Carlyle as in George Bush works for us Carlyle? I can't imagine bushie wouldn't have protection or a parachute but i'm hoping against hope that he takes a hit from this as well.

And of course, the dumping of assets by a firm as large as Carlyle is a seriously big deal: the more assets that get dumped on the market, the lower the prices get, meaning that other firms see their values drop and potentially face margin calls like Carlyle did.

This entire scenario played out in 1998, and it took serious intervention and a bail-out by the industry to prevent what many economists believe would have been the worst economic event since the Depression. I'm not in any way qualified to state whether Carlyle's problems are anywhere near as severe as those that LTCM faced/caused, but it's pretty safe to assert that this is a pretty big goddamned deal.

There's a reason why the regulated portions of the market have limits of how much can be leveraged!

This is great

http://docs.google.com/TeamPresent?doci ... true&pli=1

*paid off his mortgage last year*

so, the US economy has been choked to death on its own faeces and the corpse is already being sold piecemeal to China and the EU for dog food?

Some tough questions to Bernanke from inside the false left/right paradigm:

hearings on Bear Stearns bailout wrote:Democrats on the Senate Banking Committee said they wanted to find out what pressures the Bush administration had brought to close the sale and whether big investment banks were getting preferential treatment over millions of Americans in danger of defaulting on their mortgages.

"Was this a justified rescue to prevent a systemic collapse of financial markets or a $30 billion taxpayer bailout for a Wall Street firm while people on Main Street struggle to pay their mortgages?" Senate Banking Committee Chairman Christopher Dodd asked at the beginning of the hearing.

Dodd said he planned to focus on a period of 96 hours including the weekend of March 15-16, in which the federal government took unprecedented actions to "stabilize our markets, to infuse them with liquidity and to prevent additional firms from being swept under the riptide of panic that threatened to have taken hold."

While members of the panel were generally supportive of the decisions, Sen. Jim Bunning, R-Ky., asked, "How big do you have to be to be too big to fail? ... Who let our financial system become so fragile that one failure jeopardizes the health of the entire system?"

Bernanke said that if Bear Stearns had been allowed to fail, it would have led to a "chaotic unwinding" of Bear Stearns investments held by individuals and other financial institutions.

The bailout just added more torque to the next 'chaotic unwinding'.

The bankers are on a hot streak:

msnbc 4-3-08 wrote: Republicans and business-friendly Democrats on Thursday scuttled a plan to give people threatened with losing their homes more leverage in winning favorable loan terms from their lenders in bankruptcy courts.

The Senate killed the bankruptcy plan by a 58-36 vote on the first full day of debate on a bill designed to boost the slumping housing market.

The Democratic-backed bankruptcy law changes, opposed by banks and their GOP allies and a handful of Democrats, would have given judges the power to cut interest rates and principal on troubled mortgages to help desperate borrowers trapped in subprime mortgages keep their homes.

Squatters.

bloomberg news wrote:Banks are so overwhelmed by the U.S. housing crisis they’ve started to look the other way when homeowners stop paying their mortgages.

The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on.

Lenders who allow owners to stay in their homes are distorting the record foreclosure rate and delaying the worst of the housing decline, said Mark Zandi, chief economist at Moody’s Economy.com, a unit of New York-based Moody’s Corp. These borrowers will eventually push the number of delinquencies even higher and send more homes onto an already glutted market.

“We don’t have a sense of the magnitude of what’s really going on because the whole process is being delayed,” Zandi said in an interview. “Looking at the data, we see the problems, but they are probably measurably greater than we think.”

funny youtube video from Mr. Mortgage- the end of home equity credit is dragging consumer spending down fast.
But keep listening to the mainstream business press cheerleaders- they keep saying, "short and shallow" about the recession. Wrong.

Interesting times for sure...

It doesn't take a genius to see how extreme, artificial leverage and "easy credit" + mal-investment = shit sandwich.

As I'm sure many are increasingly coming to the realize, the U.S. economy (and by extension the global economy) is little more than a shell game played within a house of cards. With that said, I don't think its game over yet.

There's too many people that love playing the game, and with the fairly recent removal of the up-tick rule, as much money can be made on the destruction of U.S. economy as was made on its artificially supported incline.

While I feel a severe correction is long overdue, I'm not cheering on the financial apocalypse. In my opinion the stock market represents one of the best examples of free market capitalism and opportunities for 'the little guy' to play on a comparatively level playing field which until recently was the sole domain of the wealthy.

In that context, I feel the current market manipulation, including 'the strong dollar policy' (i.e. artificial gold price suppression, 'propping up' fiat paper currencies as a result www.gata.org) amounts to little more than taking the band-aid off as slowly as possible.

