Wednesday, December 9, 2009

Carlyle's Rubenstein on Debt, China

BizNow reported on their Breakfast & Smooze event. The Carlyle Group's big Smoozer, co-founder David Rubenstein, spoke. He said:

“You can't invest too much money in China,” he says, predicting it will surpass the US as the largest economy in the world by 2035.
What will China do to reduce "buyer beware"? They have no understanding of quality. Neither did Wall Street. Such paltry issues are ignored when money's flowing. Carlyle stands to net $4 billion from its investment in China Pacific Insurance.

Later David spoke to the remnants of Carlyle's game plan.

As for the most serious economic problem? Debt. There's $58 trillion of it. David says if $1 million was put in the bank the day Jesus was born and $1 million added every day after, we still wouldn't reach that amount.

Rubenstein is doing his part by cramming down Carlyle affiliate bondholders, when not losing whole companies to debt holders. Dubai World joined Carlyle in losing prize assets.

Sandra Horbach, one of David's managing directors, said offensive leverage was back. Booz, Allen, Hamilton will borrow $350 million to give Carlyle investors a fat dividend. Carlyle adds to Rubenstein's most serious economic problem.