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No one could have known

It is sort of fascinating watching this Carlyle Capital train wreck. I’m not sure why this one is getting so much more attention than any of the others beyond the fact that they are part of Carlyle Group. No one would have ever imagined this could happen to them....

According to Bloomberg:

The fund [Carlyle Capital] said in a statement that it defaulted on about $16.6 billion of debt as of yesterday. Lenders will “promptly’’ take over all of its remaining assets after it failed to reach an agreement with lenders, Carlyle Capital said. Any remaining debt is expected to go into default “soon,” the fund added.
[...]
The fund’s losses were caused by “excessive leverage,” said Arthur Levitt, a senior Carlyle adviser, in a Bloomberg Radio interview today.
[...]
"It was a poorly conceived fund launched at the worst time,” said Toby Nangle, a member of the strategic policy group at Baring Asset Management in London, which manages $55 billion.
[...]
The shares, first sold to investors for $19 each, fell $2.55 to 25 cents as of 4:05 p.m. today.

Gee, ya think, Toby? And Arthur...hindsight is a wonderful thing, isn’t it? Do you think Arthur will get a big bonus this year?

That’s a lot of money to just go *poof* or, as someone said yesterday, there’s a lot of money that’s now gone to money heaven.

Posted on 03/13/08 at 12:51 PM
 




Gary

Do ya really thimk it all just went poof? Misdirection is the essence of all magic tricks, including separating money from the gullible.

United States   Posted by Gary on 03/13/08  at  05:53 PM





Kate

From the investor’s perspective, I imagine *poof* is a pretty apt term for what happened to their money. When your share price drops to a nice round quarter per, that’s a pretty big poof. I suppose from Carlyle’s perspective, it could be apt, as well, since they no longer have equity or a portfolio. And then, of course, it depends on what the lenders do with the securities. If they trade them in to the Fed for Treasuries, their money shouldn’t go *poof*. I wonder if investing in actual *things* will come back in fashion now. We do still manufacture *things* don’t we?

United States   Posted by Kate on 03/13/08  at  08:54 PM





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