Perhaps paradoxically, the FOREX market, dominated by the interbank network represents arguably one of the absolute best examples of global free market capitalism... With $3+ trillion traded daily (dwarfing the world's stock markets) the 'peasant' retail trader with a $250 mini account is about as likely to influence this wholly decentralized market as a billion dollar order from a central bank. Compare this with Wall-Street which is thrives on a culture of manipulation, inside information and requires by some estimates, the influx of hundreds of billions from the illegal drug trade to remain solvent (listed companies are largely exempt from money laundering regulations. "Wall Street, CIA and the Global Drug Trade" http://www.whale.to/b/ruppert1.html)

As for the immediate situation, 'Helicopter Ben' isn't the only Fed official with expertise in depression era economics, which in itself should be grounds for caution...

Personally, instead of being captive to the reality of the global finance shell game, I've tried to take advantage of it, and to be honest, my own recent passion in the subject has helped me appreciate why 'the game' has lasted so long and why I feel it still has a lot of life left still.

The 'finance shell game', which until recently has been the exclusive playground of the rich, has, along with many other aspects of society become democratized unlike any other time in history. This unique opportunity offers the potential to 'free' creative, intelligent individuals from the shackles of labor on a scale not seen since the agricultural revolution.

If the potential exists to 'earn' the same income in ten minutes as would normally take an entire day, with the only material requirement being the displacement of elections across a computer network I view this as a positive development. If more of 'us' started to view 'money' as the intellectual construct it is, rather than a limited commodity to sacrifice most of our productive lives accumulating, the world would be a better place in my opinion...

Even the staunchest conspiratorial "doom and gloomer", would be hard pressed to argue a substantial depreciation in US equity doesn't fit perfectly within the agenda of the forever non-descript group known as "them".

The way I see it, as the last vestiges of true 'free market' economics are eroded through government and central bank control, 'they' not only consolidate power but stifle the democratization of wealth in an economy which can no longer rely on the perpetual and exponential harvesting of the planets limited resources simply to avoid its own demise, but potentially at the expemse of the entire global ecology.

Argyreia Nervosa wrote:While I feel a severe correction is long overdue, I'm not cheering on the financial apocalypse. In my opinion the stock market represents one of the best examples of free market capitalism and opportunities for 'the little guy' to play on a comparatively level playing field which until recently was the sole domain of the wealthy.

I can't agree with that. The 'level playing field' is a myth. Those with massive leverage and insider knowledge and well-placed servants in government have all the advantages. The little guy gets crumbs if he's lucky and burned if he isn't. He basically has to catch a wave created by all the leverage and con games of the market giants.

The idea that this much capital tied up in speculation is a good thing is something I also strongly disagree with. Wall Street siphons off wealth into a casino. It's all, at its roots, based on usury. Interest rates and yields drive everything. We would shrink the population of elite parasites down to nothing if we took their casino playtoy away and dedicated all profits generated by the marketplace back into the real world economy. Speculation is just a free ride for hustlers and middle men and leeches who are looking to get rich off moving money. Moving money isn't real work.

There is no free market. There is crony capitalism, and now we are seeing the biggest bailout ever, crony to crony. Scum throwing lifejackets paid for by us to other scum.

Big Wall Street investment companies are stepping up their borrowing a bit from the Federal Reserve’s unprecedented emergency lending program.

The Federal Reserve reports Thursday that those firms averaged $38.1 billion in daily borrowing over the past week from the new lending program. That compared with $32.9 billion in the previous week and $13.4 billion in the first week the lending facility opened.

$38 billion in new lending a day??? When does it stop? When do the parasites take their medicine over all their bad loans? I know when. When they crash the dollar bailing themselves out.

The great Mike Whitney has a new column up. We have not turned a corner yet in the credit crisis REPEAT We have not turned a corner yet in the credit crisis If you are feeling calmer, it's because the media lies are getting stronger.

mike whitney, 4-6-08 wrote:In a recent interview with the New York Times, former Secretary of the Treasury Paul O' Neill, was asked how the problems with subprime mortgages could lead to a financial crisis of global proportions. O' Neill said, “If you have 10 bottles of water, and one bottle has poison in it, and you don't know which one, you probably won’t drink out of any of the 10 bottles; that’s basically what we’ve got here.”

Bulls-eye. O' Neill's answer is the best yet for explaining a complex situation in simple terms. The term “subprime” is a red herring; it is used by the media to minimize what is really going on. The meltdown in financing extends across the entire range of mortgage-security products. No loan-type has been spared. The wholesale market for anything connected to mortgages is frozen and the details are being intentionally withheld from the public. Two years ago, more than 65 percent of all mortgages were converted into securities and sold off to Wall Street. No more. That scam unraveled in July when two Bear Stearns hedge funds blew up and their were no takers for billions of dollars of mortgage-backed junk. Since then, bankers and hedge fund managers have been scrambling to conceal the facts about what mortgage-backed securities (MBS) are really worth; nothing. The fear is that when the public finds out what is really going on, they'll draw the logical conclusion that the banking system is bankrupt, which it probably is. Just look at these eye-popping losses which appeared in Bloomberg News on April 1 The financial ship is listing, and the mainstream media is doing its best to keep the public in the dark.

bernanke joins G7 to stem global financial meltdown