Wednesday, May 20, 2020

PEU Wake Up Calls

Wall Street on Parade did a piece on Fed Chief Jay Powell and Vice Chair Randall Quarles being former Carlyle Group executives.  It also highlighted a number of Carlyle bankruptcies and the carnage left behind.

American Compass, a Republican think tank, came out against private equity.

“The buying and selling of companies, the mergers and divestments, the hedging and leveraging, are not themselves valuable activity,” the group warned in a bluntly worded primer laying out its Coin-Flip project. “They invent, create, build and provide nothing.” 
PEUReport chronicled the evils of private equity since 2007.  The Fed flooded the financial system with money in Fall 2008.  Carlyle's Randall Quarles helped land Carlyle's sweet BankUnited deal from the FDIC.   Trump Commerce Secretary Wilbur Ross made huge money on that same deal when he partnered with Carlyle to buy BankUnited with massive FDIC subsidies.

Bloomberg wrote in October 2019 how private equity had taken over the world and won the 2008 financial crisis.  That crisis is the template for Federal Reserve interventions around the coronavirus pandemic.

The greed and leverage boys stand to win big again.