Bush family touched by subprime crisis

Asia Times ^ | 031208 | F William Engdahl

[Fred]

The severity of its liquidity problems indicates that the unfolding financial crisis is taking major parts of the US financial and political elite down with it. Carlyle Capital Corp Ltd, a subsidiary of one of the most influential US private equity funds and closely tied to the Bush family, is in default on several of its securities. Carlyle is an offshore subsidiary of the Washington-based Carlyle Group, one of the most politically powerful private equity firms of the past two decades.

Among the leading partners of the Carlyle Group in recent years have been George H W Bush, father of President George W Bush; James Baker III, the Bush family's attorney and fixer; and former British prime minister John Major.

Carlyle Capital reports it is attempting to convince lenders holding US$16 billion in securities not to liquidate the company's remaining collateral. The company is a listed mortgage-bond fund

managed by the Carlyle Group. The Carlyle Group already has loaned Carlyle Capital $150 million to cover debt obligations since July 2007. In the past several days it failed to meet margin calls with four banks.

The fear in the market according to informed reports is that its entire portfolio, recently valued at $21 billion, could be sold off in a distress sale, putting major downward pressure on all mortgage bonds globally. A collapse at Carlyle would hit the value of all fixed-income securities, which have already dropped sharply as banks pull back on their lending, and force a new global round of asset sales.

In the past days, Carlyle Capital admitted it had received "substantial additional margin calls and additional default notices from its lenders". It said lenders are selling off securities held as collateral. Margin calls are demanded when a creditor questions the ability of the borrower to repay.

[Fred]

According to Wiki's (From Wikipedia, the free encyclopedia)the Carlyle Group, had many previous politicians and appointees from both the Bush and Clinton administration as employees, as wells as European politicians.

[edit] Politics and public service

• James Baker III, former United States Secretary of State under George H. W. Bush, Staff member under Ronald Reagan and George W. Bush, Carlyle Senior Counselor, served in this capacity from 1993 to 2005.

• George H. W. Bush, former U.S. President, Senior Advisor to the Carlyle Asia Advisory Board from April 1998 to October 2003.
• George W. Bush, current U.S. President. Was appointed in 1990 to the Board of Directors of one of Carlyle's first acquisitions, an airline food business called Caterair, which Carlyle eventually sold at a loss. Bush left the board in 1992 to run for Governor of Texas.
• Frank C. Carlucci, former United States Secretary of Defense from 1987 to 1989; Also, former Princeton wrestling partner of former US Secretary of Defense, Donald Rumsfeld. Carlyle Chairman and Chairman Emeritus from 1989 to 2005.

• Richard Darman, former Director of the U.S. Office of Management and Budget under George H. W. Bush, Senior Advisor and Managing Director of The Carlyle Group from 1993 to the present
• Allan Gotlieb, Canadian ambassador to the United States (1981-89) and member of Carlyle's Canadian advisory board.
• Liu Hong-Ru, former chairman of China's Securities Regulatory Commission
• William Kennard, Chairman of the U.S. Federal Communications Commission (FCC) under President Bill Clinton, Carlyle's Managing Director in the Telecommunications & Media Group from 2001 to the present.

• Arthur Levitt, Chairman of the U.S. Securities and Exchange Commission (SEC) under President Bill Clinton, Carlyle Senior Advisor from 2001 to the present
• Peter Lougheed - Premier of Alberta (1971-85)
• John Major, former British Prime Minister, Chairman, Carlyle Europe from 2002 until 2005

• Frank McKenna, Canadian ambassador to the United States and former member of Carlyle's Canadian advisory board
• Mack McLarty, White House Chief of Staff under President Bill Clinton, President of Kissinger McLarty Associates, Carlyle Senior Advisor from 2003 to the present

• Anand Panyarachun, former Prime Minister of Thailand (twice), former member of the Carlyle Asia Advisory Board until the board was disbanded in 2004
• Randal K. Quarles, former Under Secretary of the U.S. Treasury under President George W. Bush, now a Carlyle managing director
• Fidel V. Ramos, former president of the Philippines, Carlyle Asia Advisor Board Member until the board was disbanded in 2004
• Dan Senor - political consultant

• Thaksin Shinawatra, deposed Prime Minister of Thailand, former member of board, who resigned on taking office in 2001
• Luis Téllez Kuenzler, Mexican economist, current Secretary of Communications and Transportation under the Calderon administration and former Secretary of Energy under the Zedillo administration.

[edit] Other

• Norman Pearlstine - editor-in-chief of Time (1995-2005)

[freeangel]

Lucky for Carlyle that they will probably have the taxpayers bailing them out.

[Fred]

From WaPo Thursday edition

Carlyle Fund's Assets Seized Leaders Fail to Stop Securities Sell-Off

This is just one of their funds..

[Neidermeyer]

Lucky for Carlyle that they will probably have the taxpayers bailing them out.
*****************************************************
When Bush1 calls Bush2 to beg for the bailout do you think Bush2 will then understand that his advisors who are currently lying to him about this being contained are wrong?

[NVDave]

No. From his actions, it is pretty clear that Mr. Bush hasn’t the capability to understand the credit markets or the nature of the problems that led to it: a deflation of an inflated asset class.

[Brilliant]

Bush has not been associated with Carlyle for years.

[palmer]

The fear in the market according to informed reports is that its entire portfolio, recently valued at $21 billion, could be sold off in a distress sale, putting major downward pressure on all mortgage bonds globally.

As you show in your link in #3, the real fear is that the "portfolio" is worth zero. They had $1B and borrowed 20 and the credit bubble is imploding at full speed. Their 20B in lost credit (and entire loss of real capital) is nothing compared to the 5 or 10T that will be subtracted from credit in the next year or two. Even that won't get us back to sustainable credit to income ratios (right now 47T to 14T).

[Liberty Valance]

Thailand?