The media called upon Carlyle Group co-founder David Rubenstein to calm investor fears the day after an 800 point fall in the Dow Industrial average. CBS This Morning interviewed private equity underwriter (PEU) Rubenstein.
The greed and leverage boys loaded affiliates with huge debt, some of which fundied sponsor dividends. PEU ownership causes 10 times greater bankruptcies over the decade long study period.
I've experienced PEU ownership again this last year. Our greedy owners slashed staffing, cut benefits and eliminated many unique services that our customers appreciated.
Not one anchor challenged Rubenstein as a perpetrator of financial pain or a contributor to a looming recession Carlyle Capital Corporation packaged mortgage backed securities and sold the investment as safe. Debt loaded CCC was the canary in the coal mine for the Fall 2008 Financial Crisis. Rubenstein's firm loaded CCC had 32:1 debt to equity.
Here's how one losing investor characterized Rubenstein's and Carlyle's sales pitch for CCC:
Carlyle "offered to sell shares of stock in the fund by knowingly or negligently representing that, among other things, the fund was 'conservative,' 'low risk' and that the 'downside [was] very limited." Forbes, July 2009Take anything the PEU boys say with a shaker full of salt.
