Re: Carlyle faces more margin calls

I cannot believe these IDIOTS used margin.  I guess they were trying to 
JUICE their returns.  My financial advisor said never to use margin.

These idiots are not using their money so they do not care.  They are 
investing your and my money so they do not care if they default.

Vito


"Papadillos" <papadillos@[EMAIL PROTECTED]
> wrote in message 
news:C3F7E23B.5833%papadillos@[EMAIL PROTECTED]
> Carlyle faces more margin calls
>
> By Henny Sender and Martin Arnold in London
>
> Financial Times
> Published: March 7 2008 18:56
>
> The confrontation between the Carlyle Group and its bankers intensified
on
> Friday as the private equity groupbs Amsterdam-listed fund teetered on 
> the
> brink of collapse after receiving margin calls and default notices from
> lenders.
>
> As analysts forecast that Carlyle Capital Corp could go bankrupt unless 
> its
> private equity founder injects more money, bankers said the situation
was
> likely to leave a stain on the reputation of one of the worldbs biggest
> buy-out firms.
>
> CCC said its lenders had started to liquidate its ****tfolio of
residential
> mortgage-backed securities, which was worth $21.7bn at the end of 
> February,
> after it had failed to meet a number of margin calls in the past week.
>
> Shares in CCC were suspended on the Amsterdam stock exchange as it
warned
> that badditional margin calls and increased collateral requirements
could
> quickly deplete its liquidity and impair its capitalb.
>
> The company said: bManagement is closely monitoring the situation and
> considering all available options for the company.b
>
> Its shares were suspended at $5, well below their $19 initial public
> offering price last July.
>
> Analysts at Citigroup warned that unless Carlyle pumps more money into
CCC
> it bcould be forced into significant asset sales into a weak market or 
> could
> face bankruptcyb. Carlyle has already extended a $150m loan to help its
> stricken fund.
>
> Carlyle, like many other funds, is locked in a showdown with banks who
are
> reducing their financing lines to funds with big investments in mortgage

> and
> cor****ate securities. But the banksb attempt to manage their exposure, 
> which
> makes sense on an individual basis, risks precipitating a systemic
crisis.
>
> By cutting back on their lending, the banks are forcing funds to unload
> securities. At the same time they are increasing the likelihood of a
death
> spiral in the market as funds such as Carlylebs are selling those debts

> into
> a falling market, causing the prices to plunge further, which in turn 
> brings
> on additional margin calls.
>
> To the extent that banks hold many of those same securities, the banks
> become victims of their own actions as they mark down their own
positions.
>
> The crisis in the mortgage-backed securities market has also hit
Kohlberg
> Kravis Roberts, which is struggling to keep its listed investment fund, 
> KKR
> Financial Holdings, afloat after Standard & Poorbs cut ratings on its
> commercialb paperb notesb thisb week.
>
> http://www.ft.com/cms/s/0/9025b64c-ec77-11dc-86be-0000779fd2ac.html
>
>