Wednesday, November 19, 2008

Paulson's Sovereign Debt Fund Invests in Carlyle Group Affiliate

Six weeks after Congress passed the TARP, Treasury Chief Hank Paulson reached a new low in the use of taxpayer money. MarketWatch reported Carlyle affiliate, Boston Private Financial Holdings received approval for a federal equity injection.

The Treasury intends to invest approximately $150 million in Boston Private in the form of preferred stock and common stock warrants.

"We are extremely pleased by the U.S. Treasury Department's preliminary approval of a TARP capital investment in Boston Private," said Timothy Vaill, Chairman and CEO of Boston Private. "It will enhance our already strong capital position and allow us to expand lending programs in each of our markets nationwide, among other things. Along with the $173 million of funds from our highly successful capital raise in July, including a strategic investment by The Carlyle Group, this investment by the Treasury provides further additional flexibility to manage our business in the current market environment."

The Treasury Department's TARP Capital Purchase Program is a voluntary program for healthy U.S. financial institutions designed to encourage these institutions to build capital to increase the flow of financing to U.S. businesses and consumers and to support the U.S. economy.

The TARP has been criticized for giving billions to banks, who have yet to increase lending. How will $150 million help Boston Private?

BPFH is a national financial service organization comprised of independently operated affiliates located in key regions of the U.S. that offer private banking, wealth advisory and investment management services to the high net worth marketplace.

Already strong capital position? High net worth marketplace? This is the latest round of Bush sponsored Corporafornication. American taxpayers will soon own a chunk of The Carlyle Group. Will we get the 30% historical returns earned by the private equity underwriter (PEU)? Or are we recapitalizing a rich man financial services firm on the cheap? More details, please....