Wednesday, March 25, 2009

Tim's Takeover of Nonbanks Could Include PEU's

Finally, someone said Tim Geithner's plans to takeover nonbank financial firms includes private equity underwriters (PEU's). The NYT included the Carlyle Group as an example. However, Carlyle isn't one firm that can be wound down in receivership. It's literally thousands of corporations.

Take ManorCare, Carlyle's huge nursing home affiliate purchased in December 2007. They diced that company's 500 facilities into separate business and real estate assets. They did so for liability reasons.

Carlyle has dozens of funds, each segregated. Those funds hold companies, many diced up like ManorCare. The private equity underwriter isn't too big to fail. It's too politically connected to miss out on taxpayer funded corporafornication.