Saturday, January 17, 2009

David Rubenstein: Master of the Universe & Sky?

Carlyle Group co-founder David Rubenstein is a busy man. Last week he issued a report on reorganizing the global financial system and bid for for American International Group Inc.’s plane-leasing business.

Tiltiing the global deck in favor of private equity underwriters becomes easier when you're the World Economic Forum study group co-chair. I'm not sure how Carlyle gains advantage vs. its PEU competitors for International Lease Finance Corp. But all clearly want to pay distressed, fire sale prices for the now public asset.

“You have a situation where there’s a distressed seller and these are the times when private-equity funds get their best returns,” said Steven Kaplan, a professor at the University of Chicago Booth School of Business.

And that stressed global financial system? It likely will be restructed to favor private equity. The shadow banking system wins again with plum assets on the cheap, continued tax advantages, and lack of regulation. That's what money and influence can buy.

"Good Guy" George W. Bush tripped into the curtain, exposing all as he bumbled about. I'm not sure Barack, even with his lofty rhetoric and disarming smile, can yank it back quick enough.