of Treasury earning multi-thousands?

He wouldn't have left to fix problems, but to find ways to protect his rich cronies' investments.

[antigop]

15. "the Paulson plan has its roots long before the credit crisis emerged last summer."

http://www.independent.co.uk/news/business/news/paulson-reveals-plans-for-biggest-financial-reform-since-depression-803182.html

However, the Paulson plan has its roots long before the credit crisis emerged last summer. Indeed, it was conceived as a means of keeping Wall Street competitive in the face of a reinvigorated London market and emerging centres of financial power in Asia. Then, Wall Street leaders claimed that too-harsh regulation was leaving them hamstrung against countries with lighter-touch regulatory regimes.

In March last year, the Treasury Secretary convened a conference of powerful figures to debate potential change, where attendees included the former Federal Reserve chairmen Paul Volcker and Alan Greenspan, the billionaire investor Warren Buffett, and chief executives of some of America's biggest corporations. "When we announced that we would work on such a blueprint, other than some enthusiastic academics, few noticed," Mr Paulson said.

[DemReadingDU]

21. Hmmm, Paulson became Treasury Secretary in July 2006

His compensation package, according to reports, was US$37 million in 2005, and US$16.4 million projected for 2006.<9> His net worth has been estimated at over $700 million.<9>
http://en.wikipedia.org/wiki/Henry_Paulson

As Secretary of Treasury, Paulson earns $183,500
http://www.treas.gov/education/faq/treasury/officials.shtml#q2


It was a few months later, in March 2007, that Paulson & Greenspan (and other rich cronies) were planning potential changes.

Yeh, I think they saw the bubble about to burst, and had to devise plans to protect the assets of the wealthy investors.

[dixiegrrrrl]

25. Oh...it's the Bush Doctrine of Finance.

( Pay attention here, Sarah)

Just like the goals of the Project for a New American Century ( PNAC).

I had read there was a proposal floated to make it legal to use our deposits as
a source of Wall St. gambling.
Vanguard Group was against it, of course.

The idea is for the big fish to swallow the little fish of global banking, in a premptive strike.

The bailout would have provided the cash to help with that, perhaps.

[gateley]

18. I just e-mailed Dodd.

Since he's the Chair of the Senate Banking Committee - plus I trust him.

These people HAVE to know what's going on, right? Will they allow this to happen?

[snot]

23. the page at your link has been taken down.

that is, your link at http://www.economicanalyticsgroup.com/2008/04/carlyle-groups-plan-to-take-over.html

[lurky]

29. Looks like that site no longer exists,

but I found the articles "reprinted" elsewhere on the web.

http://www.economicpolicyjournal.com/2008/04/carlyle-groups-plan-to-takeover-banking.html
http://www.gmfus.org/economics/event/detail.cfm?id=449&parent_type=E

[Celebration]

24. there is a "club", according to economist at CNBC (Steve Liesman--sp?)

They are drawing a line around

CitiGroup

Bank of America

JP Morgan

Goldman Sachs

one other- I forget which

So, they basically do want a concentration of wealth, and I feel, their plans reflect that. So, they are basically admitting this on CNBC.

[truedelphi]

26. Are you meaning to acquire these??

That would make sense.

And the average AMerican will benefit about as much as he and she did when they invaded Iraq.

[Celebration]

28. to SAVE them

Give them preferential deals in this time of crisis, so that on the other end of this crisis there would be more concentration of power and less competition. That seems to be the end game.

[grasswire]

27. Carlyle-Coutts partnership ..... check it out

Carlyle Group is partnered with Coutts, which is the bank of the landed gentry of the UK, owned by the Royal Bank of Scotland which has a zillion ties to the bailout. We had a thread about it going earlier today, here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x44522

I beg DUers to acquaint themselves with some of this intrigue.

The motto of the Carlyle Coutts group: One world, one mission, one partnership.

[SoCalDemGrrl]

31. The Carlyle Group is to be feared- their intentions are anti-democratic

It is your typical old boys network on STEROIDS - and THEY CANNOT BE TRUSTED !!!