Saturday, January 10, 2009

Another Prescient Carlyle Group Big Wig?

Carlyle Group co-founder David Rubenstein wowed Seward's Folly with the coming "mother of all stimulus packages", before the media had an inkling. David Marchick, the firm's chief lobbyist, spoke on Obama's priorities for modernizing the regulatory structure.

Modernizing under President Bush meant contracting to the private sector. It remains to be seen if Barack is using the same definition. Here's what David Marchick, managing director of global government and regulatory affairs at the Carlyle Group, had to say:

Priority #1 is economic rescue, i.e. stopping the bleeding. He sees a huge stimulus package in early 2009. After that Priority #2 is modernizing regulation, getting it caught up with changes made during October economic rescue.. He sees a broad rewrite & reorganization of the regulatory structure.

1. Modernizing and strengthening the regulatory system with a strong systemic regulator, probably the Fed. Broader oversight of some of the unregulated parts of the system.

2. Minimizing systemic risk

3. Enhancing transparency

4. Reform of credit rating agencies

5. Regulating derivative products

David Marchick is an ex-Clinton White House staffer. He spoke confidently on behalf of the Obama team just one week after the election. If it came from insider knowledge, Carlyle has incredible blue connections. The PEU's red connections are legendary.

Let me hazard a guess. Private equity underwriters will remain outside the modernized regulatory structure. Enhanced transparency requirements will not impact the PEU boys. Stay tuned.