Tuesday, February 24, 2009

Carlyle's Quarles Supports Geithner Plan

Treasury Chief Tim Geithner has at least one supporter, Randall Quarles of The Carlyle Group. Geithner's plan involves stress testing banks (another irritating health care analogy). Toxic assets poison balance sheets and clog America's credit arteries. Tim wants to move the poisonous plaque to a public-private partnership. That's what has Carlyle and other private equity underwriters salivating. Quarles told Bloomberg:

“You have to remove the uncertainty about asset values, and Geithner’s plan is an efficient way of jump-starting private- sector price discovery of those values,” said Randal Quarles, a former Treasury undersecretary of domestic finance who is now a managing director at the Carlyle Group in Washington.

I thought the private sector could conduct price discovery on its own. America's sovereign debt fund is needed to bankroll PEU's. Taxpayers are needed to guarantee PEU returns. This warrants a Rick Santelli rant, but that's reserved for individual welfare. Corporafornication merits little reaction.